Associação Comercial de Aveiro v Commission of the European Communities.

• Jurisdiction: European Union
• Court: General Court (European Union)
• ECLI: ECLI:EU:T:2002:117
• Date: 14 May 2002
• Docket Number: T-80/00
• Procedure Type: Recours en annulation - fondé

Avis juridique important

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62000A0080

Judgment of the Court of First Instance (Fifth Chamber) of 14 May 2002. - Associação Comercial de Aveiro v Commission of the European Communities. - Social policy - European Social Fund - Application for annulment - Reduction of financial assistance - Statement of reasons - Principle of proportionality - Assessment of facts. - Case T-80/00.

European Court reports 2002 Page II-02465

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

1. Acts of the institutions - Statement of reasons - Obligation - Scope - Commission decision reducing, on a proposal from a Member State, assistance from the European Social Fund for vocational training

(Art. 253 EC)

2. Social policy - European Social Fund - Financial assistance for vocational training - Commission decision based on Article 6(1) of Regulation No 2950/83 - Evaluation of complex facts and accounts - Judicial review - Limits

(Council Regulation No 2950/83, Art. 6(1))

Summary

$$1. The purpose of the obligation to state the reasons for an individual decision, laid down in Article 253 EC, is to provide the person concerned with sufficient information to make it possible to determine whether the decision is well founded or whether it is vitiated by an error which may permit its validity to be contested, and to enable the Community judicature to review the lawfulness of the decision. The extent of that obligation depends on the nature of the measure at issue and the context in which it was adopted.

Given, in particular, that a decision reducing the amount of European Social Fund assistance initially granted has serious consequences for the recipient of that assistance, such a decision must either itself show clearly the grounds which justify the reduction in the assistance initially granted or, if such grounds are not stated because the Commission has simply confirmed the proposal of a Member State to reduce that assistance, refer clearly to a measure of the competent authorities in the Member State concerned in which the latter clearly set out the reasons for such a reduction.

( see paras 35-38 )

2. The application of Article 6(1) of Regulation No 2950/83 on the implementation of Decision 83/516 concerning the tasks of the European Social Fund - under which, where assistance from the European Social Fund has not been used in conformity with the conditions laid down by the approval decision, the Commission may suspend, withdraw or reduce the assistance - may require the Commission to undertake an evaluation of complex facts and accounts. When undertaking such an evaluation, the Commission must therefore enjoy a considerable measure of latitude. Consequently, the Community judicature must, in examining whether that power was exercised lawfully, confine itself to examining whether the Commission committed a manifest error in assessing the information in question.

( see para. 51 )

Parties

In Case T-80/00,

Associação Comercial de Aveiro, established in Aveiro (Portugal), represented by J. Amaral e Almeida and B. Diniz de Ayala, lawyers, with an address for service in Luxembourg,

applicant,

v

Commission of the European Communities, represented by H. Speyart and M. França, acting as Agents, with an address for service in Luxembourg,

defendant,

APPLICATION for annulment of Commission Decision C(99) 3684 of 30 November 1999 reducing the European Social Fund assistance granted in the framework of project No 890365/P 1 to Associação Comercial de Aveiro,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of: J.D. Cooke, President, R. García-Valdecasas and P. Lindh, Judges,

Registrar: J. Plingers, Administrator,

having regard to the written procedure and further to the hearing on 11 December 2001,

gives the following

Judgment

Grounds

Legal background

1 Article 1(2)(a) of Council Decision 83/516/EEC of 17 October 1983 on the tasks of the European Social Fund (OJ 1983 L 289, p. 38) provides that the European Social Fund (ESF) is to participate in the financing of operations concerning vocational training.

2 Article 1 of Council Regulation (EEC) No 2950/83 of 17 October 1983 on the implementation of Decision 83/516 (OJ 1983 L 289, p. 1) lists the types of expenditure for which assistance may be granted from the ESF, in particular that relating to vocational training.

3 Article 5(1) of Regulation No 2950/83 states that the approval of an application for financing from the ESF is to be followed by the payment of an advance of 50% of the assistance approved on the date on which the training operation is scheduled to begin. Under Article 5(4), final payment claims are to contain a detailed report on the content, results and financial aspects of the relevant operation. The Member State is to certify the accuracy of the facts and accounts in payment claims.

4 Under Article 6(1) of Regulation No 2950/83, when ESF assistance is not used in conformity with the conditions set out in the decision of approval, the Commission may suspend, reduce or withdraw the aid after having given the relevant Member State an opportunity to comment. Article 6(2) states that sums paid which are not used in accordance with the conditions laid down in the decision of approval are to be refunded and that to the extent that a Member State repays to the Community sums owed by the bodies financially responsible for an operation, the Community's rights in the matter are to be transferred to the Member State.

5 Under Article 7(1) of Regulation No 2950/83, both the Commission and the Member State concerned may check the use of the assistance.

6 Article 7 of Commission Decision 83/673/EEC of 22 December 1983 on the management of the European Social Fund (OJ 1983 L 377, p. 1) states that the Member State which is investigating the use of assistance because of suspected irregularities must notify the Commission without delay.

Facts

7 In 1988 the Departamento para os Assuntos do Fundo Social Europeu (Department of ESF Affairs, part of the Portuguese Ministry of Employment and Vocational Training, the DAFSE) sent to the Commission an application for approval of financial assistance to enable the Associação Comercial de Aveiro (the ACA) to carry out a series of vocational training operations for which the total financing was (PTE) 204 082 248 Portuguese escudos, the ESF contribution being PTE 112 245 236 and the contribution from the Portuguese public authorities being PTE 91 837 012.

8 By Decision C(89) 0570 of 22 March 1989, the Commission approved the grant of financial assistance to the ACA for its project No 890365/P 1 involving total financing of PTE 157 397 822, of which PTE 86 568 802 were paid by the ESF and PTE 70 829 020 from the Orçamento da Segurança Social (the social security budget, the OSS). Those operations were to be carried out between 8 February and 31 December 1989 and were intended for the vocational training of 249 young persons.

9 On 9 May 1989, the ACA, as the recipient of the ESF assistance, signed an acceptance of the Commission decision, by which it undertook that the assistance granted will be used in accordance with the relevant rules of national and Community law.

10 In accordance with Article 5(1) of Regulation No 2950/83, the ACA received an advance of PTE 78 698 910, corresponding to approximately 50% of the amount approved, which was made up of PTE 43 284 401 in the form of ESF assistance and PTE 35 414 509 in the form of OSS contribution.

11 On completion of the training operations, on 26 April 1990 the applicant submitted to the DAFSE a final payment claim for PTE 26 766 799, corresponding to ESF assistance of PTE 70 051 200 and total financing of PTE 127 365 818, the total cost of the training operations proving to be lower than the amount initially forecast. On 30 October 1990, the DAFSE submitted that claim to the Commission and informed it that the certification of the information which it contained was subject to further analysis.

12 By letter of 13 February 1991, the DAFSE informed the applicant that, although the final payment claim had already been sent to the Commission, its payment was subject to financial audit.

13 On several occasions, in March and October 1991 and in February 1992, the applicant requested the DAFSE to carry out that audit as soon as possible and stated that the delay in final payment was causing it serious financial damage.

14 On 25 March 1993, the Inspecçao Geral de Finanças (General Tax Inspectorate, the IGF) was requested to carry out a financial audit of the expenditure incurred in connection with the vocational training operations carried out in 1989 by the ACA, in accordance with Article 7(1) of Regulation No 2950/83. The IGF delivered its conclusions on the audit requested in a report of 28 September 1995 (the 1995 IGF report).

15 The 1995 IGF report proposed treating as ineligible certain expenditure charged by the applicant in the final payment claim and also referred to the DAFSE for assessment the eligibility or reasonableness of other expenditure charged in it.

16 Subsequently, the DAFSE analysed the reasonableness of the expenditure charged and the corrections proposed by the IGF. It delivered its conclusions in a report issued on 1 July 1997 under No 1618 (the DAFSE report), in which it proposed reducing by PTE 8 495 366 the amount to be cofinanced, on account of the ineligibility of certain expenditure. The DAFSE suggested the following amendments to the financing:

ESF assistance PTE 65 378 749

Contribution from the Portuguese public authorities (OSS) PTE 53 491 703

Total cost of the operation PTE 118 870 452

17 By letter No 6222 of 2 September 1997, the DAFSE proposed to the Commission that the total cost of the operation be reduced to PTE 118 870 452 (instead of PTE 127 365 818), with ESF assistance reduced to PTE 65 378 749 (instead of PTE 70 051 200), and requested payment of the balance of PTE 22 094...