Ministre de l’Intérieur, de l’Outre-mer, des Collectivités territoriales et de l’Immigration v Chambre de commerce et d'industrie de l'Indre.
Date: 2011-12-21
29. In that regard, Community funding of a project is, under Article 7(1) of Regulation No 2052/88, conditional upon the recipient complying with procedures for the award of ‘public service contracts’, within the meaning of Directive 92/50, when that recipient is a ‘contracting authority’, within the meaning of that directive, and the public contract through which the recipient intends to implement the project exceeds the threshold laid down in Article 7 of Directive 92/50 (see, to that effect, Case C‑44/96 Mannesmann Anlagenbau Austria and Others [1998] ECR I‑73, paragraphs 48 and 49).
30. Pursuant to Article 23(1) of Regulation No 4253/88, the Member States are to take, in order to guarantee completion of operations carried out by public or private promoters, the necessary measures in implementing the operations to verify on a regular basis that operations financed by the European Union 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 Joined Cases C‑383/06 to C‑385/06 Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening and Others  [2008] ECR I‑1561, paragraph 37).
32. Pursuant to the first subparagraph of Article 23(1) of Regulation No 4253/88, read in conjunction with Article 7(1) of Regulation No 2052/88, where an examination of an operation financed by the ERDF reveals a breach of the conditions laid down for the implementation of that operation, in the present case the condition that European Union legislation on public procurement be complied with when the recipient of the funding is a contracting authority, the Member State which has granted financial assistance from the ERDF may, in order to prevent and to take action against irregularities, revoke that assistance and require repayment thereof from the recipient (see, to that effect, Case C‑271/01 COPPI [2004] ECR I‑1029, paragraph 48).
33. In that regard, Regulation No 4253/88 is the relevant legal basis for recovery and not Regulation No 2988/95 which merely lays down general rules for supervision and penalties for the purpose of safeguarding the European Union’s financial interests. Recovery must therefore be carried out on the basis of Article 23(1) of Regulation No 4253/88 (see Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening and Others , paragraph 39).
34. It must however be recalled that the exercise of any discretion, by the Member State in question, to decide whether or not it would be expedient to demand repayment of European Union funds unduly or irregularly granted would be inconsistent with the duty imposed on its authorities by the first subparagraph of Article 23(1) of Regulation No 4253/88 to recover any amounts unduly or irregularly paid (see Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening and Others , paragraph 38).
35. It follows 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 (see Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening and Others , paragraph 40).
38. In that regard, it must be noted, first, that the infringement of obligations whose observance is of fundamental importance to the proper functioning of a Community system, such as the obligations resulting from Directive 92/50 concerning the implementation of projects financed by the ERDF, may be penalised by forfeiture of a right conferred by European Union legislation (see, to that effect, Case C‑104/94 Cereol Italia  [1995] ECR I‑2983, paragraph 25; Case C‑500/99 P Conserve Italia v Commission  [2002] ECR I‑867, paragraphs 100 to 102; and order of 16 December 2004 in Case C‑222/03 P AIPO v Commission , paragraph 53).
39. Secondly, the recovery of sums lost as a result of an irregularity or negligence does not apply only where the operation being financed by Structural Funds has not been carried out in whole or in part (see, to that effect, Case C‑240/03 P Comunità montana della Valnerina  v Commission  [2006] ECR I‑731, paragraph 77).
40. Although it certainly cannot be ruled out, as the Commission has stated, that, in accordance with the principle of proportionality, the finding of a minor irregularity should lead only to a partial reimbursement of the amounts paid, it must nevertheless be made clear that, in any event, where, in the context of a project financed by the ERDF, the recipient is found to have infringed one of the fundamental obligations laid down by Directive 92/50, for example by having decided to award a public service contract before the launch of the tendering procedure and by having, in addition, failed to publish a notice in the Official Journal of the European Union , only the possibility that such an irregularity may be penalised by the complete cancellation of the aid can produce the deterrent effect required to ensure the proper management of Structural Funds (see, by analogy, Conserve Italia  v Commission , paragraph 101).
44. The concept of ‘irregularity’, within the meaning of Regulation No 2988/95, refers to the infringement of a provision of European Union law resulting from an act or omission by an economic operator; consequently the rule concerning the limitation period laid down in the first subparagraph of Article 3(1) of that regulation is not intended to apply to proceedings in respect of irregularities resulting from errors on the part of the national authorities granting a financial advantage in the name and on behalf of the European Union budget (see, to that effect, Case C‑281/07 Bayerische Hypotheken- und Vereinsbank  [2009] ECR I‑91, paragraphs 20 to 22).
46. Since, as is clear, in particular, from Article 7(1) of Regulation No 2052/88, the Structural Funds cannot be used to finance operations carried out in breach of Directive 92/50, the breach by the recipient of an ERDF subsidy, in its capacity as contracting authority, of procurement rules on public service contracts for the purpose of implementing a subsidised operation involves an unjustified item of expenditure and thus prejudices the European Union budget.
47. Indeed, it should be noted that even irregularities having no specific financial impact may be seriously prejudicial to the financial interests of the European Union (see Case C‑199/03 Ireland  v Commission  [2005] ECR I‑8027, paragraph 31).
48. As regards the fact that the competent authorities were informed by the recipient of the subsidy of its choice of contractor even before the launch of the tendering procedure for awarding the public contract in question, it does not, as such, have any effect on the classification of ‘irregularity’, within the meaning of Article 1, second subparagraph, of Regulation No 2988/95 (see, by analogy, Case C‑94/05 Emsland-Stärke  [2006] ECR I‑2619, paragraph 62).
52. By adopting Regulation No 2988/95, and in particular the first subparagraph of Article 3(1) thereof, the European Union legislature intended to establish a general rule on limitation which was applicable in that area and by which it intended, first, to define a minimum period applied in all the Member States and, secondly, to waive the possibility of recovering sums wrongly received from the European Union budget after the expiry of a four-year period after the irregularity affecting the payments at issue was committed (Case C‑131/10 Corman  [2010] ECR I‑0000, paragraph 39, and Joined Cases C‑201/10 and C‑202/10 Ze Fu Fleischhandel and Vion Trading [2011] ECR I‑0000, paragraph 24).
53. That limitation rule is applicable to the irregularities referred to in Article 4 of Regulation No 2988/95 which are detrimental to the European Union’s financial interests (see Case C‑278/02 Handlbauer [2004] ECR I‑6171, paragraph 34, and Josef Vosding Schlacht-, Kühl- und Zerlegebetrieb and Others , paragraph 22).
56. In respect of such a breach of the tendering rules laid down by Directive 92/50, which was adopted in order to eliminate barriers to the freedom to provide services and to protect the interests of traders established in a Member State who wish to offer services to contracting authorities established in another Member State (see, in particular, Case C‑19/00 SIAC Construction  [2001] ECR I‑7725, paragraph 32), it should be recalled that the adverse effect on the freedom to provide services arising from the infringement of Directive 92/50 must be found to subsist throughout the entire performance of the contracts concluded in breach of the directive (see Joined Cases C‑20/01 and C‑28/01 Commission  v Germany  [2003] ECR I‑3609, paragraph 36, and Case C‑503/04 Commission  v Germany  [2007] ECR I‑6153, paragraph 29).
57. Indeed, although it is true that certain provisions of the public procurement directives permit the Member States to preserve the effects of contracts concluded in breach of those directives and thus seek to protect the legitimate expectations of the parties to such contracts, the effect of those provisions nevertheless cannot be, unless the scope of the FEU Treaty provisions establishing the internal market is to be reduced, that the contracting authority’s conduct vis-à-vis the European Union budget is regarded as in conformity with European Union law following the conclusion of such contracts (see, to that effect, Joined Cases C‑20/01 and C‑28/01 Commission  v Germany , paragraph 39, and Case C‑503/04 Commission  v Germany , paragraph 33).
60. As regards the issue of whether the transmission of an audit report finding that public procurement rules were infringed constitutes an act of investigation or legal proceedings concerning the irregularity such as to interrupt the limitation period pursuant to the third subparagraph of Article 3(1) of Regulation No 2988/95, it should be recalled that, in general, limitation periods fulfil the function of ensuring legal certainty and that such a function would not be wholly fulfilled if the limitation period referred to in Article 3(1) of Regulation No 2988/95 could be interrupted by any act relating to a general check by the national authorities which bears no relation to any suspicion concerning the existence of irregularities regarding sufficiently precisely circumscribed transactions ( Handlbauer , paragraph 40).
61. However, when the national authorities send a person a report drawing attention to an irregularity in which that person is said to have played a part in connection with a specific operation, ask the person for further information concerning that operation or apply a penalty to the person in connection with that operation, those authorities adopt acts relating to investigation or legal proceedings concerning the irregularity which are sufficiently specific for the purposes of the third subparagraph of Article 3(1) of Regulation No 2988/95 (Case C‑367/09 SGS Belgium and Others [2010] ECR I‑0000, paragraph 69).
64. Under the possibility provided for in that provision, the Member States retain wide discretion with regard to the fixing of longer limitation periods which they intend to apply in cases involving an irregularity that is detrimental to the European Union’s financial interests ( Corman , paragraph 54).
65. However, in light of the objective of protecting the European Union’s financial interests, an objective for which the European Union legislature considered that a limitation period of four, or indeed even three, years was already in itself sufficient to enable the national authorities to bring proceedings in respect of an irregularity detrimental to those financial interests and capable of leading to the adoption of a measure such as recovery of a wrongly obtained advantage, it is apparent that to grant those authorities a period of 30 years goes beyond what is necessary for a diligent public service ( Ze Fu Fleischhandel and Vion Trading , paragraph 43).