Joined Cases T-127/99, T-129/99 and T-148/99

Transcription

1 Joined Cases T-127/99, T-129/99 and T-148/99 Territorio Histórico de Álava Diputación Foral de Álava and Others v Commission of the European Communities (State aid Concept of State aid Tax measures Selective nature Justification owing to the nature or overall structure of the tax system Compatibility of the aid with the common market) Judgment of the Court of First Instance (Third Chamber, Extended Composition), 6 March 2002 II-1283 Summary of the Judgment 1. Actions for annulment Natural or legal persons Measures of direct and individual concern to them Commission decision declaring certain aid to be incompatible with the common market Action brought by the public-sector undertaking and the regional authority which granted that aid Whether admissible (Art. 230, fourth para., EC) II

2 SUMMARY JOINED CASES T-127/99, T-129/99 AND T-148/99 2. State aid Definition Sale of assets by a public authority on preferential terms Whether included (EC Treaty, Art. 92(1) (now, after amendment, Art, 87(1) EC)) 3. State aid Definition Sale of a plot of land by a public-sector undertaking Occupation of land by purchaser free of charge prior to payment of the purchase price Whether included Assessment criterion Normal conduct of a private undertaking 4. State aid Definition Aid granted by regional or local entities Whether included 5. State aid Definition Selective nature of the measure National legislation establishing a tax credit General measure conferring on the administration discretion in granting tax concessions Whether included 6. State aid Definition Selective nature of the measure Objective criteria for application Irrelevant 7. State aid Definition Specific tax measure Selective nature of the measure Justification based on the nature or overall structure of the tax system Excluded 8. State aid Definition Selective nature of the measure Measure intended to create or maintain employment Irrelevant 9. State aid Existing and new aid Definition Measures altering existing aid or initial plans notified to the Commission Treated as new aid (EC Treaty, Art. 93(3) (now Art. 88(3) EC)) II

3 DIPUTACIÓN FORAL DE ALAVA AND OTHERS v COMMISSION 10. State aid Planned aid Notification to the Commission General aid scheme Obligation (EC Treaty, Art. 93(3) (now Art. 88(3) EC» 11. State aid Affecting trade between Member States Prejudicial to competition Assessment criteria (EC Treaty, Art. 92 (now, after amendment, Art. 87 EC)) 12. State aid Commission decision declaring unnotified aid to be incompatible with the common market Obligation to state reasons Scope (EC Treaty, Art. 92(1) (now, after amendment, Art. 87(1) EC) and Arts 93(3) and 190 (now Arts 88(3) EC and 253 EC)) 13. State aid Prohibition Derogations Commission's discretion Assessment of reasons possibly justifying an individual exemption of an agreement Excluded (EC Treaty, Art. 85(3) (now Art. 81(3) EC) and Art. 92(1) (now, after amendment, Art. 87(1) EC)) 14. State aid General aid scheme approved by the Commission Individual aid purporting to be covered by the approval Scrutiny by the Commission Assessment primarily in the light of the approval decision and only secondarily in the light of Article 92 of the Treaty (now Article 87 EC) (EC Treaty, Art. 92 (now, after amendment, Art. 87 EC) and Art. 93 (now Art. 88 EC)) 15. State aid Aid granted in compliance with the procedural rules in Article 93 of the Treaty (now Article 88 EC) Possibility of legitimate expectation on the part of recipients Protection Conditions and limits (EC Treaty, Art. 93 (now Art. 88 EC)) 1. The public-sector undertaking and the intra-state entity which granted State aid are directly and individually concerned by the decision declaring the aid incompatible with the common market. That decision not only affects measures adopted by the applicants, but also prevents those applicants from exercising their own powers, which they enjoy directly under domestic law. (see paras 50-51) II

4 SUMMARY JOINED CASES T-127/99, T-129/99 AND T-148/99 2. The sale of assets by a public authority, on preferential terms, may constitute State aid. In order to determine whether an undertaking received State aid when it acquired an asset from a public-sector undertaking, it is necessary to examine whether the purchasing undertaking bought that asset at a price which it would have been unable to obtain under normal market conditions. The Commission must consider whether a private operator could have required payment of the purchase price on an earlier date and, if that is not the case, whether he could have required a payment in respect of the period during which the land was occupied before payment of the purchase price. (see paras 72-73) In the absence of such an examination, the Commission fails to prove to the requisite legal standard that the purchasing undertaking received State aid within the meaning of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) by virtue of occupying the plot of land free of charge before paying the purchase price. 3. Where a public-sector undertaking sells a plot of land to a private undertaking occupying that land and the purchase price is paid only after several months of occupation, the Commission is entitled to find that the purchasing undertaking occupied that land free of charge. (see paras , ) Nevertheless, the Commission cannot automatically infer from that occupation that the public-sector undertaking granted State aid to the purchasing undertaking. That would be the case only if the conduct of the public-sector undertaking were not the normal conduct of a private undertaking. 4. The fact that a tax credit has been granted on the basis of legislation adopted by an intra-state entity, and not by a Member State, is irrelevant for the purposes of the application of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC). That provision, by referring to aid granted by 'a Member State or through state resources in any form whatsoever', is directed at all aid financed from public resources. It follows that measures II

5 DIPUTACIÓN FORAL DE ALAVA AND OTHERS v COMMISSION adopted by intra-state entities (decentralised, federated, regional or other) of the Member States, whatever their legal status and description, fall, in the same way as measures taken by the federal or central authority, within the ambit of Article 92( 1 ) of the Treaty, if the conditions laid down in that provision are satisfied. (see para. 142) In order to preclude the characterisation of national legislation establishing a tax credit for investments as a general measure, it is not necessary to determine whether the conduct of the administration granting the tax concession is arbitrary. It need only be established that the administration has a discretionary power enabling it, in particular, to vary the amount of, or the conditions for granting, the tax concession according to the characteristics of the investment project submitted for its assessment. 5. Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) requires that, in order to be defined as State aid, a measure must favour 'certain undertakings or the production of certain goods'. The specific or selective nature of a measure therefore constitutes one of the characteristics of State aid. Measures of purely general application do not fall within the ambit of Article 92(1) of the Treaty. However, interventions which, prima facie, apply to undertakings in general may be to a certain extent selective and, accordingly, be regarded as measures designed to favour certain undertakings or the production of certain goods. That is the case, in particular, where the administration called upon to apply a general rule has a discretionary power so far as concerns the application of the measure. (see paras 144, 149, 154) 6. Even if a selective State measure determines its scope on the basis of objective criteria, the fact remains that it is selective in nature and may therefore be treated as State aid within the meaning of Article 92( 1 ) of the Treaty (now, after amendment, Article 87(1) EC). (see para. 163) 7. As regards the assessment of whether a State measure constitutes State aid, the selective nature of the measure may, in II

6 SUMMARY JOINED CASES T-127/99, T-129/99 AND T-148/99 certain circumstances, be justified 'by the nature or overall structure of the system'. If that is the case, the measure avoids application of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC). Thus, a specific tax measure which is justified by the internal logic of the tax system such as the progressiveness of the tax which is justified by the system's aim of redistribution will avoid application of Article 92(1) of the Treaty. In any event, the justification based on the nature or overall structure of the tax system constitutes an exception to the principle that State aid is prohibited and must therefore be interpreted strictly. (see paras , 250) State aid is granted in order to create or protect employment. (see para. 168) 9. Existing aid is aid which existed before the entry into force of the Treaty or entry of the Member State into the European Communities and aid which could be properly put into effect under the conditions laid down in Article 93(3) of the Treaty (now Article 88(3) EC). On the other hand, measures to grant or alter aid, where the alterations may relate to existing aid or initial plans notified to the Commission, must be regarded as new aid subject to the obligation of notification laid down by Article 93(3). (see para. 173) 8. If it were to be considered that reasons relating to the creation or maintenance of employment caused specific measures to fall outside the scope of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC), that provision would have no practical effect. In the large majority of cases, 10. Article 93(3) of the Treaty (now Article 88(3) EC) makes no distinction between individual aid and general aid schemes. II

7 DIPUTACIÓN FORAL DE ÁLAVA AND OTHERS v COMMISSION It follows that, where a Member State or a regional or local authority of a Member State establishes a legislative and/or administrative mechanism involving a general aid scheme, that scheme has to be notified to the Commission. 12. Although in certain cases the very circumstances in which the State aid has been granted may show that it is liable to affect trade between Member States and to distort or threaten to distort competition, the Commission must at least set out those circumstances in the statement of reasons for its decision declaring aid incompatible with the common market. (see paras ) 11. State aid granted to an undertaking in order to enable it to start manufacturing a certain product in a Member State has the effect, in a competitive market, of reducing the opportunities for undertakings established in other Member States to export their products to the market in that Member State. Such aid is therefore likely to affect trade between Member States and to distort competition. Nevertheless, in decisions on unnotified aid, the Commission is not required to demonstrate the real effect of the national measures since that would ultimately favour those Member States which grant aid in breach of the duty to notify laid clown in Article 93(3) of the Treaty (now Article 88(3) EC), to the detriment of those which do notify aid at the planning stage. (see paras 201, 225) (see para. 219) 13. Ascertaining whether State aid is in conformity with the Treaty does not involve assessing reasons which might possibly justify an individual exemption of an agreement, practice or anticompetitive decision, under Article 85(3) of the EC Treaty (now Article 81(3) EC). Since the Commission has proved to the requisite legal standard that the aid granted to an undertaking distorts or threatens to distort competition within the meaning of Article 92(1) of the Treaty (now, after amendment, Article 87(1) EC) II

8 SUMMARY JOINED CASES T-127/99, T-129/99 AND T-148/99 and that it is liable to affect trade between Member States, that aid is, subject to exceptions, incompatible with the common market. expectations and legal certainty from the point of view of both the Member States and traders since individual aid in strict conformity with the decision approving the aid scheme could at any time be called in question by the Commission. (see para. 223) (see para. 228) 14. When the Commission has before it individual aid alleged to be granted in pursuance of a previously authorised scheme, it cannot at the outset examine it directly in relation to the Treaty. Prior to the initiation of any procedure, it must first confine itself to examining whether the aid is covered by the general scheme and satisfies the conditions laid down in the decision approving it. If it did not do so, the Commission could, whenever it examined each individual aid, go back on its decision approving the aid scheme which already involved an examination in the light of Article 92 of the Treaty (now, after amendment, Article 87 EC). This would jeopardise the principles of the protection of legitimate 15. The acknowledgement that an undertaking receiving State aid has a legitimate expectation presupposes, in principle, that the aid was granted in accordance with the provisions of Article 93 of the Treaty (now Article 88 EC). It is considered, in fact, that a trader and a regional authority exercising all due care should normally be able to ensure compliance with that procedure. (see para. 236) II