1.

The dispute in the present case arose from a legislative measure adopted in 1989 by the Region of Sicily, which provided for the payment of a compensation to the owners of animals slaughtered as a result of their being affected by certain diseases. Over the years, that compensation was financed several times through legislation adopted by the Region of Sicily. AU, a Sicilian livestock farmer, sought payment of this compensation before the national courts on the basis of the 2005 regional statute, the most recent measure to finance that compensation. The question before the Court is whether that compensation constitutes State aid within the meaning of Article 107(1) TFEU, and, if so, whether it was implemented in breach of Article 108(3) TFEU.

2.

The difficulty lies in the fact that, although the initial 1989 legislation and several financing statutes were the subject of an authorisation decision by the Commission, that was not the case for the 2005 statute. The question thus arises whether the latter statute is covered by the authorisation given by the Commission in respect of earlier financing legislation.

3.

Therefore, this case presents the Court with an opportunity to provide guidance on the notions of ‘new aid’, which, as such, must be notified to the Commission before being implemented, and of ‘existing aid’, which is not subject to that requirement either because it has already been authorised or (inter alia) because it amends, to a limited extent, aid already authorised.

4.

Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] ( 2 ) provides:

‘For the purpose of this Regulation:

…

…’

5.

Article 1 of Sicilian Regional Law No 12/1989 ( 3 ) provides:

‘1.   For the remediation of bovine farms affected by tuberculosis, brucellosis and leucosis, and of ovine and caprine farms affected by brucellosis, in accordance with the laws of 9 June 1964, No 615, of 23 January 1968, No 33, and of 23 January 1968, No 34, as subsequently amended and supplemented, compensation shall be granted to owners of bovine animals slaughtered and/or culled as a result of being affected by tuberculosis, brucellosis and leucosis, and of ovine and caprine animals slaughtered and/or culled as a result of being affected by brucellosis, in addition to the compensation provided for in the national provisions in force, to the extent indicated in the table annexed to this law.

…

4.   For the same purposes as those referred to in the preceding paragraphs and in order to facilitate the carrying out of remediation measures on livestock farms, a fee of ITL 2000 shall be paid, in addition to that provided for by the national provisions in force, to veterinary professionals authorised to carry out the operations referred to in ministerial decrees of 1 June 1968 and 3 June 1968, for each bovine animal inspected. In any event, total compensation may not exceed ITL 3000.

5.   For the purposes of this Article, expenditure of ITL 7000 million for the current financial year and ITL 6000 million for each of the financial years 1990 and 1991 shall be authorised.’

6.

Article 25(16) of Sicilian Regional Law No 19/2005 ( 4 ) states:

‘In pursuit of the objectives laid down in Article 1 of [Sicilian Regional Law No 12/1989], pursuant to and in accordance with the provisions of Article 134 of Sicilian Regional Law of 23 December 2000, No 32, expenditure of EUR 20000000 is authorised for the payment of amounts due from local health authorities in Sicily to owners of animals slaughtered as a result of being affected by infectious diseases in the period between 2000 and 2006, and for payment of the fee to veterinary professionals involved in remediation activities during that period. For the purposes of this paragraph, the expenditure of EUR 10000000 (base provision 10.3.1.3.2, chapter 417702) is authorised for the 2005 financial year. For subsequent financial years, arrangements shall be made pursuant to Article 3(2)(i) of Regional Law of 27 April 1999, No 10, as amended.’

7.

AU, a livestock farmer, sought payment of the compensation provided for, originally, by Article 1 of Sicilian Regional Law No 12/1989 and subsequently by Article 25(16) of Sicilian Regional Law No 19/2005 for operators in the livestock sector forced to slaughter livestock infected with brucellosis.

8.

AU applied to the Giudice unico del Tribunale di Catania (Single-Member District Court, Catania, Italy) for an order directing the Azienda Sanitaria Provinciale di Catania (‘the ASPC’) to pay EUR 11 930.08, by way of compensation for the slaughter of animals affected by infectious diseases. By order No 81/08, the Giudice unico del Tribunale di Catania (Single-Member District Court, Catania) granted that application.

9.

On 21 April 2008, the ASPC applied to have order No 81/08 set aside by the Giudice unico del Tribunale di Catania (Single-Member District Court, Catania). By judgment No 2141/2011 of 3/8 June 2011, the Giudice unico del Tribunale di Catania (Single-Member District Court, Catania) granted the application and set aside order No 81/08.

10.

On 23 July 2012, AU brought an appeal before the Corte d’appello di Catania (Court of Appeal, Catania, Italy), seeking to have judgment No 2141/2011 set aside. By judgment No 1469/2013 of 24 July 2013, the Corte d’appello di Catania (Court of Appeal, Catania) upheld the appeal and revised judgment No 2141/2011, dismissing the ASPC’s application to have order No 81/08 set aside.

11.

Before the Corte d’appello di Catania (Court of Appeal, Catania), the ASPC argued, in particular, that the compensation provided for by Article 25(16) of Sicilian Regional Law No 19/2005 constituted State aid which could not be put into effect until the Commission had declared it compatible with the internal market, which it had not. The Corte d’appello di Catania (Court of Appeal, Catania) rejected that argument on the ground that, first, by decision of 11 December 2002, ( 5 ) the Commission had assessed the compatibility with the internal market of the regional statutes which, over the years and until 1997, financed the measure provided for by the substantive rule laid down in Article 1 of Sicilian Regional Law No 12/1989, namely Article 11 of Sicilian Regional Law No 40/1997 ( 6 ) and Article 7 of Sicilian Regional Law No 22/1999; ( 7 ) and that, second, the Commission’s finding, in that decision, that such regional statutes were compatible with the internal market extended to the Article 25(16) of Sicilian Regional Law No 19/2005, which also financed the measure provided for by Article 1 of Sicilian Regional Law No 12/1989.

12.

On 7 March 2014, the ASPC brought an appeal against the judgment of the Corte d’appello di Catania (Court of Appeal, Catania) before the Corte suprema di cassazione (Supreme Court of Cassation, Italy).

13.

The Corte suprema di cassazione (Supreme Court of Cassation) stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

14.

Written observations were submitted by the ASPC, the Italian Republic and the European Commission. Due to the Covid-19 pandemic, the hearing scheduled for 30 April 2020 was cancelled. Instead, the questions for oral response sent to the parties in advance of the hearing were converted into questions for written response addressed to the interested persons referred to in Article 23 of the Statute of the Court of Justice of the European Union. Moreover, by way of measures of organisation of procedure provided for in Article 62(1) of the Rules of Procedure, the Italian Republic was requested to answer additional questions. The ASPC, the Italian Republic and the Commission replied to the questions within the time limits set by the Court.

15.

By its first question, the referring court asks the Court of Justice, in essence, whether the compensation provided for by Article 1 of Sicilian Regional Law No 12/1989 in favour of owners of animals slaughtered as a result of being affected by certain infectious diseases (‘the compensation at issue’) and financed by Article 25(16) of Sicilian Regional Law No 19/2005, constitutes State aid within the meaning of Article 107(1) TFEU.

16.

By its second question, the referring court asks whether, if the first question is answered in the affirmative, Article 25(16) of Sicilian Regional Law No 19/2005 should be regarded as ‘compatible with … [Articles 107 and 108 TFEU], in view of the reasons that led the [Commission], by means of [the 2002 decision], to take the view … that similar provisions contained in Article 11 of Sicilian Regional Law No 40/1997 and Article 7 of Sicilian Regional Law No 22/1999 were compatible with [Articles 107 and 108 TFEU]’. ( 9 )

17.

As requested by the Court, I will limit myself in this Opinion to examining the second question referred. I will thus assume, for the sake of argument, that the compensation at issue constitutes State aid within the meaning of Article 107(1) TFEU.

18.

The Commission submits that the second question referred is inadmissible as the Court does not have jurisdiction to give a ruling on the compatibility of aid measures with the internal market.

19.

I consider that the Court has jurisdiction to answer the second question.

20.

It is true that, according to settled case-law, the Court does not have jurisdiction to rule upon the compatibility of State aid or an aid scheme with the internal market, since that assessment falls within the exclusive competence of the Commission, subject to review by the Courts of the European Union. ( 10 )

21.

However, it seems to me that, by its second question, as reproduced in point 16 above, the referring court is not asking the Court whether the compensation at issue is compatible with the internal market. I stress that that referring court itself notes, in the order for reference, that ‘it is not for the national court to rule on the compatibility of [the compensation at issue] with the internal market, since that assessment … lies within the exclusive remit of the Commission’.

22.

In light of the reference in the second question to the 2002 decision, it seems to me that the referring court seeks rather to ascertain whether Article 25(16) of Sicilian Regional Law No 19/2005 is covered by the 2002 decision, with the result that that measure did not have to be notified to and authorised by the Commission before being implemented.

23.

In that regard, I note that, in the context of the State aid control system, the procedure differs according to whether the aid is ‘existing’ aid — which, as will be explained below, would be the case of the compensation at issue, should it be regarded as covered by the 2002 decision — or ‘new’ aid. Whereas, pursuant to Article 108(3) TFEU, new aid must be notified to the Commission in due time and may not be implemented before a final decision has been adopted by the Commission, existing aid may, according to Article 108(1) TFEU, be lawfully implemented so long as the Commission has made no finding of incompatibility. Therefore, unlike new aid, there is no requirement to notify existing aid to the Commission. ( 11 )

24.

Consequently, it seems to me that, by its second question, the referring court is asking whether, given that similar provisions have been authorised previously by the 2002 decision, Article 25(16) of Sicilian Regional Law No 19/2005 constitutes existing aid within the meaning of Article 1(b) of Regulation No 659/1999.

25.

Contrary to what the Commission argues, according to case-law, the Court can provide guidance to the referring court on the interpretation of EU law in order to enable it to determine whether a national measure constitutes existing aid or new aid. ( 12 )

26.

I conclude that the Court has jurisdiction to answer the second question referred.

27.

I will examine below, first, whether Article 25(16) of Sicilian Regional Law No 19/2005 constitutes existing aid that, as such, is not required to be notified before implementation. Secondly, as I consider that this is not the case, I will verify whether, as the Italian Government submits, that measure may nonetheless be exempted from the notification requirement under Article 108(3) TFEU on the ground that it benefits from the block exemption provided for by Commission Regulation (EU) No 702/2014 ( 13 ), or whether, as the Commission suggests, that compensation may be exempted from the same requirement because it constitutes de minimis aid within the meaning of Commission Regulation (EU) No 1408/2013. ( 14 )

28.

The ASPC submits that Article 25(16) of Sicilian Regional Law No 19/2005 is incompatible with Articles 107 and 108 TFEU. According to the ASPC, this is because: first, that measure has not been notified to the Commission; second, in the 2002 decision, the Commission considered that similar measures had been implemented in breach of Article 108(3) TFEU; and, third, the 2002 decision is binding on national courts.

29.

The Italian Government contends that Article 25(16) of Sicilian Regional Law No 19/2005 must be regarded as compatible with Articles 107 and 108 TFEU. In the view of the Italian Government, that legislation fulfils the conditions laid down in Article 26 of Regulation No 702/2014 and it is thus exempted from the notification requirement set out in Article 108(3) TFEU. That legislation should be regarded as compatible with the internal market, given the Commission’s finding, in the 2002 decision, that similar measures fell within the scope of Article 107(3)(c) TFEU. That finding should be confirmed in respect of Article 25(16) of Sicilian Regional Law No 19/2005.

30.

The Commission does not make submissions in respect of the merits of the second question that it considers inadmissible.

31.

I consider that the measures assessed in the 2002 decision constitute existing aid but that Article 25(16) of Sicilian Regional Law No 19/2005 is an alteration to those measures that is not of a purely formal or administrative nature with the result that it must be regarded as new aid, and, as such, it must be notified before implementation.

32.

As mentioned in point 23 above, it is well established that the classification of a State aid measure as existing or new aid has important consequences in terms of its procedural treatment.

33.

According to Article 108(3) TFEU, new aid must be notified to, and authorised by, the Commission before being implemented. New aid granted without the Commission’s authorisation is unlawful. In that case, the Commission must examine whether that aid is compatible with the internal market and, should it find that it is not, the Commission must order its recovery unless this would be contrary to a general principle of Union law. ( 15 ) National courts must draw all necessary inferences from an infringement of Article 108(3) TFEU, in accordance with domestic law, with regard both to the validity of the acts giving effect to the aid and the recovery of financial support granted in disregard of that provision. ( 16 )

34.

So far as existing aid is concerned, it follows from Article 108(1) TFEU that, should the Commission consider that an existing aid scheme is not, or is no longer, compatible with the internal market, the Commission shall propose appropriate measures to the Member State concerned, such as the amendment or the abolition of that scheme. If the Member State accepts those measures, it is bound to implement them. If the Member State does not accept the proposed measures, the Commission may initiate the formal investigation procedure. ( 17 ) It follows that existing aid does not require notification and that it may be implemented lawfully until such time as the Commission finds that it is incompatible with the internal market. ( 18 )

35.

Although the concept of existing aid is mentioned in Article 108(1) TFEU, it is not defined therein. Recourse must therefore be made to the definitions contained in secondary legislation and, in particular, to Regulation No 659/1999.

36.

According to Article 1(b) of Regulation No 659/1999, existing aid means, inter alia, ‘authorised aid’, that is, ‘aid schemes and individual aid which have been authorised by the Commission or by the Council’ (point (ii) of that provision). ( 19 )

37.

Article 1(c) of Regulation No 659/1999 defines ‘new aid’ as ‘all aid … which is not existing aid, including alterations to existing aid’. Alterations to existing aid are defined in Article 4(1) of Commission Regulation (EC) No 794/2004 ( 20 ) as ‘any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the [internal] market’.

38.

The second sentence of Article 4(1) of Regulation No 794/2004 states that ‘an increase in the original budget of an existing aid scheme by up to 20% shall not be considered an alteration to existing aid’. According to Article 4(2) of that regulation, increases in the budget of an authorised aid scheme exceeding 20% constitute alterations that must be notified to the Commission.

39.

According to case-law, the following measures have been considered as alterations to existing aid that are not of a purely formal or administrative nature, and, therefore, constitute new aid: the widening (or the restriction) of the range of beneficiaries of an approved aid scheme; the extension of the duration of that scheme; or (subject to the 20% threshold mentioned in the previous point) increases in the budget allocated to the scheme. ( 21 )

40.

So far as beneficiaries of the authorised aid regime are concerned, the Court has regarded as new aid: an alteration of the criteria used to identify those eligible for an energy tax rebate (previously only undertakings active in the manufacture of goods, then also service providers); ( 22 ) the extension to undertakings in Venice and Chioggia (Italy) of an existing aid scheme for relief from social security contributions in Mezzogiorno (Italy); ( 23 ) and the restriction of the scope ratione personae of the tax regime applicable to professional sports clubs (previously any such club, then only the four professional sports clubs with a positive financial balance during the previous financial year). ( 24 )

41.

As regards temporal extensions to an approved aid scheme, reference may be made, for example, to the judgment of 9 September 2009, Diputación Foral de Álava and Others v Commission (T‑227/01 to T‑229/01, T‑265/01, T‑266/01 and T‑270/01, EU:T:2009:315, paragraphs 232 to 234), upheld on appeal, ( 25 ) whereby the General Court considered that the alteration, first, of the duration of existing tax credits, second, of their eligibility conditions (and, therefore, of the range of beneficiaries), and, third, of the taxable base and of the percentage of those credits, constituted new aid. Similarly, the Court regarded as new aid the 14‑month extension of the application of a preferential tariff for the supply of electricity, which came about consequent to an interim order of a national court. ( 26 )

42.

Regarding increases in the budget of an approved aid scheme, it should be mentioned that, according to case-law, the concept of ‘budget of an aid scheme’ within the meaning of Article 4(1) of Regulation No 794/2004 is not limited to the amount of aid actually allocated. That concept must, on the contrary, be interpreted as referring to the budgetary provision, that is to say, the amounts available to the body responsible for granting aid for that purpose, as notified to the Commission by the Member State concerned and approved by the Commission. ( 27 )

43.

Thus, the Court has considered the following measures to constitute alterations that were not of a purely formal or administrative nature: an increase in the budget allocated to an authorised aid scheme in an amount exceeding 50% (combined with a two‑year extension of that scheme); ( 28 ) an increase in the budget notified for the authorised aid scheme, which amounted to EUR 10 million, by another EUR 10 million; ( 29 ) and an increase in the revenues from the taxes financing several aid schemes, when compared to the projections notified to the Commission (save where that increase remained below the 20% threshold provided for in Article 4(1) of Regulation No 794/2004). ( 30 ) By contrast, the alteration to the system of financing the public broadcasting of a Member State consisting in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable on the basis of occupation of a dwelling or business premises was found not to constitute an alteration to existing aid. The Court noted that the replacement of the broadcasting fee by the broadcasting contribution did not lead to a substantial increase in the compensation received by the public broadcasters. ( 31 )

44.

In the present case, as mentioned in point 11 above, the Commission decided not to raise objections in the 2002 decision to Article 11 of Sicilian Regional Law No 40/1997 or to Article 7 of Sicilian Regional Law No 22/1999 (‘the 1997 and 1999 measures’).

45.

I should explain that the object of the 1997 and 1999 measures was to finance the compensation provided for by Article 1 of Sicilian Regional Law No 12/1989. The measures make express reference to that provision. Article 11 of Sicilian Regional Law No 40/1997 authorised expenditure in the amount of 16 billion Italian lire (ITL) for payment of the compensation due in respect of animals slaughtered in 1993, 1994, 1995, 1996 and 1997. ( 32 ) Article 7 of Sicilian Regional Law No 22/1999 authorised additional expenditure in the amount of ITL 20 billion for the same purpose. ( 33 ) I would emphasise that — on the basis of the documents before the Court — the 1997 and 1999 measures do not appear to have had any impact on the right to compensation or on the features of that compensation, as defined in Article 1 of Sicilian Regional Law No 12/1989.

46.

In the 2002 decision, the Commission considered that the 1997 and 1999 measures constituted State aid within the meaning of Article 107(1) TFEU. The aid was, however, compatible with the internal market because it met the four conditions set out in paragraphs 11.4.2 to 11.4.5 of the Community Guidelines for State aid in the agriculture sector. ( 34 ) First, according to the 2002 decision, the Italian authorities submitted that the diseases subject of the 1997 and 1999 measures, namely tuberculosis, brucellosis and leucosis, were of concern for the public authorities and they were part of a national regulatory framework aimed at preventing, controlling and eradicating such diseases. Secondly, the 2002 decision states that, according to the Italian authorities, both 1997 and 1999 measures had preventive and compensatory objectives. Thirdly, that decision indicates, again in the view of the Italian authorities, that the 1997 and 1999 measures were compatible with the objectives and the provisions of EU veterinary rules. Fourthly, according to the 2002 decision, the Italian authorities emphasised that aid granted under the 1997 and 1999 measures would cover 50% of the damage suffered by livestock farmers, while an additional 30% (as regards bovine animals) or 50% (as regards ovine and caprine animals) would be covered by compensation granted under national, not regional, measures. Consequently, 80% of the damage suffered by the owners of bovine animals and 100% of the damage suffered by the owners of ovine and caprine animals would be covered. The 2002 decision further notes that, in the view of the Italian authorities, any risks of overcompensation would be incurred only in respect of older animals of little genetic value. The Commission noted, in that regard, that a certain degree of overcompensation was acceptable in individual cases, where that overcompensation resulted from the requirements of administrative simplicity where thousands of individual applications had to be processed.

47.

Consequently, the Commission, while regretting that the 1997 and 1999 measures were implemented in breach of Article 108(3) TFEU, ( 35 ) concluded that they fell within the scope of Article 107(3)(c) TFEU and, therefore, they were compatible with the internal market.

48.

It follows that the 1997 and 1999 measures must be regarded as an authorised aid scheme, and, therefore, as existing aid within the meaning of Article 1(b)(ii) of Regulation No 659/1999.

49.

It is thus necessary to examine whether Article 25(16) of Sicilian Regional Law No 19/2005 constitutes an alteration to the 1997 and 1999 measures that is not of a purely formal or administrative nature within the meaning of Article 1(c) of Regulation No 659/1999 and of Article 4(1) of Regulation No 794/2004.

50.

It should be recalled that, according to case-law, as derogations from the general principle of incompatibility of State aid with the internal market, laid down in Article 107(1) TFEU, Commission decisions authorising aid schemes must be interpreted strictly. ( 36 )

51.

In my opinion, Article 25(16) of Sicilian Regional Law No 19/2005 constitutes an alteration of the aid scheme authorised by the 2002 decision that is not of a purely formal or administrative nature.

52.

This is because the object of Article 25(16) of Sicilian Regional Law No 19/2005 is to finance the compensation provided for by Article 1 of Sicilian Regional Law No 12/1989, to which it makes express reference. To that end, it authorises expenditure of EUR 20 million in respect of animals slaughtered between 2000 and 2006. Subject to verification by the referring court and similarly to the 1997 and 1999 measures, ( 37 ) Article 25(16) of Sicilian Regional Law No 19/2005 does not appear to have any impact on the right to the compensation at issue or on any of its features.

53.

It follows that the object of Article 25(16) of Sicilian Regional Law No 19/2005 is, first, to provide for an extension of the compensation at issue (owed to the owners of animals slaughtered between 2000 and 2006; whereas the 1997 and 1999 measures applied only in respect of animals slaughtered between 1993 and 1997), and, second, to increase the budget allocated for that compensation (by EUR 20 million; whereas the 1997 and 1999 measures authorised expenditure of ITL 36 billion, that is, approximately EUR 18592448). ( 38 )

54.

The increase in the budget allocated to the aid scheme, as reproduced in the 2002 decision, appears thus well in excess of the 20% threshold set by Article 4(1) and (2) of Regulation No 794/2004. ( 39 ) This is, obviously, subject to verification by the referring court. Should that court confirm that the increase exceeds the 20% threshold, it would follow that Article 25(16) of Sicilian Regional Law No 19/2005 does not constitute an alteration of a purely formal or administrative nature of the scheme authorised in the 2002 decision. This would be all the more true given that the increase in the budget allocated to the existing aid scheme is combined with a six‑year extension of that scheme. This also follows from the case-law mentioned in points 41 to 43 above.

55.

Moreover, I note that measures similar to Article 25(16) of Sicilian Regional Law No 19/2005 and to the 1997 and 1999 measures, that is, measures whose object was to finance the compensation provided for by Article 1 of Sicilian Regional Law No 12/1989, have been notified to the Commission, which decided not to raise objections in respect of them. According to the information contained in the 2002 decision ( 40 ) – as confirmed by the Italian Government in response to the measures of organisation of procedure – that was the case, first, for Sicilian Regional Law No 5/1993, ( 41 ) which authorised expenditure of ITL 10 billion (approximately EUR 5 million), and was approved by decision of 2 April 1993, ( 42 ) and, second, for Sicilian Regional Law No 28/1995, ( 43 ) which authorised expenditure of ITL 16 billion (approximately EUR 9.7 million) and was approved by decision of 15 September 1995. ( 44 ) This supports my conclusion that Article 25(16) of Sicilian Regional Law No 19/2005, like other financing measures, constitutes new aid that must be notified to the Commission before its implementation.

56.

I also note that Article 1 of Sicilian Regional Law No 12/1989, which appears to be the substantive rule providing for the compensation at issue, ( 45 ) was itself the subject of a Commission decision not to raise objections (‘the 1989 decision’). ( 46 ) In that regard, I emphasise that the question as to whether Article 25(16) of Sicilian Regional Law No 19/2005 must be regarded as an alteration of a purely formal or administrative nature to existing aid must be assessed in respect of the 2002 decision, and not in respect of the 1989 decision. This is because the alteration concerns, in particular, the budget allocated to the authorised aid scheme, which was increased on several occasions, the last increase being the subject of the authorisation accorded by the 2002 decision.

57.

I conclude that a national measure, such as Article 25(16) of Sicilian Regional Law No 19/2005, the sole object of which is to increase the budget allocated to an authorised aid scheme and to provide for a six‑year extension of that scheme, constitutes an alteration to existing aid within the meaning of Article 1(c) of Regulation No 659/1999, unless that increase remains below the 20% threshold laid down in the second sentence of Article 4(1) of Regulation No 794/2004, which is for the referring court to verify.

58.

It follows that Article 25(16) of Sicilian Regional Law No 19/2005 should have been notified to, and authorised by, the Commission before being implemented, in accordance with Article 108(3) TFEU.

59.

It is not disputed that Article 25(16) of Sicilian Regional Law No 19/2005 was not notified to the Commission.

60.

However, as mentioned in point 27 above, Article 25(16) of Sicilian Regional Law No 19/2005 would have been exempted from the notification requirement if, as the Italian Government submits, it had benefited from the block exemption provided for by Regulation No 702/2014, or if, as the Commission suggests, it had constituted de minimis aid within the meaning of Regulation No 1408/2013. I will now examine whether that is the case.

61.

I note that, in its written observations, the Italian Government submitted that Article 25(16) of Sicilian Regional Law No 19/2005 falls within the scope of Regulation No 702/2014. In its view, that regulation is applicable ratione temporis to the present case on account of Article 51 thereof, and, as mentioned in point 29 above, Article 25(16) of Sicilian Regional Law No 19/2005 fulfills the conditions set out in Article 26 of Regulation No 702/2014.

62.

By means of measures of organisation of procedure, the Court asked the interested persons referred to in Article 23 of the Statute of the Court of Justice whether Regulation No 702/2014 was applicable ratione temporis to the present case and whether Article 25(16) of Sicilian Regional Law No 19/2005 met the conditions set out in Article 26 of that regulation.

63.

In response to these questions, the ASPC submitted that Article 25(16) of Sicilian Regional Law No 19/2005 fell outside the scope of Regulation No 702/2014, as defined in Article 1 thereof. In any event, that regional legislation did not meet the conditions laid down in Article 26 of Regulation No 702/2014.

64.

The Italian Government reiterated its position as summarised in point 61 above.

65.

The Commission submitted that Regulation No 702/2014 was applicable ratione temporis, but that it was unlikely that Article 25(16) of Sicilian Regional Law No 19/2005 met the conditions set out in Article 26 of that regulation.

66.

Given the limited information contained in the case-file, I am in no position to determine whether the conditions in Regulation No 702/2014 are met in the present case. Nonetheless, I will endeavour to provide some guidance to the referring court.

67.

In the first place, as the Italian Government and the Commission contend, Regulation No 702/2014 seems to be applicable ratione temporis to the present case.

68.

Regulation No 702/2014 entered into force on 1 July 2014, ( 47 ) that is, most likely ( 48 ) after the compensation at issue was paid to AU. ( 49 )

69.

However, Article 51(1) of Regulation No 702/2014 states that it applies to ‘individual aid granted before [its] entry into force’, provided that such individual aid fulfils the conditions laid down in that regulation.

70.

Therefore, subject to the fulfillment of such conditions, which it is for the referring court to verify, that regulation is applicable to the present case. ( 50 )

71.

In the second place, it should be recalled that, pursuant to Article 3 of Regulation No 702/2014, individual aid granted under aid schemes is compatible with the internal market and is exempted from the notification requirement under Article 108(3) TFEU if it meets the conditions laid down in Chapter I and the specific conditions for the relevant category of aid in Chapter III of that regulation.

72.

As regards the conditions laid down in Chapter I of Regulation No 702/2014, I note, in particular, that none of the notification thresholds listed in Article 4 of that regulation appears to apply; that the compensation at issue meets the transparency requirement as it consists in a grant (see Article 5(2)(a)); and that, in so far as it seeks to compensate the damage suffered by the owners of slaughtered animals, no evidence of an incentive effect is required (see Article 6(5)(d)).

73.

As regards the conditions laid down in Chapter III of Regulation No 702/2014, the relevant category of aid is that defined in Article 26, which concerns inter alia aid for the costs of the prevention, control and eradication of animal diseases and to make good the damage caused by such diseases.

74.

First, the Italian Government submits, in that regard, that Article 25(16) of Sicilian Regional Law No 19/2005 is part of a national programme for the prevention, control or eradication of the animal diseases concerned, as required by Article 26(2) of Regulation No 702/2014. I note that Article 1 of Sicilian Regional Law No 12/1989, the 2002 decision and the ASPC’s answer to the Court’s written questions make reference to another compensation that is provided for by national – not regional – legislation and which is complementary to the compensation at issue. ( 51 )

75.

Secondly, the animal diseases for which compensation is granted pursuant to Article 25(16) of Sicilian Regional Law No 19/2005, namely, tuberculosis and leucosis (as concerns bovine animals) and brucellosis (as concerns bovine, ovine and caprine animals) are referred to in the list of animal diseases established by the World Organisation for Animal Health, ( 52 ) as required by Article 26(4) of Regulation No 702/2014.

76.

Thirdly, the Commission submits that the condition set out in Article 26(6) of Regulation No 702/2014 that aid be paid out within four years from the date of occurrence of the cost or loss caused by the animal disease is not met in the present case. In that regard, I note that the compensation at issue was likely paid to AU at the earliest in 2008, ( 53 ) and that, according to the written observations of the ASPC, it concerned animals slaughtered from 2003 onwards. Should this be correct, at least part of the compensation at issue may have been paid to AU in breach of Article 26(6) of Regulation No 702/2014. This is, again, for the referring court to verify.

77.

Fourthly, the ASPC contends that the compensation at issue does not meet the condition set out in Article 26(7) and (8) of Regulation No 702/2014 in that, rather than cover eligible costs as listed in those provisions, it seeks only to compensate livestock farmers for damage suffered. Moreover, in the ASPC’s view, the calculation of the compensation at issue by reference to the species, the gender and the age of animals does not meet the condition set out in Article 26(9) of the same regulation, which requires the calculation to be based on the market value of the animals slaughtered.

78.

The ASPC’s line of argument is, in my view, unconvincing. Irrespective of the Italian Government’s contention that the compensation at issue can be preventive as well as compensatory, I note that aid within the meaning of Article 26 of Regulation No 702/2014 may have as its sole object the compensation of livestock farmers for the slaughter of animals. This is because that provision, according to the first paragraph thereof, covers not only aid to small- and medium-sized enterprises ‘for the costs of the prevention, control and eradication’ of animal diseases, but also aid ‘to compensate such undertakings for losses caused by those animal diseases’. ( 54 ) Moreover, it seems to me that the seventh, the eighth and the ninth paragraphs of Article 26 of Regulation No 702/2014 apply to different measures. While Article 26(7) concerns ‘prevention measures’, Article 26(8) relates to ‘control and eradication measures’, and Article 26(9) applies to ‘aid to make good the damage caused by animal diseases’. Therefore, should Article 25(16) of Sicilian Regional Law No 19/2005 have as it sole object, as the ASPC submits, the compensation of livestock farmers for the slaughter of animals, the compensation granted on that basis would have to be calculated in a manner consistent with Article 26(9) of Regulation No 702/2014, that is, by reference to ‘the market value of the animals slaughtered’ and to the related ‘loss of income’. In that case, the eligible costs listed in Article 26(7) and (8) cannot be taken into account because those paragraphs apply to other types of aid measures. Finally, I fail to see why, as the ASPC submits, the species, gender and age of slaughtered animals should not be regarded as relevant factors for the purpose of determining their market value.

79.

Fifthly, the referring court will have to verify whether, as the ASPC submits, there has not been any formal recognition of an outbreak, as Article 26(10) of Regulation No 702/2014 requires.

80.

Sixthly, I note that, in the 2002 decision, the Commission showed leniency in respect of the requirement, under Article 26(13) of Regulation No 702/2014, ( 55 ) that the aid granted under Article 26 ‘and any other payments received by the beneficiary’ be limited to 100% of the eligible costs (in the present case, 100% of the market value and related loss of income). As mentioned in point 46 above, in that decision, the Commission accepted, for reasons of administrative simplicity, that there may be a certain degree of overcompensation in individual cases.

81.

Therefore, should the referring court consider that the conditions listed in Chapter I and in Article 26 of Regulation No 702/2014 are met in the present case, it would follow that the Italian authorities did not infringe Article 108(3) TFEU in failing to notify Article 25(16) of Sicilian Regional Law No 19/2005 before it was implemented.

82.

Conversely, should the referring court consider, in particular in the light of point 76 above, that those conditions are not met, that legislation would have been implemented in breach of Article 108(3) TFEU. However, as mentioned in point 60 above, Article 25(16) of Sicilian Regional Law No 19/2005 would nevertheless have been implemented in a manner consistent with that provision if, as the Commission suggested in its answer to the questions put by the Court, it constitutes de minimis aid within the meaning of Regulation No 1408/2013.

83.

In that regard, I note that, although that regulation entered into force on 1 January 2014, ( 56 ) it nonetheless appears to be applicable ratione temporis by virtue of Article 7(1) thereof. That provision, like Article 51(1) of Regulation No 702/2014, states that Regulation No 1408/2013 ‘shall apply to aid granted before its entry into force if the aid fulfils all the conditions laid down [therein]’. In that regard, the reasoning relied on in respect of Regulation No 702/2014 may also be relied on as regards Regulation No 1408/2013. ( 57 )

84.

Pursuant to Article 3(1) of Regulation No 1408/2013, aid measures ‘shall be deemed not to meet all the criteria in [Article 107(1) TFEU], and shall therefore be exempt from the notification requirement in [Article 108(3) TFEU], if they fulfill the conditions laid down in [that regulation]’.

85.

The compensation granted to AU, which amounts to EUR 11 930.08, does not exceed the de minimis ceiling laid down in Article 3(2) of Regulation No 1408/2013 (assuming that, over a period of three fiscal years, AU was not granted additional aid that, combined with that mentioned above, would exceed the de minimis ceiling). It is for the referring court to verify that the cumulative amount of de minimis aid granted to agricultural undertakings in Italy does not exceed the national cap set out in Article 3(3) and in the Annex to that regulation.

86.

I conclude that a national measure such as Article 25(16) of Sicilian Regional Law No 19/2005 may be exempted from the notification requirement set out in Article 108(3) TFEU, provided that it meets the conditions laid down in Chapter I and in Article 26 of Regulation No 702/2014, in particular, the condition under Article 26(6) thereof that aid be paid out within four years from the date of occurrence of the cost or loss caused by the animal disease, which it is for the referring court to verify. Such a measure may further be exempted from the notification requirement if it meets the conditions laid down in Regulation No 1408/2013, which it is also for the referring court to verify.

87.

In the light of the foregoing, I propose that the Court give the following reply to the second question referred by the Corte suprema di cassazione (Supreme Court of Cassation, Italy):