Judgments nº T-29/15 of The General Court, February 02, 2017

Resolution DateFebruary 02, 2017
Issuing OrganizationThe General Court
Decision NumberT-29/15

(Development cooperation - Annual Action Programme in favour of Myanmar/Burma to be financed from the general budget of the European Union - Budget implementing decision - Modification - Action for annulment - Challengeable act - Admissibility - Obligation to state reasons - Principle of sound financial management - Principle of good administration - Transparency - Remedy - Legitimate expectations)

In Case T-29/15,

International Management Group, established in Brussels (Belgium), represented by M. Burgstaller, C. Farrell, Solicitors, and E. Wright, Barrister,

applicant,

v

European Commission, represented by J. Baquero Cruz and S. Bartelt, acting as Agents,

defendant,

ACTION on the basis of Article 263 TFEU seeking the annulment of Commission Implementing Decision C(2014) 9787 final of 16 December 2014, amending Implementing Decision C(2013) 7682 final on the Annual Action Programme 2013 in favour of Myanmar/Burma to be financed from the general budget of the European Union,

THE GENERAL COURT (Fifth Chamber),

composed, at the time of deliberation, of A. Dittrich, President, J. Schwarcz and V. Tomljenović (Rapporteur), Judges,

Registrar: E. Coulon,

gives the following

Judgment

Background to the dispute

1 On 7 November 2013, the European Commission adopted Implementing Decision C(2013) 7682 final on the Annual Action Programme 2013 in favour of Myanmar/Burma to be financed from the general budget of the European Union (‘the original implementing decision’).

2 Article 1 of the original implementing decision states that the Annual Action Programme 2013 in favour of Myanmar/Burma, constituted by two actions, is approved. The first action, which is described in Annex 1 to that decision, concerns support to peace, reconciliation and development. The second action, which is described in Annex 2 to that decision, consists in a trade development programme.

3 Article 2 of the original implementing decision provides for a budget of EUR 35 million for the implementation of the two actions mentioned in paragraph 2 above.

4 Article 3 of the original implementing decision provides that the budget-implementation tasks under joint management may be entrusted to the entity identified in Annexes 1 and 2 to that decision, ‘subject to the conclusion of the relevant [delegation] agreement’.

5 Annex 2 to the original implementing decision provides, for the single project covered by the second action (‘the project at issue’), for a total cost of EUR 10 million, entirely financed by an EU contribution, which is to be implemented through joint management with an international organisation. The entity designated in point 8.3.1 of that annex is the applicant, International Management Group. It is indicated, inter alia, in that point that that choice is justified because the applicant is already established in Myanmar/Burma and has developed a strong working relationship with many of the beneficiaries of the project at issue and because the project at issue was elaborated jointly between the applicant and the Commission.

6 On 17 February 2014, the European Anti-Fraud Office (OLAF) informed the Commission that it had opened an investigation relating to the legal nature of the applicant as an international organisation (OF/2011/1002) and referred to the possibility of adopting precautionary measures pursuant to Article 7(6) of Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by OLAF and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ 2013 L 248, p. 1) (‘the OLAF regulation’).

7 On 26 February 2014, the Director General of the Commission’s Directorate-General for International Cooperation and Development (‘the Director General’) adopted precautionary measures in relation to the recognition of the legal status of the applicant (‘the precautionary measures’) as an international organisation within the meaning of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ 2012 L 298, p. 1) (‘the 2012 Financial Regulation’).

8 On 25 April 2014, the Director General sent a letter to the applicant. In that letter, he stated, first of all, that, following questions raised by the European Parliament in the context of the annual discharge of the 2012 budget concerning the applicant’s status as an international organisation, the Commission had exchanged a number of letters with the applicant, from 16 December 2013 to 4 April 2014. Those exchanges were intended to allow the applicant to establish that it constituted an international organisation. Next, the Director General indicated that several EU Member States had disputed the applicant’s assertion that they were members, or establishing members, of the international organisation which the applicant claims to be. In addition, the Secretariat General of the United Nations (UN) had stated that the applicant was not a specialised agency. Furthermore, there were doubts regarding the powers of the persons who represented their countries at the time when the applicant was established. The Director General also indicated that, in the light of the abovementioned new factors, he had adopted, as the responsible authorising officer, precautionary measures intended to suspend the contractual procedures involving the applicant, as long as its legal status had not been clarified. However, those measures concerned only the projects that might be granted to the applicant as an international organisation, and not the other projects that might be awarded to it further to a tendering procedure or a call for proposals. Lastly, the Commission noted that, under the original implementing decision, it enjoyed a discretion to conclude an agreement with the applicant and that that decision did not produce legal effects vis-à-vis the applicant.

9 By letter of 17 June 2014, OLAF informed the applicant that an investigation had been opened in which it was considered to be a person concerned. According to OLAF, that investigation related to possible irregularities in the attribution of EU funds to the applicant linked to its legal nature (‘the OLAF investigation’).

10 By letter of 11 July 2014, the Director General replied to the letters of 15 May 2014 and 10 June 2014, in which the applicant had requested clarification of the new elements relating to its legal status contained in the letter of 25 April 2014. In that letter of 11 July 2014, the Director General informed the applicant that it was a person concerned in the OLAF investigation and that OLAF would remain, on behalf of the Commission, the applicant’s sole interlocutor for questions relating to the latter’s legal status.

11 On 23 October 2014, the applicant sent a letter to the Commission in which it suggested, inter alia, that the Commission directly engage the applicant under a grant procedure for the implementation of the budget for the project at issue.

12 On 15 December 2014, the Commission received the final report of the OLAF investigation along with a number of administrative and financial recommendations.

13 On 16 December 2014, the Commission adopted Implementing Decision C(2014) 9787 final amending the original implementing decision (‘the contested decision’). The contested decision contains a single article, in which the Commission states that Annex 2 to the original implementing decision is replaced by the annex which is attached to the contested decision (‘the new annex’).

14 In points 1 and 4.3 of the new annex, the Commission states that the budget for the project at issue would be implemented under indirect management with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (‘GIZ’).

15 Also on 16 December 2014, the Commission informed the applicant, in reply to a letter that the latter had sent to it on 11 December 2014, that ‘since the qualification of your Organisation is currently being questioned, our Director General informed you of his decision to put on hold the use of contractual procedures applicable to international organisations with regards to [your organisation], until more certainty is available on your legal status’. The Commission also indicated that, ‘while this decision does not affect the possibility of considering the conclusion of a grant contract, this modality falls under another management mode which is not the one corresponding to [the project at issue]’.

Procedure and forms of order sought

16 The applicant brought the present action by application lodged at the Court Registry on 21 January 2015. By means of a separate document lodged on the same day, the applicant requested that the action be decided under an expedited procedure, in accordance with Article 76a of the Rules of Procedure of the General Court of 2 May 1991.

17 By decision of 17 February 2015, the Court (Fifth Chamber) rejected the application for an expedited procedure.

18 By document lodged at the Court Registry on 24 March 2015, the Commission raised an objection of inadmissibility in accordance with Article 114(1) of the Rules of Procedure of 2 May 1991. The applicant submitted its observations on that objection on 7 May 2015.

19 By order of the Court of 30 June 2015, the decision on that objection and the decision on costs were reserved for the final judgment.

20 The reply was lodged at the Court Registry on 19 November 2015.

21 The rejoinder was lodged at the Court Registry on 11 January 2016.

22 On 13 January 2016, the applicant lodged an offer of further evidence with the Court Registry, in accordance with Article 85(3) of the Rules of Procedure, containing an application for a measure of inquiry requesting the Court to order the Commission to produce certain documents. The...

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