Action brought on 17 February 2006 — France v Commission

(Case T-56/06)

(2006/C 96/38)

Language of the case: French

Parties

Applicant: French Republic (Paris, France) (represented by: G. de Bergues and S. Ramet, Agents)

Defendant: Commission of the European Communities

Form of order sought

The applicant claims that the Court should:

Pleas in law and main arguments

By decision of 30 June 1997, adopted following a proposal from the Commission and in accordance with the procedure laid down in Directive 92/81/EEC (1), the Council authorised Member States to apply or to continue to apply the existing reduced rates of excise duty or exemptions from excise duty to certain mineral oils when used for specific purposes. By four subsequent decisions, the Council extended this authorisation, the final authorisation period expiring on 31 December 2006. France is authorised to apply these reduced rates or exemptions to heavy fuel oil used as fuel for the production of alumina in the Gardanne region.

In a letter of 30 October 2001 the Commission notified France of its decision to initiate proceedings under Article 88(2) of the EC Treaty relating to the exemption from excise rights on mineral oils used as fuel for alumina production in the Gardanne region (2). On 7 December 2005, in consequence of this procedure, the Commission adopted the disputed decision (3) finding that exemptions from excise duty on mineral oils used as fuel for alumina production in the Gardanne region, the Shannon region and Sardinia, implemented by France, Ireland and Italy respectively, constituted State aid within the meaning of Article 87(1) EC that is in part incompatible with the common market, and thus ordered the Member States concerned to recover all such aid.

France seeks by this action to have that decision annulled in part in so far as it affects the exemption granted by France to the Gardanne region.

In support of its action it relies on several pleas, the first deriving from infringement of the concept of State aid within the meaning of Article 87(1) EC. It submits that the Commission committed an error of law in holding that State aid existed even though not all the conditions required to establish the existence of aid, as laid down in the Altmark case (4), had been fulfilled, particularly the condition that competition be restricted or that the function of the internal market be distorted. It maintains that the Commission cannot, on the one hand, propose that the Council adopt a decision on the foundation of Directive 92/81/EEC authorising an exemption of excise duty and object not to that exemption's being extended and, on the other hand, find that that exemption constitutes State aid incompatible with the common market.

The second plea raised by the applicant alleges a failure to give reasons in that the decision contested contains a contradiction in the Commission's reasoning relating to the finding of a restriction on competition.

The applicant's third plea, submitted in the alternative, is that the demand for recovery set out in Article 5 of the contested decision breaches the principles of protection of legitimate expectations, legal certainty and observance of a reasonable period. It claims that the beneficiaries of the exemption are entitled to rely on the principles of legal certainty and protection of legitimate expectations until the decision in dispute is adopted, rather than until the date of publication of the decision to initiate formal investigation proceedings, as the Commission maintains. The applicant also asserts that the Commission's failure to act for a period of four years between the decision to initiate proceedings and the final decision constitutes a breach of the principles of protection of legitimate expectations, legal certainty and observance of a reasonable period.

(1)  Council Directive of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils

(2)  Published in OJ 2002 C 30

(3)  Decision C (2005) 4436 final, State aid Nos C 78-79-80/2001

(4)  Decision of the Court of 24 July 2004, Altmark Trans, C-280/00, ECR p. I-7747