Language of document : ECLI:EU:C:1999:332

JUDGMENT OF THE COURT (Sixth Chamber)

29 June 1999 (1)

(Article 92 of the EC Treaty (now, after amendment, Article 87 EC) — Conceptof State aid — Payment facilities granted by a public body responsible forcollecting employers' and workers' social security contributions)

In Case C-256/97,

REFERENCE to the Court under Article 234 EC (ex Article 177) by the Tribunalde Commerce, Brussels, Belgium, for a preliminary ruling in the proceedingspending before that court relating to

Déménagements-Manutention Transport SA (DMT),

on the interpretation of Article 92 of the EC Treaty (now, after amendment,Article 87 EC),

THE COURT (Sixth Chamber),

composed of: P.J.G. Kapteyn, President of the Chamber, G. Hirsch (Rapporteur)and J.L. Murray, Judges,

Advocate General: F.G. Jacobs,


Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

—    Déménagements-Manutention Transport SA (DMT), by Gérald Kaisin, ofthe Brussels Bar,

—    the French Government, by Kareen Rispal-Bellanger, Head of theSubdirectorate for International Economic Law and Community Law in theLegal Affairs Directorate of the Ministry of Foreign Affairs, and GautierMignot, Secretary for Foreign Affairs in that Directorate, acting as Agents,

—    the Commission of the European Communities, by Gérard Rozet, LegalAdviser, and Dimitris Triantafyllou, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Belgian Government, represented by JanDevadder, General Advisor at the Legal Service of the Ministry of Foreign Affairs,External Trade and Cooperation with Developing Countries, acting as Agent, of theSpanish Government, represented by Rosario Silva de Lapuerta, Abogado delEstado, acting as Agent, of the French Government, represented by Sujiro Seam,Secretary for Foreign Affairs in the Legal Affairs Directorate of the Ministry ofForeign Affairs, acting as Agent, and of the Commission, represented by GérardRozet and Dimitris Triantafyllou, at the hearing on 25 June 1998,

after hearing the Opinion of the Advocate General at the sitting on 24 September1998,

gives the following

Judgment

1.
    By decision of 7 July 1997, received at the Court on 15 July 1997, the Tribunal deCommerce (Commercial Court), Brussels, referred to the Court for a preliminaryruling under Article 234 EC (ex Article 177) two questions on the interpretationof Article 92 of the EC Treaty (now, after amendment, Article 87 EC).

2.
    Those questions were raised in proceedings in which the Tribunal de Commercewas examining the question whether it should of its own motion declareDéménagements-Manutention Transport (hereinafter 'DMT‘), established inBrussels, insolvent.

3.
    Under the version of Article 442, paragraph 1, of the Belgian Commercial Codewhich was applicable at the material time, insolvency is pronounced by judgmentof the Tribunal de Commerce upon application by the insolvent trader, or on theapplication of one or several creditors, or of its own motion.

4.
    An investigation into the possible insolvency of an undertaking is initially carriedout by the investigating judge who, once he has sufficient information to suggestthat the undertaking may be insolvent, refers the matter to the Tribunal deCommerce. That is what happened in the main proceedings.

5.
    According to the decision of the national court, DMT's balance sheet as at 31December 1996 shows that, at best, DMT has BEF 12.8 million available in currentassets to meet current liabilities of approximately BEF 21.5 million. The debts owedby DMT in respect of tax, wages and social security contributions amount to a totalof BEF 18.48 million, of which BEF 18.1 million are owed to the Office Nationalde Sécurité Sociale (National Social Security Office, hereinafter 'the ONSS‘), apublic body guaranteed by the Belgian State to which the State has delegatedresponsibility for collecting mandatory employers' and workers' social securitycontributions and ensuring the financial management and efficient financing of thesocial security system (Article 5 of the Law of 27 June 1969, as amended by theLaw of 30 March 1994, hereinafter 'the Law‘).

6.
    The contributions payable by a worker are withheld from each wage packet by theemployer who must, within the time-limits set by the King, forward thosecontributions to the ONSS (Article 23 of the Law). Employers who do not complywith their obligations are liable to criminal sanctions. Furthermore, employers whodo not pay the contributions within the time-limits are liable to pay the ONSS anadditional contribution plus interest at a rate fixed by law (Article 28 of the Law).However, it is accepted that the ONSS may, on its own responsibility, grant periodsof grace to employers and vary such periods.

7.
    The Tribunal de Commerce points out that the ONSS appears to have shown'exceptional patience‘ towards DMT in exercising that power, inter alia, inauthorising it, by letter of 17 December 1996, to pay off its debts at the rate of'[BEF] 600 000 per month from 25 December 1996‘ and 'to pay new contributionsfrom the fourth quarter of 1996 within the periods laid down by law‘; those periodsof grace were confirmed by the ONSS in its letter to DMT of 24 February 1997.

8.
    The Tribunal de Commerce, Brussels, took the view that, by those paymentfacilities, the ONSS contributed to sustaining artificially the business of an insolventundertaking which was unable to obtain funding under normal market conditions. It accordingly decided to stay the proceedings and refer the following questions tothe Court for a preliminary ruling:

'1.    Is Article 92 of the Treaty to be interpreted as meaning that measures inthe form of payment facilities granted by a public body such as the ONSSenabling a commercial company to retain over a period of at least eightyears a proportion of the sums collected from staff and to use those sumsin support of its commercial activities, when that undertaking is unable toobtain funding under normal market conditions or to increase its capital, areto be considered State aid within the meaning of that article?

2.    If the first question is answered in the affirmative, is Article 92 of the Treatyto be interpreted as meaning that such aid is compatible with the commonmarket?‘

Admissibility

9.
    First of all, it has been consistently held that a national court may refer a questionto the Court only if there is a case pending before it and if it is called upon to givejudgment in proceedings intended to lead to a decision of a judicial nature (see,inter alia, Case C-134/97 Victoria Film [1998] ECR I-7023, paragraph 14). As theAdvocate General has pointed out in points 15 to 17 of his Opinion, thoserequirements are met in the main proceedings because the Tribunal de Commerce,in its adjudicating capacity, once seised by the investigating judge, is required todeliver a judgment on the solvency of the undertaking concerned.

10.
    As regards the relevance of the questions referred to the Court, it is settled case-law that it is solely for the national court before which the dispute has beenbrought, and which must assume responsibility for the subsequent judicial decision,to determine in the light of the particular circumstances of the case both the needfor a preliminary ruling in order to enable it to deliver judgment and the relevanceof the questions which it submits to the Court. Consequently, where the questionssubmitted concern the interpretation of Community law, the Court of Justice is, inprinciple, bound to give a ruling (see, in particular, Case C-105/94 Celestini [1997]ECR I-2971, paragraph 21).

11.
    It appears from the order for reference that the national court considers it likelythat, if the payment facilities granted by the ONSS constitute State aid, DMT wouldhave to pay the debts it owes to the ONSS forthwith, as a result of which it wouldbecome insolvent and would have to be pronounced insolvent. It is not for theCourt to evaluate that view in the context of these proceedings.

12.
    However, having regard to the division of competence in the area of State aidbetween national courts, the Commission and this Court, this Court has jurisdictiononly to reply to the first question referred by the Tribunal de Commerce.

13.
    In that connection, it must be borne in mind that Article 92(1) of the EC Treatyprovides that 'any aid granted by a Member State or through State resources in

any form whatsoever which distorts or threatens to distort competition by favouringcertain undertakings or the production of certain goods shall, in so far as it affectstrade between Member States, be incompatible with the common market‘.

14.
    Article 88 EC (ex Article 93) provides for a special procedure by which theCommission is to keep State aid under constant review. As regards proposed newgrants of aid by the Member States, it establishes a procedure which must befollowed before any aid can be regarded as lawfully granted. Under the firstsentence of Article 88(3) EC, as interpreted by the case-law of the Court, theCommission is to be notified of any plans to grant or alter aid before those plansare implemented.

15.
    According to the case-law of the Court, the Commission's powers in that regard donot preclude the national court from referring to the Court of Justice a questionon the interpretation of the concept of aid (see Case C-189/91 Kirsammer-Hack[1993] ECR I-6185, paragraph 14). It is therefore appropriate to give a reply to thefirst question referred by the Tribunal de Commerce.

16.
    However, in providing through Article 88 EC for aid to be kept under constantreview and supervised by the Commission, the intention of the Treaty is that thefinding that an aid may be incompatible with the common market is to be made,subject to review by the Court, by means of an appropriate procedure which it isthe Commission's responsibility to set in motion (see Case C-354/90 FédérationNational du Commerce Extérieur des Produits Alimentaires et Syndicat National desNégociants et Transformateurs de Saumon [1991] ECR I-5505, paragraph 9). Itfollows that the Court has no jurisdiction to reply to the second question referredby the Tribunal de Commerce.

The first question

17.
    In order to reply to the first question, it is necessary to determine whether thevarious components of the definition of State aid in Article 92(1) of the Treaty arepresent.

18.
    It is common ground that in the case in the main proceedings the payment facilitieswhich the ONSS granted DMT were granted through State resources for thepurposes of Article 92(1) of the Treaty, inasmuch as the ONSS is a public bodyestablished by the Belgian State which has been made responsible, under Statesupervision, for collecting mandatory employers' and workers' social securitycontributions and managing the social security system (see, to that effect, JoinedCases C-72/91 and C-73/91 Sloman Neptun [1993] ECR I-887, paragraph 19).

19.
    As regards the concept of aid, it is settled case-law that that concept is wider thanthat of a subsidy because it embraces not only positive benefits, such as subsidies

themselves, but also measures which, in various forms, mitigate the charges whichare normally included in the budget of an undertaking (see Case C-387/92 BancoExterior de España v Ayuntamiento de Valencia [1994] ECR I-877, paragraph 13).Where a public body with responsibility for collecting social security contributionstolerates late payment of such contributions, its conduct undoubtedly gives therecipient undertaking a significant commercial advantage by mitigating, for thatundertaking, the burden associated with normal application of the social securitysystem.

20.
    However, DMT and the Belgian, French and Spanish Governments essentiallyargue that, where payment facilities are granted for a limited period, the advantagegained is offset in economic terms by the increase in the amounts payable in theform of interest and penalties for late payment, and it is therefore not possible toconclude that there is State aid.

21.
    However, it should be noted that any interest or penalties for late payment whichan undertaking experiencing very serious financial difficulties might have to pay inreturn for generous payment facilities, such as those which, according to the orderfor reference, the ONSS granted to DMT over a period of eight years, cannotwholly undo the advantage gained by that undertaking.

22.
    Secondly, it is settled case-law that in order to determine whether a State measureconstitutes aid for the purposes of Article 92 of the Treaty, it is necessary toestablish whether the recipient undertaking receives an economic advantage whichit would not have obtained under normal market conditions (Case C-342/96 Spainv Commission [1999] ECR I-0000, paragraph 41).

23.
    The Commission contends that the payment facilities accorded to DNT amount toa contributions credit and that, in the light of the economic information providedin the order for reference, it seems highly unlikely that, having regard to itssituation, DMT would have been able to finance itself on the market by obtaininga loan from a private investor.

24.
    It should be noted in that connection that the ONSS did not, in granting thepayment facilities in question, act as a public investor whose conduct must, inaccordance with settled case-law (see, in particular, Case C-42/93 Spain vCommission [1994] ECR I-4175, paragraph 14), be compared to the conduct of aprivate investor pursuing a structural policy — whether general or sectoral — guidedby the longer term prospects of profitability of the capital invested. Indeed, as theAdvocate General has pointed out in points 34 to 36 of his Opinion, the ONSSmust be held to have acted, vis-à-vis DMT, as a public creditor which, like a privatecreditor, is seeking to obtain payment of sums owed to it by a debtor in financialdifficulties (see, to that effect, the judgment in Spain v Commission, cited above,paragraph 46).

25.
    It is for the national court to determine whether the payment facilities granted bythe ONSS to DMT are manifestly more generous than those which a privatecreditor would have granted. To that end, the ONSS must be compared with ahypothetical private creditor which, so far as possible, is in the same position vis-à-vis its debtor as the ONSS and is seeking to recover the sums owed to it.

26.
    The French Government argues that payment facilities in relation to social securitycontributions do not constitute State aid if they are granted in identicalcircumstances to any undertaking experiencing financial difficulties. That wouldseem to be the case under the regime established by the Belgian legislation. TheCommission, however, claims that the ONSS has a discretionary power in regardto the grant of payment facilities.

27.
    It follows from the wording of Article 92(1) of the Treaty that general measureswhich do not favour only certain undertakings or the production of only certaingoods do not fall within that provision. By contrast, where the body grantingfinancial assistance enjoys a degree of latitude which enables it to choose thebeneficiaries or the conditions under which the financial assistance is provided, thatassistance cannot be considered to be general in nature (see, to that effect, CaseC-241/94 France v Commission [1996] ECR I-4551, paragraphs 23 and 24).

28.
    It is for the national court in the main proceedings to determine whether theONSS's power to grant payment facilities is discretionary or not and, if it is not, toestablish whether the payment facilities granted by the ONSS are general in natureor whether they favour certain undertakings.

29.
    It should also be pointed out that, if payment facilities such as those in the case inthe main proceedings constitute aid, they may distort or threaten to distortcompetition under Article 92(1) of the Treaty by favouring certain undertakings andaffecting trade between Member States, especially where the recipient undertakingwill, as in DMT's case, be carrying on a cross-border activity.

30.
    Consequently, the answer to the first question must be that payment facilities inrespect of social security contributions granted in a discretionary manner to anundertaking by the body responsible for collecting such contributions constituteState aid for the purposes of Article 92(1) of the Treaty if, having regard to thesize of the economic advantage so conferred, the undertaking would manifestlyhave been unable to obtain comparable facilities from a private creditor in thesame situation vis-à-vis that undertaking as the collecting body.

Costs

31.
    The costs incurred by the Belgian, French and Spanish Governments and theCommission, which have submitted observations to the Court, are not recoverable.

Since these proceedings are, for the parties to the main proceedings, a step in theproceedings pending before the national court, the decision on costs is a matter forthat court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Tribunal de Commerce, Brussels,by decision of 7 July 1997, hereby rules:

Payment facilities in respect of social security contributions granted in adiscretionary manner to an undertaking by the body responsible for collecting suchcontributions constitute State aid for the purposes of Article 92(1) of the ECTreaty (now, after amendment, Article 87(1) EC) if, having regard to the size ofthe economic advantage so conferred, the undertaking would manifestly have beenunable to obtain comparable facilities from a private creditor in the same situationvis-à-vis that undertaking as the collecting body.

Kapteyn
Hirsch
Murray

Delivered in open court in Luxembourg on 29 June 1999.

R. Grass

P.J.G. Kapteyn

Registrar

President of the Sixth Chamber


1: Language of the case: French.