Keywords
Summary

Keywords

1. Actions for failure to fulfil obligations – Non-compliance with the obligation to recover aid granted – Defences – Absolute impossibility of implementation – Criteria for assessment

(Arts 10 EC and 88(2) EC; Council Regulation No 659/1999, Art. 14(3))

2. State aid – Recovery of unlawful aid – Obligation – Recipient subject to collective proceedings – Determination of liability in the event of a transfer of assets – Beneficiary of competitive advantage

(Art. 88(2) EC)

3. Actions for failure to fulfil obligations – Non-compliance with a Commission decision concerning State aid – Failure to implement the decision – Court’s obligation to examine a plea alleging failure to inform the Commission about implementing measures – None

(Art. 88(2) EC)

Summary

1. The only defence available to a Member State in opposing an application by the Commission under Article 88(2) EC for a declaration that it has failed to fulfil its obligations is to plead that it was absolutely impossible for it properly to implement the decision ordering the recovery. In the event of difficulties, the Commission and the Member State must, pursuant to the duty of genuine cooperation under Article 10 EC, work together in good faith with a view to overcoming those difficulties whilst fully observing the Treaty provisions.

The condition that it be absolutely impossible to implement a decision is not fulfilled where the Member State merely informs the Commission of the legal, political or practical difficulties which could be involved in implementing the decision, without taking any real steps to recover the aid from the undertakings concerned, and without proposing to the Commission any alternative arrangements for implementing the decision which enable those difficulties to be overcome. The difficulties, concerning the identification of the recipients, the calculation of the amount of the aid to be recovered and the choice and implementation of recovery procedures, are internal difficulties caused by the national authorities’ own acts or omissions.

(see paras 44-46, 50)

2. The re-establishment of the previous situation and the elimination of the distortion of competition resulting from unlawfully paid aid may, in principle, with respect to recipient undertakings which have ceased their activity and are subject to collective proceedings, be achieved by registration of the liability relating to the repayment of the aid in question in the schedule of liabilities. If the period for the presentation of claims has expired, the national authorities must, where such a procedure exists and is still available, apply any procedure to lift a time-bar so as to allow the presentation of claims out of time. Where the recipients have ceased their activity and transferred their assets the national authorities must check whether the financial conditions of the transfer complied with market conditions. If such is the case, the aid element was assessed at the market price and included in the purchase price, so that the buyer cannot be regarded as having benefited from an advantage in relation to other market operators. Otherwise, it cannot be ruled out that the transferee may be required to repay the aid in question where it is established that it continues to benefit from the competitive advantage linked with the receipt of the aid. For the purposes of checking the financial conditions of the transfer, the national authorities may take into consideration, in particular, the form of the transfer, for example, public tendering, deemed to ensure that a sale takes place under market conditions or any expert’s report prepared at the time of the transfer. Where the assets have been acquired by a number of different buyers, there is nothing to prevent the financial conditions of each of the transactions from being checked for their compliance with market conditions. In the case of a privately negotiated transfer of assets, the recovery of the aid from the transferee cannot be dependent on an express reference in the legal instrument of a transfer of that aid. Recovery can take place where the transferee should have been aware of the existence of the aid and of a review procedure instituted by the Commission.

In the light of those facts, a defendant Member State may not, in proceedings for a declaration that it has failed to fulfil its obligations, simply make general and abstract statements without referring to specific individual cases, analysed in the light of all the steps actually taken to implement the decision.

(see paras 56-63)

3. In an action for failure to fulfil obligations brought by the Commission under Article 88(2) EC, the Court does not need to examine the head of claim seeking a declaration that a Member State has failed to inform the Commission of the measures to implement a decision declaring an aid scheme incompatible with the common market and requiring recovery of aid granted, where that Member State did not in fact implement the decision within the prescribed period.

(see para. 67)