Case T‑47/19
Dansk Erhverv
v
European Commission
Judgment of the General Court (Fourth Chamber, Extended Composition), 9 June 2021
(State aid – Sale of canned beverages in border shops in Germany to foreign residents – Exemption from the deposit on condition that the beverages purchased are consumed outside Germany – Complaint – Decision by the Commission not to raise objections – Action for annulment – Locus standi – Admissibility – Conditions for initiating a formal investigation procedure – Error of law – Serious difficulties – Concept of ‘State aid’ – State resources – Non-imposition of a fine)
1. State aid – Examination by the Commission – Preliminary review and main review – Classification of a measure as State aid – Commission’s duty to initiate the main review procedure in the event of serious difficulties – Circumstances enabling the existence of such difficulties to be determined – Indicia found in the content of the contested decision
(Arts 107(1) and 108(3) TFEU)
(see paragraphs 48, 164, 173, 174, 176, 177, 179-181, 185-190, 192-195, 197-203)
2. State aid – Concept – Assessment solely in the context of Article 107(1) TFEU – No obligation to take into consideration obligations on the Member State arising from provisions of EU law other than those relating to State aid – Integration of environmental protection requirements intended to be implemented at the stage of the examination of the compatibility of aid and not that of the examination of its existence
(Arts 11 and 107(1) TFEU; European Parliament and Council Directive 94/62)
(see paragraphs 58-68)
3. State aid – Concept – Assessment solely in the context of Article 107(1) TFEU – No obligation to take into consideration the obligations of a Member State under national law
(Art. 107(1) TFEU)
(see paragraphs 58-62, 69-73)
4. State aid – Concept – Aid from State resources – Deposit scheme for certain packaging including value added tax – Non-collection of value added tax– Indirect consequence of the mechanism for waiving the deposit, inherent in the non-charging of the deposit – Precluded
(Art. 107(1) TFEU)
(see paragraphs 89-104)
5. State aid – Concept – Aid from State resources – Deposit scheme for certain packaging subject to a fine in the event of non-collection – Waiving of the deposit resulting not from prior and transparent authorisation laid down by legislation but from a simple interpretation of the legislation in force by the authorities responsible for implementing the scheme – Non-imposition of fines for non-charging of deposits – Test for determining that there are no State resources – Difficulties in interpreting the applicable legislation in the exercise of police powers – Applicability – Conditions – Temporary nature of difficulties in interpreting the legislation – Requirement of a process of gradual clarification of provisions
(Art. 107(1) TFEU; Charter of Fundamental Rights of the European Union, Art. 49(1))
(see paragraphs 130-137, 140-157)
Résumé
The General Court annuls the Commission decision finding that the non-charging of a deposit on certain drinks packaging sold by German border shops to customers resident in Denmark does not constitute State aid
The Commission was not in a position to overcome, at the preliminary stage, all the serious difficulties encountered in determining whether the non-charging of the deposit constituted State aid
The German Federal legislation ‘VerpackV’ (1) transposes Directive 94/62 on packaging and packaging waste. (2) In respect of certain non-reusable drinks packaging, that legislation establishes a deposit scheme, including value added tax which must be charged at each distribution level until transfer to the end-consumer and refunded on return of the packaging. Failure to collect the deposit constitutes an administrative offence punishable by a fine of up to EUR 100 000.
Under the division of competences laid down in the Basic Law for the Federal Republic of Germany, the implementation of that legislation is the responsibility of the regional authorities which are in a position to enforce it through administrative orders or the imposition of fines. In that context, the Schleswig-Holstein and Mecklenburg-Vorpommern authorities took the view that the obligation to charge the deposit did not apply to border shops if the beverages were sold only to customers resident in particular in Denmark and if those customers undertook in writing (by signing an export declaration) to consume those beverages and to dispose of their packaging outside Germany.
Taking the view that the exemption from charging the deposit on non-reusable drinks packaging amounted to granting unlawful aid incompatible with the internal market to a group of retail undertakings in the north of Germany, Dansk Erhverv (‘the applicant’), a trade association representing the interests of Danish undertakings, submitted a State aid complaint to the European Commission. At the end of the preliminary examination stage, the Commission adopted a decision finding that the measures at issue, namely the non-charging of the deposit, the non-collection of value added tax relating to the deposit and the non-imposition of a fine on the undertakings which do not charge the deposit, do not constitute State aid within the meaning of Article 107(1) TFEU (‘the contested decision’). (3)
On 23 January 2019, the applicant brought an action for annulment of that decision. In its examination of that action, the General Court provides important clarifications, first, as regards the relationship between the provisions on State aid and other provisions of EU or national law and, secondly, on the appropriate conclusions to be drawn, concerning fines, from the existence of difficulties in interpreting the applicable legislation in determining whether a State resource exists.
Findings of the General Court
In the first place, the General Court clarifies to what extent infringement of provisions which do not relate to the law on State aid may usefully be relied on in order to establish that a relevant decision adopted by the Commission is unlawful. In that regard, according to the General Court, a distinction must be made depending on whether the Commission’s decision concerns the compatibility of aid with the internal market or whether it concerns the existence of aid. In the first situation, where aid which, by some of its conditions, contravenes other provisions of the FEU Treaty cannot be declared compatible with the internal market, failure by a national measure, classified as State aid, to have regard to provisions of the FEU Treaty other than those relating to State aid may properly be relied on to challenge the legality of a decision by which the Commission considers that such aid is compatible with the internal market.
On the other hand, according to the General Court, the same is not true of decisions on the existence of State aid. In that regard, it notes that it is true that Article 11 TFEU provides that environmental protection requirements must be integrated into the definition and implementation of EU policies and activities. However, such integration is intended to be carried out at the stage of the examination of the compatibility of aid and not that of the examination of its existence. Since the taking into account of a ground of general interest is ineffective at the stage of classification as State aid, the General Court holds that the fact that a national measure infringes provisions of EU law other than those relating to State aid cannot properly be relied on, in itself, for the purpose of establishing that that measure is State aid. It is contrary to the wording of Article 107(1) TFEU to consider that a national measure, because it infringes other provisions of the Treaties, constitutes aid even though it does not fulfil the conditions expressly laid down by that provision for the purpose of identifying aid.
According to the General Court, the same applies, a fortiori, to legislation of a Member State. The need for uniform application of EU law and the principle of equality require that the terms of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union; that interpretation must take into account the context of the provision and the purpose of the legislation in question. The General Court finds that no express reference is made to the law of the Member States in Article 107(1) TFEU. Furthermore, it is not for the Commission, but for the competent national courts, to review the legality of national measures in the light of national law. In that regard, if it were accepted that infringement of a Member State’s legislation must lead the Commission to classify national measures as State aid, it might be required to decide on the lawfulness of those measures in the light of national law, in disregard of the jurisdiction of the national courts.
Thus, the General Court rejects the applicant’s claim that the Commission should have taken into consideration, in examining whether the measure, consisting of exemption from charging of the deposit, was State aid, the obligations of the Federal Republic of Germany under Directive 94/62, the ‘polluter pays principle’ and German law.
In the second place, in examining the complaint that, in order to determine whether the non-imposition of a fine constituted an advantage financed through State resources, the Commission wrongly applied an unprecedented legal test alleging the existence of difficulties in interpreting the legislation at issue, the General Court notes that, in the present case, the non-imposition of a fine is inseparable from the non-charging of the deposit and, therefore, from the interpretation of the legislation in force accepted in practice by the competent German regional authorities. Such a context does not correspond to any of the situations hitherto considered in the case-law on fines.
In those circumstances, according to the General Court, the Commission was right to rely on a new legal test, based on the link between the interpretation of the relevant legislation and the exercise of the power to impose penalties by the authorities with that power, in order to examine whether the non-imposition a fine could be regarded as an advantage financed through State resources. The Commission was also fully entitled to take the view that the difficulties in interpreting legislation were, in principle, capable of precluding the non-imposition of a fine from being regarded as an exemption from a fine constituting State aid. The situation in which there are difficulties in interpreting a provision, non-compliance with which may be penalised by the imposition of a fine, is clearly different, from the point of view of the advantage in question, from that in which the competent authority decides to exempt an undertaking from payment of a fine which it would have to bear under the legislation. In the first situation, unlike the position in the second, there is no pre-existing charge. In view of the uncertain scope of the provision, the existence of unlawful conduct is not obvious and the penalising of such conduct by a fine does not therefore appear, where there is such uncertainty, to be necessary or inevitable.
The General Court states, however, that the test relating to the existence of difficulties in interpreting the applicable legislation can apply only on condition that those difficulties are temporary and that they form part of a process of gradual clarification of legislative provisions. The Commission did not refer to the temporary and inherent nature of the gradual clarification of the difficulties of interpretation of the legislative provisions, although those two conditions must be satisfied in order for it to be possible to reach a finding that there are no State resources. As regards the temporary nature of any difficulties in interpreting the legislation, the General Court notes that the Commission does not refer to any particular circumstance capable of justifying the continuation of such uncertainty from 2005, or even 2003. Furthermore, as regards the inherent nature of the gradual clarification of the difficulties in interpreting the legislation, it is noted that there is nothing in the documents before the General Court to suggest that such difficulties were in the process of being resolved.
Consequently, the General Court held that the Commission erred in law in concluding that the condition relating to State resources was not satisfied without examining whether the difficulties of interpretation on which it relied were temporary and inherent in the gradual clarification of the legislative provisions. That finding constitutes evidence from which it may be concluded that the Commission was not in a position to overcome, at that preliminary stage, all the serious difficulties encountered in determining whether the non-charging of the deposit and the non-imposition of a fine constituted State aid. Since other evidence of serious difficulties which the Commission could not overcome at the preliminary examination stage were identified, the General Court annuls the contested decision in its entirety.