Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
1. State aid - Planned aid - Notification to the Commission - Prior notice under Article 4(6) of Regulation No 659/1999 - Probative value of a fax
(Council Regulation No 659/1999, Art. 4(6))
2. State aid - Planned aid - Notification to the Commission - Guide to procedures in State aid cases - Prior notice under Article 4(6) of Regulation No 659/1999 - Notification to the Directorate-General with responsibility for the matter
(Council Regulation No 659/1999, Art. 4(6))
3. State aid - Examination by the Commission - Prior notice under Article 4(6) of Regulation No 659/1999 - Decision to initiate the formal investigation procedure - Obligation to give notification of the decision within 15 working days following receipt thereof - Methods for calculating the time-limit
(Art. 254(3) EC, Council Regulation No 659/1999, Art. 4(6))
Summary
$$1. The probative value of a fax depends both on the degree of formality that the applicable provisions require for the act in question and the conditions governing the use of the fax transmission process, bearing in mind that, as a rule, the binding legal effects of the act are in no way affected by the fact that it is sent by fax. Thus, where the applicable provisions require a particular degree of procedural formality for certain acts, consideration must be given to whether sending such acts by fax is compatible with those provisions.
As regards prior notice under Article 4(6) of Regulation No 659/1999, the provisions applicable to pre-litigation proceedings for examining the compatibility with the Treaty of State aid do not require any particular procedural formality. Unlike the initial step of notifying new aid, receipt of which must, under Article 2 of the Regulation, be acknowledged by the Commission to the Member State in question, prior notice of implementation is not subject to any requirements beyond those relating to the various stages of the pre-litigation procedure before the Commission.
( see paras 21-23 )
2. The Commission's Guide to procedures in State aid cases requires only that initial notification of aid from Member States be communicated to the General-Secretariat of the Commission. However, the Guide provides at paragraph 24 that replies to requests for further information from the Directorate-General concerned should be sent directly to that Directorate- General. It follows that the same must be true of prior notice under Article 4(6) of Regulation No 659/1999, which is given in the context of the ongoing exchange of information, needs to reach the department responsible for the file as soon as possible.
( see para. 26 )
3. Article 254(3) EC clearly states that decisions...shall be notified to those to whom they are addressed and shall take effect upon such notification. Therefore, a decision whose purpose is to prevent the implementation of planned aid by a Member State cannot take effect before it becomes enforceable against that Member State, which is on the date of its notification to that State. Article 4(6) of Regulation No 659/1999, therefore, which relates to decisions on prior notice by a State taken by the Commission within a period of 15 working days following receipt of the notice, cannot be interpreted as meaning that the mere adoption of such decisions interrupts that period, irrespective of when they are notified.
( see paras 31-33 )
Parties
In Case C-398/00,
Kingdom of Spain, represented by S. Ortiz Vaamonde, acting as Agent, with an address for service in Luxembourg,
applicant,
v
Commission of the European Communities, represented by G. Rozet and R. Vidal, acting as Agents, with an address for service in Luxembourg,
defendant,
APPLICATION for annulment of the Commission's decision of 17 August 2000, notified to the Kingdom of Spain by letter SG (2000) D/106322 of 22 August 2000 and published in the Official Journal of the European Communities of 18 November 2000 (OJ 2000 C 328, p. 19), to initiate the formal investigation procedure for assessing the compatibility with the EC Treaty of aid to Santana Motor SA, in respect of all measures therein referred to, other than the guarantee granted in June 1998,
THE COURT (Sixth Chamber),
composed of: F. Macken, President of the Chamber, J-P Puissochet (Rapporteur), and V. Skouris, Judges,
Advocate General: S. Alber,
Registrar: R. Grass,
having regard to the Report of the Judge-Rapporteur,
after hearing the Opinion of the Advocate General at the sitting on 21 February 2002,
gives the following
Judgment
Grounds
1 By application lodged at the Court Registry on 30 October 2000, the Kingdom of Spain brought an action under Article 230 EC for the annulment of the Commission's decision of 17 August 2000, notified to that Member State by letter SG (2000) D/106322 of 22 August 2000 and published in the Official Journal of the European Communities of 18 November 2000 (OJ 2000 C 328, p. 19), to initiate the formal investigation procedure for assessing the compatibility with the EC Treaty of aid to Santana Motor SA (hereinafter the contested decision), in respect of all measures therein referred to, other than the guarantee granted in June 1998.
Legal background
2 Article 88 EC provides as follows:
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 89 EC provides as follows:
The Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, may make any appropriate regulations for the application of Articles 87 and 88 and may in particular determine the conditions in which Article 88(3) shall apply and the categories of aid exempted from this procedure.
4 Article 4 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88] of the EC Treaty (OJ 1999 L 83, p. 1), which is entitled Preliminary examination of the notification and decisions of the Commission, provides as follows:
1. The Commission shall examine the notification [of the proposed aid] as soon as it is received. Without prejudice to Article 8, the Commission shall take a decision pursuant to paragraphs 2, 3 or 4.
...
4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the common market of a notified measure, it shall decide to initiate proceedings pursuant to Article [88](2) of the Treaty ...
5. The decisions referred to in paragraphs 2, 3 and 4 shall be taken within two months. That period shall begin on the day following the receipt of a complete notification. The notification will be considered as complete if, within two months from its receipt, or from the receipt of any additional information requested, the Commission does not request any further information ...
6. Where the Commission has not taken a decision in accordance with paragraphs 2, 3 or 4 within the period laid down in paragraph 5, the aid shall be deemed to have been authorised by the Commission. The Member State concerned may thereupon implement the measures in question after giving the Commission prior notice thereof, unless the Commission takes a decision pursuant to this Article within a period of 15 working days following receipt of the notice.
5 Articles 17 to 19 of the regulation govern the detailed rules for the review by the Commission of existing aid schemes and provide, inter alia, that where the Member State concerned does not accept the measures proposed by the Commission to render the aid compatible with the common market, the Commission may initiate proceedings pursuant to Article 4(4).
6 Article 25 of the regulation provides as follows:
Decisions taken pursuant to [Regulation No 659/1999] shall be addressed to the Member State concerned. The Commission shall notify them to the Member State concerned without delay ...
7 Article 2(2) of Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time-limits (OJ, English Special Edition 1971 (II) p. 354) which, by virtue, inter alia, of Article 1, applies to acts of the Commission adopted pursuant to the Treaty, provides that for the purposes of this Regulation, "working days" means all days other than public holidays, Sundays and Saturdays. Article 3(1) of that regulation provides that the day during which the event occurs or action takes place that causes time to start running occurs is not to be considered as falling within the period in question.
Facts of the dispute
8 Following several exchanges of correspondence with the Commission concerning the award in June 1998 of a bank guarantee to Santana Motor SA, the Spanish Government informed the Commission in a letter of 1 July 1999 that, pursuant to Article 88(3) EC, it was going to notify the new aid which the Junta de Andalucía intended to award that company.
9 By letters of 30 July and 17 November 1999, both addressed to the Commission's Secretary-General and the Director-General for Competition, the Spanish authorities gave notice of a proposed increase in Santana Motor SA's capital and of various applications for regional aid received from that company in the context of its strategic plan for 1998-2006, and sought the Commission's permission to allow certain of the applications.
10 The Commission was sent supplementary information on those proposals on 4 January 2000. It took the view that notification was still not complete and on 22 March 2000 requested further details, which were dispatched to it on 24 May 2000.
11 By a letter of 28 July 2000, sent the same day by fax, the Spanish Government wrote to the Commission as follows: As two months have now elapsed since the information most recently requested by the Commission was provided (on 24 May 2000), we hereby give you notice that, pursuant to Article 4(3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88] of the EC Treaty, the Junta of Andalucía intends to implement the measures to support Santana previously notified ..., namely the injection of capital and non-recoverable subsidy.
12 On 17 August 2000 the Commission decided to initiate a formal investigation procedure under Article 88(2) EC with regard to the notified aid. The Spanish authorities received notification of that decision on 23 August 2000 by a letter dated 22 August 2000.
The legality of the contested decision
13 The Kingdom of Spain submits that, unlike the bank guarantee awarded in June 1998, none of the aid in question, comprising an increase in capital and the payment of subsidies, has begun to be implemented. When the aid was notified to the Commission in letters dated 30 July and 17 November 1999, it therefore constituted a notified measure within the meaning of Article 4 of Regulation No 659/1999, and was subject to the periods allowed for examination laid down in Article 4(5) and (6). According to the Spanish Government, those periods of two months and 15 working days expired before the contested decision was adopted and the notified measures thus became existing aid. In the circumstances the Commission could not apply to that aid the Article 88(2) EC regime, which only applies to new aid, without erring in law.
14 In order to assess the merits of those arguments it is necessary to consider how the procedural time-limits laid down in Article 4(5) and (6) of Regulation No 659/1999 were applied in this case.
The two-month time-limit
15 It is clear from the documents in the file, and is not contested by the Commission, that the planned aid comprising the increase in capital and the payment of subsidies was validly notified to the Commission pursuant to Article 88(3) EC and was not implemented by the Spanish authorities. At the time of their notification, those measures therefore constituted new aid within the meaning of Article 2 of Regulation No 659/1999, for which the Commission's prior approval was required.
16 The Commission has an initial period of two months in which to investigate such applications for approval; if, at the end of that period, it has not made a decision under Article 4 of Regulation No 659/1999 and does not request any further information from the Member State concerned, the notification is, under Article 4(5) of the regulation, considered ... complete. When that period expires, and subject to the same reservations, the Member State may implement its plans.
17 It is apparent from the account of the facts that the Spanish Government sent the Commission supplementary information on the same measures on 24 May 2000, and that the Commission did not ask for any further details after that time. Its silence during the two-month period following receipt of that information meant that notification of the aid had to be considered complete as from 25 July 2000, and that it was then open to the Spanish authorities to implement their plans, subject to giving the Commission prior notice.
18 The Commission does not challenge that finding but claims that the contested decision was taken during the period of 15 working days laid down by Article 4(6) of Regulation No 659/1999, thus precluding immediate implementation of the notified measures.
The 15-working-days time-limit
19 The Spanish Government submits that the period of the time-limit started running on 31 July 2000, being the first working day following the receipt, on 28 July 2000, by the Commission of a fax notifying it pursuant to Article 4(6) of Regulation No 659/1999 that the Spanish authorities were going to implement the notified measures.
20 The Commission, on the other hand, contends that the period only began to run on 1 August 2000. It claims that the letter of 28 July 2000 can only be deemed to have properly reached it on 31 July 2000. The fact that it was sent by fax on 28 July 2000 cannot be taken into account, first of all because it was not addressed to the Commission's General-Secretariat, as the Community State aid regime requires in the car sector, but to the Commission's Competition Directorate-General. Secondly, and in any event, a fax accompanied simply by a transmission report indicating the number of pages received and the recipient's number cannot serve to establish the contents of the document received. That is why the Court of Justice has held that applications may not be filed by fax. Similar reasons of legal certainty preclude basing the calculation of time-limits on fax transmissions. In addition, receipt of the fax of 28 July 2000 could not be acknowledged because it was sent at 17.49 on a Friday, which is after the official working hours of the Commission's staff.
21 In that regard it must be emphasised that the probative value of a fax depends both on the degree of formality that the applicable provisions require for the act in question and the conditions governing the use of the fax transmission process, bearing in mind that, as a rule, the binding legal effects of the act are in no way affected by the fact that it is sent by fax (see, to that effect, Case C-170/89 BEUC v Commission [1991] ECR I-5709, paragraphs 9 to 11).
22 Where the applicable provisions require a particular degree of procedural formality for certain acts, consideration must be given to whether sending such acts by fax is compatible with those provisions.
23 As regards prior notice under Article 4(6) of Regulation No 659/1999, the provisions applicable to pre-litigation proceedings for examining the compatibility with the Treaty of State aid do not require any particular procedural formality. Unlike the initial step of notifying new aid, receipt of which must, under Article 2 of the Regulation, be acknowledged by the Commission to the Member State in question, prior notice of implementation is not subject to any requirements beyond those relating to the various stages of the pre-litigation procedure before the Commission. In a footnote to Annex I to its Guide to procedures in State Aid Cases, the Commission has expressly accepted that time-limits for the various kinds of action are started by the receipt of correspondence ... or dispatch if the correspondence is faxed. Indeed the Court has held in an action for failure to act that a faxed request to the Commission to act was inadmissible not because it was sent by fax, but because the content of the document was inadequate (order of 18 November 1999 in Case C-249/99 P Pescados Congelados Jogamar v Commission [1999] ECR I-8333). Consequently the Commission cannot validly argue that the letter of 28 July 2000 cannot be taken into account on the sole ground that it was received by fax.
24 It is therefore necessary to determine whether the conditions under which that method of transmission was used in this case could have affected the Commission's knowledge of the content of the document or the date on which it was received.
25 The documents in the file do not suggest that that was the case. The Commission does not contend that the Kingdom of Spain's prior notice reached it on a later date by post. It merely states that, in the absence of its staff, receipt of the fax could not be recorded at 17.49 on Friday 28 July 2000, and it was not in fact possible to record it until Monday 31 July 2000. It is therefore common ground, first, that the document registered on 31 July 2000 was indeed the same as that received on 28 July 2000 and, second, that the Commission did receive the Spanish authorities' notice on 28 July 2000. The fact that the Commission's officials were unavailable when the fax was received cannot in the circumstances of this case cause the date of receipt or the content of the document transmitted to be called into question.
26 The argument that the Spanish Government's notice should have been sent to the Commission's General-Secretariat cannot affect the point at which the period of 15 working days starts to run. The Guide to procedures in State Aid Cases requires only that initial notification of aid from Member States be communicated to the General-Secretariat of the Commission, for internal coordination purposes. Where the Directorate-General of the Commission with responsibility for the matter has clearly been appointed by the General-Secretariat, the Guide provides at paragraph 24 that replies to requests for further information from the Directorate-General concerned should be sent directly to that Directorate- General. The same must be true of prior notice under Article 4(6) of Regulation No 659/1999, which is given in the context of the ongoing exchange of information, and, again in the interests of swift administrative processing, needs to reach the department responsible for the file as soon as possible.
27 It follows from all of the foregoing that it was on 28 July 2000, when the Commission received prior notice from the Spanish authorities, that the 15-working-days period was set in motion. Thus, under Articles 2 and 3 of Regulation No 1182/71 and Article 4(6) of Regulation No 659/1999, time started to run on 31 July 2000, the first working day following such receipt. The period therefore ended on 21 August 2000.
28 As regards, secondly, the matter of interruption of the 15-working-days period, which depends on the circumstances in which the contested decision was adopted, the Kingdom of Spain argues that the decision which the Commission claims was taken on 17 August 2000 was not notified to the Spanish authorities until 23 August, that is, after the end of that period. The material date can only be that on which the Commission's decision takes effect as against the Member State concerned, that is to say the date on which it is notified to that Member State, pursuant to Article 254(3) EC.
29 The Commission, on the other hand, submits that the relevant date is that when the decision to initiate the formal investigation procedure is taken, not when the decision is notified to the Member State concerned. Article 4(6) of Regulation No 659/1999 governs the decision which the Commission takes ... within a period of 15 working days following receipt of the notice. In this case the Commission submits that the contested decision was adopted on 17 August 2000 in accordance with the written procedure laid down in Article 12 of the Commission's rules of procedure and that it was served without delay as required by Article 25 of Regulation No 659/1999. The contested decision therefore interrupted the period on 17 August 2000, and the Commission could then, without committing an error of law, initiate the formal investigation procedure into the notified aid.
30 It must be observed in that connection that the members of the Commission were effectively called upon to give a decision on 17 August 2000, under the accelerated written procedure, in receipt of the Directorate-General for Competition's proposal that the formal investigation procedure into the aid in question be initiated. Since no reservations were expressed in respect of that proposal, it was adopted on that date in accordance with Article 12 of the Commission's rules of procedure. The act was formally authenticated by signature of the Secretary-General the same day, and therefore became a decision of the Commission within the meaning of Article 249 EC. Consequently the letter addressed to the Kingdom of Spain of 22 August 2000, which set out the entire content of the proposal thus adopted and became the contested decision, must therefore be deemed to have notified the addressee of the decision of 17 August 2000 even though it makes no mention of a decision of that date.
31 However, contrary to the Commission's contentions, the adoption of the contested decision on that day could not have the effect of interrupting the 15-working-days time-limit. Article 254(3) EC clearly states that decisions...shall be notified to those to whom they are addressed and shall take effect upon such notification.
32 In this case, a decision whose purpose is to prevent the implementation of planned aid by a Member State cannot take effect, and thus interrupt the 15-working-days time-limit, before it becomes enforceable against that Member State, which is on the date of its notification.
33 Article 4(6) of Regulation No 659/1999, which relates to decisions taken by the Commission within a period of 15 working days following receipt of the notice, cannot therefore be interpreted as meaning that the mere adoption of such decisions interrupts that period, irrespective of when they are notified. That is borne out by Article 25 of the Regulation, which provides that decisions taken by the Commission under the Regulation are to be taken without delay, and by the reference, in recital 21 in the preamble to the Regulation, to the principle that decisions in State aid cases are addressed to the Member State concerned in the interests of transparency and legal certainty. That is the reason why failure to notify alone can in certain circumstances justify the annulment of an act of a Community institution (see, to that effect, Case C-227/92 P Hoechst v Commission [1999] ECR I-4443, paragraph 68).
34 It follows from the foregoing that the contested decision taken on 17 August 2000 but not notified to the Spanish authorities until 23 August 2000 was adopted after the period of 15 working days referred to in Article 4(6) of Regulation No 659/1999. As from 21 August 2000, the date on which that period expired, the notified aid therefore became existing aid. The Commission was accordingly not entitled to found the contested decision on Article 88(3) EC, which applies only to new aid, and thus prevent implementation of the planned aid to Santana Motor SA (see, to that effect, Case C-99/98 Austria v Commission [2001] ECR I-1101, paragraphs 68 to 78 and, for facts that arose after the entry into force of Regulation No 659/99, Case C-400/99 Italy v Commission [2001] ECR I-7303, paragraph 48).
35 The contested decision is accordingly vitiated by an error of law and must on that ground alone be annulled.
36 In those circumstances there is no need to consider the Kingdom of Spain's alternative plea of faulty reasoning.
Decision on costs
Costs
37 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the Kingdom of Spain has applied for costs, and the Commission has been unsuccessful, the latter must be ordered to pay the costs.
Operative part
On those grounds,
THE COURT (Sixth Chamber)
hereby:
1. Annuls the Commission's decision of 17 August 2000, notified to the Kingdom of Spain by letter SG (2000) D/106322 of 22 August 2000, to initiate the formal investigation procedure for assessing the compatibility with the EC Treaty of aid to Santana Motor SA, in respect of all measures therein referred to, other than the guarantee granted in June 1998;
2. Orders the Commission of the European Communities to pay the costs.
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