Judgments nº T-270/01 of Court of First Instance of the European Communities, September 09, 2009

• Resolution Date: September 09, 2009
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-270/01

In Cases T-227/01 to T-229/01, T-265/01, T-266/01 and T-270/01,

Territorio Histórico de Álava - Diputación Foral de Álava (Spain),

Comunidad autónoma del País Vasco - Gobierno Vasco (Spain),

represented initially by R. Falcón Tella, and subsequently by M. Morales Isasi and I. Sáenz-Cortabarría Fernández, lawyers,

applicants in Case T-227/01,

supported by

Cámara Oficial de Comercio e Industria de Álava (Spain), represented by I. Sáenz-Cortabarría Fernández and M. Morales Isasi, lawyers,

and by

Confederación Empresarial Vasca (Confebask), established in Bilbao (Spain), represented initially by M. Araujo Boyd and R. Sanz, and subsequently by Araujo Boyd, L. Ortiz Blanco and V. Sopeña Blanco, lawyers,

interveners,

Territorio Histórico de Vizcaya - Diputación Foral de Vizcaya (Spain),

Comunidad autónoma del País Vasco - Gobierno Vasco,

represented initially by R. Falcón Tella, and subsequently by M. Morales Isasi and I. Sáenz-Cortabarría Fernández, lawyers,

applicants in Case T-228/01,

supported by

Cámara Oficial de Comercio, Industria y Navegación de Vizcaya (Spain), represented by I. Sáenz-Cortabarría Fernández and M. Morales Isasi, lawyers,

and by

Confederación Empresarial Vasca (Confebask), established in Bilbao, represented initially by M. Araujo Boyd and R. Sanz, and subsequently by Araujo Boyd, L. Ortiz Blanco and V. Sopeña Blanco, lawyers,

interveners,

Territorio Histórico de Guipúzcoa - Diputación Foral de Guipúzcoa (Spain),

Comunidad autónoma del País Vasco - Gobierno Vasco, represented initially by R. Falcón Tella, and subsequently by M. Morales Isasi and I. Sáenz-Cortabarría Fernández, lawyers,

applicants in Case T-229/01,

supported by

Cámara Oficial de Comercio, Industria y Navegación de Guipúzcoa (Spain), represented by I. Sáenz-Cortabarría Fernández and M. Morales Isasi, lawyers,

and by

Confederación Empresarial Vasca (Confebask), established in Bilbao, represented initially by M. Araujo Boyd and R. Sanz, and subsequently by Araujo Boyd, L. Ortiz Blanco and V. Sopeña Blanco, lawyers,

interveners,

Confederación Empresarial Vasca (Confebask), established in Bilbao, represented by M. Araujo Boyd, L. Ortiz Blanco and V. Sopeña Blanco, lawyers,

applicant in Cases T-265/01, T-266/01 and T-270/01,

v

Commission of the European Communities, represented initially by J. Buendía Sierra, and subsequently by F. Castillo de la Torre and C. Urraca Caviedes, acting as Agents,

defendant,

supported by

Comunidad autónoma de La Rioja (Spain), represented initially by A. Bretón Rodríguez, and subsequently by J. Criado Gámez and I. Serrano Blanco, lawyers,

intervener,

APPLICATION in Cases T-227/01 and T-265/01 for annulment of Commission Decision 2002/820/EC of 11 July 2001 on the State aid scheme implemented by Spain for firms in Álava in the form of a tax credit amounting to 45% of investments (OJ 2002 L 296, p. 1); APPLICATION in Cases T-228/01 and T-266/01 for annulment of Commission Decision 2003/27/EC of 11 July 2001 on the State aid scheme implemented by Spain for firms in Vizcaya in the form of a tax credit amounting to 45% of investments (OJ 2003 L 17, p. 1), and APPLICATION in Cases T-229/01 and T-270/01 for annulment of the Commission decision 2002/894/EC of 11 July 2001 on the State aid scheme implemented by Spain for firms in Guipúzcoa in the form of a tax credit amounting to 45% of investments (OJ 2002 L 314, p. 26),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber, Extended Composition),

composed of M. Vilaras, President, E. Martins Ribeiro, F. Dehousse (Rapporteur), D. -váby and K. Jürimäe, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 16 January 2008,

gives the following

Judgment

Legal context

I - Community law

1 Article 87 EC provides:

-1. Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

-

3. The following may be considered to be compatible with the common market:

(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment;

-

(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;

--

2 Article 88 EC provides:

-1. The Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measures required by the progressive development or by the functioning of the common market.

2. If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 87, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.

-

3. The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the common market having regard to Article 87, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.-

3 Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1), provides:

-For the purpose of this Regulation:

-

(b) -existing aid- shall mean:

(i) - all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;

(ii) authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;

-

(v) aid which is deemed to be an existing aid because it can be established that at the time it was put into effect it did not constitute an aid, and subsequently became an aid due to the evolution of the common market and without having been altered by the Member State. Where certain measures become aid following the liberalisation of an activity by Community law, such measures shall not be considered as existing aid after the date fixed for liberalisation;

(c) -new aid- shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;

-

(f) -unlawful aid- shall mean new aid put into effect in contravention of Article [88](3) [EC];

--.

4 Under Article 2(1) and Article 3 of Regulation No 659/1999 -any plans to grant new aid shall be notified to the Commission in sufficient time by the Member State concerned- and cannot be put into effect -before the Commission has taken, or is deemed to have taken, a decision authorising such aid-.

5 In relation to measures which are not notified, Article 10(1) of Regulation No 659/1999 provides that, -where the Commission has in its possession information from whatever source regarding alleged unlawful aid, it shall examine that information without delay-. Article 13(1) of the same regulation provides that that examination is to result, where appropriate, in a decision to initiate a formal investigation procedure. Article 13(2) of that regulation states that in cases of unlawful aid the Commission is not bound by the time-limits applicable in relation to the preliminary examination and the formal investigation procedure in cases of notified aid.

6 Article 14(1) of Regulation No 659/1999 provides:

-Where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary - The Commission shall not require recovery of the aid if this would be contrary to a general principle of Community law.-

7 The Commission notice on the application of the State aid rules to measures relating to direct business taxation (OJ 1998 C 384, p. 3, -the 1998 notice on tax aid to businesses-) contains, inter alia, provisions relating to the distinction between State aid and general measures. Paragraphs 13 and 14 of that notice provide:

-13. Tax measures which are open to all economic agents operating within a Member State are in principle general measures - Provided that they apply without distinction to all firms and to the production of all goods, the following measures do not constitute State aid:

- tax measures of a purely technical nature -,

- measures pursuing general economic policy objectives through a reduction of the tax burden related to certain production costs -

14. The fact that some firms or some sectors benefit more than others from some of these tax measures does not necessarily mean that they are caught by the competition rules governing State aid. Thus, measures designed to reduce the taxation of labour for all firms have a relatively greater effect on labour intensive industries than on capital intensive industries, without necessarily constituting State aid--.

8 As regards aid connected with an investment, that is defined in footnote No 1 of Annex 1 of the Guidelines on national regional aid (OJ 1998 C 74, p. 9), as amended (OJ 2000 C 258, p. 5), (-the 1998 Guidelines-), as follows:

-Tax aid may be considered to be aid connected with an investment where it is based on the amount invested. In addition, any tax aid may be connected with an...