Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening (C-383/06) and Gemeente Rotterdam (C-384/06) v Minister van Sociale Zaken en Werkgelegenheid and Sociaal Economische Samenwerking West-Brabant (C-385/06) v Algemene Directie voor de Arbeidsvoorziening.
Date: 2008-03-13
37. The Court has held that that principle is enshrined in the first subparagraph of Article 23(1) of Regulation No 4253/88, which provides that, in order to guarantee completion of operations carried out by public or private promoters, Member States are to take the necessary measures in implementing the operations to verify on a regular basis that operations financed by the Community have been properly carried out, to prevent and to take action against irregularities and to recover any amounts lost as a result of an irregularity or negligence (see Case C‑271/01 COPPI  [2004] ECR I‑1029, paragraph 40).
38. Similarly, the exercise of any discretion to decide whether or not it would be expedient to demand repayment of Community funds unduly or irregularly granted would be inconsistent with the duty imposed on national administrations by the first subparagraph of Article 23(1) of Regulation No 4253/88 to recover any amounts unduly or irregularly paid (see, by analogy, with regard to Regulation (EEC) No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy (OJ, English Special Edition 1970 (I), p. 218), Joined Cases 205/82 to 215/82 Deutsche Milchkontor and Others  [1983] ECR 2633, paragraph 22).
39. Finally, it should be added that, Regulation No 4253/88 is the relevant legal basis for the obligation to recover and not Regulation No 2988/95 which, as the Commission points out, merely lays down general rules for supervision and sanctions for the purpose of safeguarding the Community’s financial interests. Recovery must therefore be carried out on the basis of Article 23(1).
40. It follows from those considerations that the answer to the first and seventh questions referred to the Court should be that Article 23(1) of Regulation No 4253/88 requires the Member States to recover any amounts lost as a result of an irregularity or negligence without there being any need for authority to do so under national law.
42. Inasmuch as the wording of the questions referred to the Court admits of doubt as to whether there is any need to answer the third and fourth questions, it should be pointed out that while it is for the Court of Justice, in the system laid down by Article 234 EC providing for cooperation, to provide the referring court with an answer which will be of use to it and enable it to determine the case before it, the Court may have to reformulate the questions referred (see, inter alia, Case C‑88/99 Roquettes Frères  [2000] ECR I‑10465, paragraph 18; Case C‑469/00 Ravil  [2003] ECR I‑5053, paragraph 27; Case C‑286/05 Haug  [2006] ECR I‑4121, paragraph 17; and Case C‑429/05 Rampion and Goddard  [2007] ECR I‑0000, paragraph 27).
48. It follows from the case-law of the Court that, in the absence of provisions of Community law, disputes concerning the recovery of amounts wrongly paid under Community law must be decided by national courts in application of their own domestic law, subject to the limits imposed by Community law ( Deutsche Milchkontor and Others , cited above; Huber , cited above; and Case C‑158/06 ROM-projecten  [2007] ECR I‑5103, paragraph 23). The Court has laid down some of those limits.
49. First of all, the application of national law must not hinder the application or the effectiveness of Community law. That would be the case, in particular, if such an application made it impossible in practice to recover the sums improperly granted ( Deutsche Milchkontor and Others , cited above, paragraphs 21 and 22). It follows that, it is for the national court to apply, in principle, national law while taking care to ensure the full effectiveness of Community law, a task which may lead it to refrain from applying, if need be, a national rule preventing that or to interpret a national rule which has been drawn up with only a purely domestic situation in mind (see inter alia, Case C‑443/03 Leffler  [2005] ECR I‑9611, paragraph 51).
50. National legislation must also be applied in a manner which is not discriminatory as compared to procedures for deciding similar national disputes and the national authorities must act with the same degree of care, and in accordance with rules and procedures which do not make the recovery of the sums in question more difficult, as in comparable cases concerning solely the application of corresponding national legislation ( Deutsche Milchkontor and Others , cited above, paragraphs 23).
52. It is common ground that the Court has also decided that it cannot be regarded as contrary to Community law for national law, as far as the withdrawal of administrative measures and the recovery of sums wrongly paid by public authorities are concerned, to take into account, in addition to the principle of legality, the principles of the protection of legitimate expectations and legal certainty, since those principles form part of the legal order of the Community ( Deutsche Milchkontor and Others , cited above, paragraph 30; Joined Cases C‑80/99 to C‑82/99 Flemmer and Others  [2001] ECR I‑7211, paragraph 60; Huber , cited above, paragraph 56; and ROM-projecten , cited above, paragraph 24). Those principles must be observed all the more strictly in the case of rules liable to have financial consequences (Case C‑94/05 Emsland‑Stärke  [2006] ECR I‑2619, paragraph 43; Case C‑248/04 Koninklijke Coöperatie Cosun  [2006] ECR I‑10211, paragraph 79; and ROM‑projecten , cited above, paragraph 26).
53. However, as was stated in paragraph 40 of the present judgment, Article 23(1) of Regulation No 4253/88 requires the Member States to recover any amounts lost as a result of an irregularity or negligence without there being any need for authority to do so under national law. It follows that the principles of legal certainty and the protection of legitimate expectations must be applied in accordance with the rules of Community law.
54. It should be borne in mind that, in regard to the Structural Funds, Article 4(1) of Regulation No 2052/88 provides that Community operations are to be established through close consultations between the Commission, the Member State concerned and the competent authorities and bodies in the Member State. Those consultations are also reflected in the residual responsibility of the Member States towards the Community where sums from the Structural Funds are lost as a result of abuse or negligence. The detailed rules for the enforcement of that responsibility are contained in Articles 23 and 24 of Regulation No 4253/88 which, the Court has decided, cannot be interpreted separately (see COPPI , cited above, paragraphs 27 to 29) and Article 5(2) of Regulation No 1681/94. The fact that the recipient of the funds is a public-law person is irrelevant to the application of those principles.
55. Moreover, the principle that the application of national law must not hinder the application or the effectiveness of Community law requires that the interests of the Community must be taken fully into consideration in the application of provisions such as Articles 4.49 and 4.57 of the AWB, which, according to the national court, give the national administrative authorities a discretionary power to recover sums unduly paid and which permit the recipient of such sums to rely, in their defence, on the principle of the protection of legitimate expectations (see, to that effect, Deutsche Milchkontor and Others , cited above, paragraph 32; Joined Cases C‑80/99 to C‑82/99 Flemmer and Others , cited above, paragraph 61; and Huber , cited above, paragraph 57).
56. In this respect, it should be pointed out that it has been held that the system of subsidies developed in the Community rules is based, inter alia, on compliance by the recipient with a series of conditions of entitlement to financial assistance. If the recipient does not fulfil all his obligations, it follows from Article 24(2) of Regulation No 4253/88 that the Commission is entitled to reconsider the scope of its obligations. With regard to the application of Article 23(1) of the regulation, in a case in which the recipient has not implemented the training programme in accordance with the conditions to which the grant of assistance was made subject, the recipient cannot rely on the principles of protection of legitimate expectations and acquired rights in order to secure payment of the balance of the assistance initially granted (see, to that effect, Case T‑142/97 Branco  v Commission  [1998] ECR II‑3567 paragraphs 97 and 105 (an appeal was dismissed by the order in Case C‑453/98 P Branco  v Commission  [1999] ECR I‑8037), and Case T‑182/96 Partex  v Commission  [1999] ECR II‑2673, paragraph 190 (an appeal was dismissed by the order of 8 March 2001 in Case C‑465/99 P, not published in the ECR)). Finally, the principle of the protection of legitimate expectations may not be relied upon by a recipient which has committed a manifest infringement of the rules in force (see Case 67/84 Sideradria  v Commission  [1985] ECR 3983, paragraph 21).