CELEX: C2001/303/42
Language: en
Date: 2001-10-27 00:00:00
Title: Case T-207/01: Action brought on 7 September 2001 by the Government of Gibraltar against the Commission of the European Communities

27.10.2001            EN                     Official Journal of the European Communities                                      C 303/27
Action brought on 7 September 2001 by the Government                    Kingdom’s rights of defence, in so far as they constitute
of Gibraltar against the Commission of the European                     essential procedural requirements.
                         Communities
                                                                        Further, the applicant claims that the decision is incompatible
                        (Case T-207/01)                                 with Article 88 of the EC Treaty and that the Commission has
                                                                        violated the principle of proportionality and the principles of
                        (2001/C 303/42)                                 legal certainty and legitimate expectations, as well as failing to
                                                                        fulfil its duty to exercise due diligence.
                  (Language of the case: English)
                                                                        According to the applicant, the legislation in question cannot
                                                                        be qualified as non-notified new aid. The qualified company
An action against the Commission of the European Communi-               legislation has already been in existence for 18 years. Further,
ties was brought before the Court of First Instance of the              the legislation was notified by the Government of the United
European Communities on 7 September 2001 by the Govern-                 Kingdom in 1998 within the framework of the Primarolo
ment of Gibraltar, represented by Alastair Sutton, Michael              group, which worked on the problem of the relationship
Llamas and Walter Schuster, of White & Case, Brussels                   between fiscal measures and State aid regulations. The present
(Belgium).                                                              proceedings of the Commission are a consequence of the
                                                                        findings of that group. The legislation in question should
The applicant claims that the Court should:                             therefore be regarded instead as existing aid under Article 88(1)
                                                                        EC.
—     annul the Commission’s decision to open the procedure
      under Article 88(2), in the form of the letter of 11 July         To pursue now the procedure in respect of non-notified new
      2001 addressed to the United Kingdom;                             aid would be to impose an unjustified burden with possibly
                                                                        grave consequences, especially since an investigation under
—     take such other or further measure as justice may require;        Article 88(1) EC would, for the applicant, constitute a measure
                                                                        having a comparable effect and less severe consequences. In
—     order the defendant to pay the costs.                             addition, having regard to the time which has elapsed since
                                                                        the introduction of the system, the applicant considers that
                                                                        the decision is disproportionate.
Pleas in law and main arguments
                                                                        The applicant further claims that, since the introduction of the
In 1983 the Government of Gibraltar introduced a tax scheme             system, the interpretation of ‘State aid’ under EC law has
under which certain companies, under certain conditions, are            evolved, especially in relation to fiscal measures. At that time,
liable to income tax at a reduced rate (the qualified company           that type of measure was, according to the applicant, not
legislation).                                                           generally regarded as falling within the rules of the EC Treaty
                                                                        concerning State aid. There was therefore no reason to notify
                                                                        the legislation at that time. To regard that legislation now as
The Commission has decided to open a procedure under                    new aid would violate the principle of legal certainty and the
Article 88(2) EC, qualifying the legislation in question as non-        legitimate expectations of the applicant. The applicant refers
notified new aid. That decision is now contested by the                 to Article 1(b)(v) of Regulation No 659/1999, which provides
applicant.                                                              that, in the event of developments in the law, measures
                                                                        introduced before those developments took place are to be
According to the applicant, the Commission has violated                 regarded as existing aid.
Gibraltar’s rights of defence, by providing an insufficient
statement of the reasons for the contested decision and by              Finally, the applicant states that the Commission’s investigation
insufficiently hearing the Government of Gibraltar as the party         prior to the decision was too lengthy, and therefore constitutes
directly and individually concerned by the decision. By the             a breach of the Commission’s duty to exercise due diligence
same token, the Commission has violated the United                      and of the principle of good administration.