CELEX: C1998/094/16
Language: en
Date: 1998-03-28 00:00:00
Title: Action brought on 22 January 1998 by the Italian Republic against the Commission of the European Communities (Case C-15/98)

C 94/8                 EN                     Official Journal of the European Communities                                   28.3.98
SpA against Direzione Regionale per le Entrate della                        the contested decision. When it became aware that the
Toscana and Ufficio delle Imposte Dirette di Firenze on                     amendment to Regional Law No 9 had been made
the following question:                                                     before the procedure was under way, the Commission
                                                                            decided to make a further separation and held that
Is a statutory tax on the net assets of companies with                      that Law marked another, fresh aid scheme, with
share capital which has effects economically equivalent to                  effect from 1996, to be considered separately. The
those of an indirect tax on capital contributions                           Italian Government and the parties concerned did not
compatible with Community law and in particular with                        become aware of this latter development until the
Directive 69/335/EEC (1)                                                    decision was notified to them. It should have been
                                                                            communicated beforehand inasmuch as it amounted to
(1) OJ, English Special Edition 1969 (II), p. 412.                          an amendment to the subject matter of the procedure.
                                                                            Failure to notify of this amendment timeously
                                                                            prevented not only the Italian Government but also
                                                                            the other interested parties from submitting relevant
                                                                            and effective comments in order to protect their
                                                                            respective interests.
      Action brought on 22 January 1998 by the Italian
      Republic against the Commission of the European                    2. Infringement of Article 93 of the Treaty in that a
                          Communities                                       distinction has been made between new and existing
                                                                            aid Ð Unlawful treatment of existing aid as new aid
                         (Case C-15/98)                                     Ð Assessment of aid as new vitiated by manifest
                          (98/C 94/16)                                      errors.
                                                                            Where amendments made to an existing scheme have
An action against the Commission of the European
                                                                            not been communicated, aid granted after such
Communities was brought before the Court of Justice of
                                                                            amendments may be deemed unlawful inasmuch as
the European Communities on 22 January 1998 by the
                                                                            they are contrary to Article 93(3) of the Treaty only if
Italian Republic, represented by Umberto Leanza and by
                                                                            such amendments have had a decisive effect on the
Pier Giorgio Ferri, Avvocato dello Stato, with an address
                                                                            compatibility of the aid. Part III of the decision took
for service in Luxembourg at the Italian Embassy, 5 Rue
                                                                            into consideration the factors listed in paragraphs (a)
Marie-AdeÂlaïde.
                                                                            to (e) in order to ascertain whether the aid granted
                                                                            after the 1988 Regional Law is new.
The applicant claims that the Court should:
                                                                            So far as concerns (a) relating to the condition that the
Ð annul, pursuant to Article 173 of the EC Treaty, the                      undertaking should be established in Sardinia, the
     decision of 21 October 1997 (1),                                       Commission made a serious and manifest error in
                                                                            ascribing to the Regional Law of 1988 the provision
Ð make an appropriate order in respect                     of  the          that the undertaking should have its head office and
     Commission's letter of 14 November 1997,                               its port of registration in Sardinia. This is not a new
                                                                            element because it was already provided for in the
Ð order the EC Commission to pay the costs.                                 1951 Law as amended in 1954.
Pleas in law and main arguments adduced in support:                         This error is also reflected in the assessment made of
                                                                            the importance of the other elements dealt with under
The Italian Government considers the Commission's                           letters (b) to (d).
decision of 21 October 1997 caused it harm and is
unlawful on the following grounds:                                       3. The assessment as to compatibility of the aid for the
                                                                            purposes of Article 92(1) was not carried out, is
                                                                            insufficient, inadequate or, in any event, unreasoned.
1. Unlawfulness of the determination adopted in the
     contested decision and enacted by way of the
     Commission's letter of 14 November 1997, relating to                   The Commission has altogether failed to take a view
     Regional Law No 9 of 15 February 1996 Ð                                on whether the aid is likely to distort or threaten to
     Infringement of the procedural rules.                                  distort competition. So far as concerns the other
                                                                            ground of incompatibility, that is to say the effect on
                                                                            trade between Member States, the Commission puts
     The Commission has not given any explanation as to
                                                                            forward reasons which are barely comprehensible,
     why it chose to make a single aid scheme, albeit
                                                                            illogical and in any event seriously inadequate.
     amended over time, subject to two different
     procedures. The Commission's choice is not only
     unjustified, it appears inappropriate to the aim of                 4. Unlawful assessment of the aid of the purposes of
     ensuring the correct and transparent exercise of its                   Article 92(3)(a) and (c) of the Treaty.
     power to check whether aid is compatible with the
     common market. Instead, the Commission creates                         After concluding that the aid scheme is incompatible
     confusion and makes the assessment process uncertain,                  within the meaning of Article 92(1) on the ground that
     contributing considerably to the unlawfulness vitiating                if affects trade between the Member States, the
 ---pagebreak--- 28.3.98               EN                Official Journal of the European Communities                                       C 94/9
     Commission examined whether it was possible to                It cannot share the view of the French authorities that,
     apply the derogations provided for in Article 92(2)           technically, there are two types of contracts relating to
     and (3). That point in the decision must suffer the           underground work (electrification) and installation above
     same consequences as the unlawful assessment carried          ground' (street lighting) respectively; the two operations
     out for the purposes of Article 92(1) denounced under         are closely linked and reference to the NACE
     the preceding submission which, should it be upheld,          nomenclature and the CPC and ISIC nomenclatures is
     would overturn all that has been decided on the               irrelevant.
     presumption that the aid is incompatible.
5. Unlawful order to recover the aid on the ground that            Moreover, the Commission considers, in particular in view
     it is in breach of the principles of protection of            of the notices published in both the Official Journal of the
     legitimate expectations, proportionality and equal            European Communities and the French Bulletin Official
     treatment.                                                    des Annonces des MarcheÂs Publics, that SYDEV must be
                                                                   considered to be the only contracting entity in question
(1) Commission Decision 98/95/EC (OJ L 20, 27.1.1998, p. 30).      rather than the individual associations of communes for
                                                                   the electrification of the VendeÂe. Since the contracting
                                                                   entity, for the purposes of the Directive, may be an entity
                                                                   with no legal personality, the question as to who is a legal
                                                                   party to the public contract is not decisive in order to
                                                                   identify it as the contracting entity. Finally, the work
Action brought on 22 January 1998 by the Commission of             concerned has only one purpose and is intended to fulfil a
  the European Communities against the French Republic             single economic and technical function, namely
                        (Case C-16/98)                             electrification over a number of years of the deÂpartement
                         (98/C 94/17)                              of the VendeÂe. Only the geographical location of the work
                                                                   is varied within the same deÂpartement. That difference is
An action against the French Republic was brought before           not such as to enable various works to be distinguished: it
the Court of Justice of the European Communities on                merely means that several lots may be distinguished within
22 January 1998 by the Commission of the European                  the same works. However, pursuant to the second
Communities, represented by Hendrik van Lier, Legal                paragraph of Article 14(10), in particular, where a work is
Adviser, and Olivier Couvert-CasteÂra, a national civil            the subject of several lots, the value of each lot is to be
servant on secondment to the Legal Service, acting as              taken into account when assessing the value of all the
Agents, with an address for service in Luxembourg at the           contracts.
office of Carlos Gómez de la Cruz, Wagner Centre,
Kirchberg.                                                         The notices of the award of contracts as published
The Commission of the European Communities claims                  confirm the Commission's view that the result of splitting
that the Court should:                                             the contracts has been to reserve the contracts to local
                                                                   undertakings, who were better informed as to the real
Ð declare that, in the course of the procurement                   scale of the programme of works. Those notices show in
     procedure issued by the Syndicat DeÂpartement                 fact that all the contracts were awarded to a restricted
     d'Electrification de la VendeÂe in December 1994 for          group of undertakings of the deÂpartement of the VendeÂe.
     the award of a contract for electrification and street
     lighting work, the French Republic failed to fulfil its       (1) OJ L 199, 9.8.1993, p. 84.
     obligations under Articles 4(2), 14(1), 10 and 13,            (2) Judgment in Case C-311/96 (OJ C 212, 12.7.1997, p. 6).
     together with Articles 21, 24 and 25 of Council
     Directive 93/38/EEC of 14 June 1993 coordinating the
     procurement procedures of entities operating in the
     water, energy, transport and telecommunications
     sectors (1),
Ð order the French Republic to pay the costs.                      Reference for a preliminary ruling by the President of the
                                                                   Arrondissementsrechtbank, The Hague, by order of
Pleas in law and main arguments adduced in support:
                                                                   19 December 1997 in the case of Emesa Sugar (Free Zone)
When the procedure for the award of public contracts in            NV and 1. the Netherlands State, 2. the Hoofdproduct-
question was held (end 1994 to early 1996), Directive 93/                 schap voor Akkerbouwproducten and 3. Aruba
38/EEC of 14 June 1993 had still not been transposed into                                  (Case C-17/98)
French law (2). None the less, the contracting entity was
required to apply the provisions of that Directive to that                                  (98/C 94/18)
award procedure by reason of their direct effect as from
1 July 1994.
                                                                   Reference has been made to the Court of Justice of the
The Commission considers that the entire electrification           European Communities by order of the President of the
and street lighting work in question comes within the              Arrondissementsrechtbank, The Hague, of 19 December
scope of one contracting entity and constitutes a single           1997, received at the Court Registry on 23 January 1998,
contract which was artificially split in order to avoid the        for a preliminary ruling in the case of Emesa Sugar (Free
obligations of the Directive.                                      Zone) NV and 1. the Netherlands State, 2. the Hoofdpro-