Ministre de l’Intérieur, de l’Outre-mer, des Collectivités territoriales et de l’Immigration v Chambre de commerce et d'industrie de l'Indre.

• Jurisdiction: European Union
• Celex Number: 62010CJ0465
• ECLI: ECLI:EU:C:2011:867
• Date: 21 December 2011
• Docket Number: C-465/10
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling

Case C-465/10

Ministre de l’Intérieur, de l’Outre-mer, des Collectivités territoriales et de l’Immigration

v

Chambre de commerce et d’industrie de l’Indre

(Reference for a preliminary ruling from the Conseil d’État (France))

(Reference for a preliminary ruling – Protection of the European Union’s financial interests – Regulation (EC, Euratom) No 2988/95 – Article 3 – Structural Funds – Regulation (EEC) No 2052/88 – Regulation (EEC) No 4253/88 – Contracting authority in receipt of a subsidy from the Structural Funds – Failure to comply with public procurement rules by the recipient of an ERDF subsidy – Basis for the obligation to recover European Union subsidies in the case of an irregularity – Concept of ‘irregularity’ – Concept of ‘continuous irregularity’ – Conditions for recovery – Limitation period – Longer national limitation periods – Principle of proportionality)

Summary of the Judgment

1. Economic and social cohesion – Structural assistance – Community financing – Withdrawal of financial assistance because of irregularities – Duty to recover – Legal basis

(Council Regulations No 2052/88, Art. 7(1), and No 4253/88, Art. 23(1), third indent; Council Directive 92/50)

2. Own resources of the European Union – Regulation on the protection of the Union’s financial interests – Irregularity – Meaning

(Council Regulation No 2988/95, Art. 1; Council Directive 92/50)

3. Own resources of the European Union – Regulation on the protection of the Union’s financial interests – Continuous irregularity – Limitation period – Interrupting act

(Council Regulation No 2988/95, Art. 3(1), second and third paras; Council Directive 92/50)

4. Own resources of the European Union – Regulation on the protection of the Union’s financial interests – Proceedings relating to irregularities – Limitation period

(Council Regulation No 2988/95, Art. 3(3))

1. The third indent of Article 23(1) of Regulation No 4253/88 laying down provisions for implementing Regulation No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments, as amended by Regulation No 2082/93, read in conjunction with Article 7(1) of Regulation No 2052/88 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments, as amended by Regulation No 2081/93, constitutes a legal basis enabling national authorities to recover from the recipient – without there being any need for authority to do so under national law – the full amount of a subsidy granted from the European Regional Development Fund on the ground that, in its capacity as contracting authority, within the meaning of Directive 92/50 relating to the coordination of procedures for the award of public service contracts, as amended by Directive 93/36, the recipient has not satisfied the requirements of that directive so far as concerns the award of a public service contract whose purpose was the performance of the operation for which the recipient was granted the subsidy.

(see para. 41, operative part 1)

2. The failure, by a contracting authority receiving a subsidy granted from the European Regional Development Fund, to comply with the public procurement rules laid down by Directive 92/50 relating to the coordination of procedures for the award of public service contracts, as amended by Directive 93/36, when awarding the contract whose purpose is to perform the subsidised operation constitutes an irregularity, within the meaning of Article 1 of Regulation No 2988/95 on the protection of the European Communities’ financial interests, even if the competent national authority could not have been unaware, when the subsidy was granted, that the recipient had already decided which provider it would entrust with the performance of the subsidised operation.

(see para. 49, operative part 2)

3. In so far as, in its capacity as contracting authority, the recipient of an subsidy granted from the European Regional Development Fund has not complied with the public procurement rules of Directive 92/50 relating to the coordination of procedures for the award of public service contracts, as amended by Directive 93/36, when awarding the contract whose purpose is to perform the subsidised operation:

– the irregularity must be considered to be a continuous irregularity, within the meaning of the second subparagraph of Article 3(1) of Regulation No 2988/95 on the protection of the European Communities’ financial interests, and, consequently, the limitation period of four years laid down by that provision to recover the subsidy wrongly paid to the recipient begins to run from the day on which the performance of the unlawfully awarded public contract is completed;

– the transmission to the recipient of the subsidy of an audit report finding there to have been a failure to comply with the public procurement rules and recommending, as a result, that the national authority demand repayment of the sums paid constitutes a sufficiently specific act relating to investigation or legal proceedings concerning the ‘irregularity’, within the meaning of the third subparagraph of Article 3(1) of Regulation No 2988/95.

(see para. 62, operative part 3)

4. When Member States exercise the right afforded them by Article 3(3) of Regulation No 2988/95 on the protection of the European Communities’ financial interests, the principle of proportionality precludes application of a 30-year limitation period to the recovery of an advantage wrongly obtained from the European Union budget.

In light of the objective of protecting the Union’s financial interests, an objective for which the Union legislature considered that a limitation period of four, or indeed even three, years was already in itself sufficient to enable the national authorities to bring proceedings in respect of an irregularity detrimental to those financial interests and capable of leading to the adoption of a measure such as recovery of a wrongly obtained advantage, it is apparent that to grant those authorities a period of 30 years goes beyond what is necessary for a diligent public service.

(see paras 65-66, operative part 4)

JUDGMENT OF THE COURT (Fourth Chamber)

21 December 2011 (*)

(Reference for a preliminary ruling – Protection of the European Union’s financial interests – Regulation (EC, Euratom) No 2988/95 – Article 3 – Structural Funds – Regulation (EEC) No 2052/88 – Regulation (EEC) No 4253/88 – Contracting authority in receipt of a subsidy from the Structural Funds – Failure to comply with public procurement rules by the recipient of an ERDF subsidy – Basis for the obligation to recover European Union subsidies in the case of an irregularity – Concept of ‘irregularity’ – Concept of ‘continuous irregularity’ – Conditions for recovery – Limitation period – Longer national limitation periods – Principle of proportionality)

In Case C‑465/10,

REFERENCE for a preliminary ruling under Article 267 TFEU from the Conseil d’État (France), made by decision of 5 July 2010, received at the Court on 27 September 2010, in the proceedings

Ministre de l’Intérieur, de l’Outre-mer, des Collectivités territoriales et de l’Immigration

v

Chambre de commerce et d’industrie de l’Indre,

THE COURT (Fourth Chamber),

composed of J.-C. Bonichot, President of the Chamber, K. Schiemann, L. Bay Larsen, C. Toader (Rapporteur) and E. Jarašiūnas, Judges,

Advocate General: E. Sharpston,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the French Government, by G. de Bergues and B. Cabouat, acting as Agents,

– the Polish Government, by M. Szpunar, acting as Agent,

– the European Commission, by A. Steiblytė and J.-P. Keppenne, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 15 September 2011,

gives the following

Judgment

1 This reference for a preliminary ruling essentially concerns the interpretation of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities’ financial interests (OJ 1995 L 312, p. 1) and Council Regulation (EEC) No 4253/88 of 19 December 1988, laying down provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different Structural Funds between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1998 L 374, p. 1), as amended by Council Regulation (EEC) No 2082/93 of 20 July 1993 (OJ 1993 L 193, p. 20) (‘Regulation No 4253/88’).

2 The reference has been made in proceedings between the Ministre de l’Intérieur, de l’Outre-mer, des Collectivités territoriales et de l’Immigration (Ministry for the interior, overseas territories, local authorities and immigration) and the Chambre de commerce et d’industrie de l’Indre (Chamber of Commerce and Industry for the Indre département) (‘the CCI de l’Indre’) concerning, inter alia, the reimbursement by the latter of a subsidy which it received from the European Regional Development Fund (ERDF) (‘the ERDF subsidy’).

Legal context

Legislation governing the Structural Funds

3 Article 7(1) of Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments (OJ 1988 L 185, p. 9), as amended by Council Regulation (EEC) No 2081/93 of 20 July 1993 (OJ 1993 L 193, p. 5) (‘Regulation No 2052/88’) provides:

‘Compatibility and checks

1. Measures financed by the Structural Funds or receiving assistance from the...