(State aid – Existing aid scheme – Tax scheme for coordination centres established in Belgium – Competence of the Council)

Summary of the Judgment

State aid – Power of the Council to authorise aid by way of derogation in view of exceptional circumstances – Conditions of exercise

(Arts 87 EC and 88(2) EC)

The power held by the Council, laid down in the third subparagraph of Article 88(2) EC, is clearly exceptional in character. It follows that, if the Member State concerned has made no application to the Council under that provision before the Commission declares the aid incompatible with the common market, the Council is no longer authorised to exercise the exceptional power conferred upon it by that provision in order to declare such aid compatible with the common market. Such an interpretation, which makes it possible to avoid the same State aid being the subject of conflicting decisions taken successively by the Commission and the Council, contributes to legal certainty.

Furthermore, to hold that a Member State is able to grant to beneficiaries of such unlawful aid new aid in an amount equivalent to that of the unlawful aid, intended to neutralise the impact of the repayments which the beneficiaries are obliged to make pursuant to the decision finding the aid incompatible with the common market would clearly undermine the effectiveness of decisions taken by the Commission under Articles 87 EC and 88 EC. Therefore, the Council can neither counter such a Commission decision by itself declaring that aid compatible with the market, nor undermine the effectiveness of that decision by declaring compatible with the common market, in accordance with the third subparagraph of Article 88(2) EC, an aid designed to compensate the beneficiaries of the unlawful aid declared incompatible with the common market for the repayments they are required to make pursuant to that decision.

It follows that the Council was not able validly to adopt a decision finding aid which the Belgian State proposed to grant to certain coordination centres established in Belgium compatible with the common market, contrary to a Commission decision adopted prior to the application to the Council which concerned an identical aid scheme and declared it to be incompatible with the common market.

(see paras 24-30, 36-37)

22 June 2006 (*)

(State aid – Existing aid scheme – Tax scheme for coordination centres established in Belgium – Competence of the Council)

In Case C-399/03,

ACTION for annulment under Article 230 EC, brought on 24 September 2003,

Commission of the European Communities, represented by G. Rozet, V. Di Bucci and R. Lyal, acting as Agents, with an address for service in Luxembourg,

applicant,

Council of the European Union, represented by A.-M. Colaert and F. Florindo Gijón, acting as Agents,

defendant,

THE COURT (Second Chamber),

composed of C.W.A. Timmermans, President of the Chamber, J. Makarczyk, R. Schintgen, P. Kūris (Rapporteur) and J. Klučka, Judges,

Advocate General: P. Léger,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 14 September 2005,

after hearing the Opinion of the Advocate General at the sitting on 9 February 2006,

gives the following

This request for a preliminary ruling concerns the interpretation of Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ 2012 L 26, p. 1), as amended by Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 (OJ 2014 L 124, p. 1) (‘Directive 2011/92’).

The request has been made in proceedings between, on the one hand, Waltham Abbey Residents Association and, on the other hand, An Bord Pleanála (Planning Board, Ireland; ‘the Board’), Ireland and the Attorney General (Ireland), concerning authorisation granted by the Board for a strategic residential housing development.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

ECLI:EU:C:2025:140

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

4. The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

To that end, it claims that the authorised aid, granted by new legal provisions, is allocated to a restricted number of undertakings, all identifiable, that is to say about 30 coordination centres, authorisation for which was to expire between 17 February 2003 and 31 December 2005. In addition, that decision would have produced effects for a limited period, as it would not have extended beyond 31 December 2005. According to the Council, that aid is less profitable for the undertakings than the previous scheme.

21In any event, it is of the view that the contested decision authorised the Kingdom of Belgium not to continue the scheme declared incompatible by the Commission, but to adopt a new legal measure.

22As regards the period which elapsed between the submission by the Kingdom of Belgium of an application under Article 88(2) EC and the adoption of the contested decision, the Council has argued that the letter of that Kingdom’s Permanent Representative of 20 March 2003 is only a preparatory document, intended to facilitate translation, in order that discussions on the proposed measures might take place. The application of the Kingdom of Belgium was accordingly not submitted to it until 26 May 2003.

Findings of the Court

23In Commission v Council, the Court defined the circumstances in which the Council can take a decision authorising State aid where the Commission has adopted a decision stating such aid to be incompatible with the common market.

24Firstly, the Court interpreted in paragraph 31 of that judgment the scope of the third subparagraph of Article 88(2) EC, holding that the power held by the Council was clearly exceptional in character. It inferred from that that if the Member State concerned has made no application to the Council under that provision before the Commission declares the aid incompatible with the common market, the Council is no longer authorised to exercise the exceptional power conferred upon it by that provision in order to declare such aid compatible with the common market (Commission v Council, paragraph 33).

25The Court holds that such an interpretation, which makes it possible to avoid the same State aid being the subject of conflicting decisions taken successively by the Commission and the Council, contributes to legal certainty (Commission v Council, paragraph 35).

26Secondly, the Court examined whether the fact that the Council lacks that power implies that it also lacks the power to decide on an aid measure whose aim is to allocate to beneficiaries of the illegal aid previously declared incompatible by a Commission decision a sum designed to compensate for the repayments which they are obliged to make pursuant to that decision.

27It pointed out that, according to settled case-law, to hold that a Member State is able to grant to beneficiaries of such unlawful aid new aid in an amount equivalent to that of the unlawful aid, intended to neutralise the impact of the repayments which the beneficiaries are obliged to make pursuant to that decision, would clearly undermine the effectiveness of decisions taken by the Commission under Articles 87 EC and 88 EC (Commission v Council, paragraph 43).

28The Court thus ruled that the Council can neither counter a Commission decision finding an aid incompatible with the common market by itself declaring that aid compatible with the market, nor undermine the effectiveness of such a decision by declaring compatible with the common market, in accordance with the third subparagraph of Article 88(2) EC, an aid designed to compensate the beneficiaries of the unlawful aid declared incompatible with the common market for the repayments they are required to make pursuant to that decision (Commission v Council, paragraphs 44 and 45).

29In the light of that case-law, it is necessary to conclude that the Council could not validly adopt the contested decision.

30In the first place, it is common ground that the Kingdom of Belgium applied to the Council after the adoption of Decision 2003/757 declaring incompatible with the common market the aid allocated by the Belgian State to the coordination centres.

31Secondly, it is necessary to examine whether the aid described in Article 1 of the contested decision is the same as that covered by Decision 2003/757.

32In this respect, it is apparent from the documents in the file, and in particular from the note addressed by the Kingdom of Belgium to the Council on 6 March 2003, that the aid scheme which the Council was to declare compatible with the common market was that covered by Decision 2003/757.

33Furthermore, the note dated 26 May 2003, in which the Permanent Representative of the Kingdom of Belgium to the European Union describes the content of the aid, leaves no doubt as to the fact that the measures concerned are the same.

34Lastly, the contested decision authorises measures which involve the application of the same methods for determining taxable profits and liability to tax on the basis of the number of employees as those laid down under the tax scheme applicable to the coordination centres. It also comprises the same exemptions from withholding and property taxes and from capital duty.

35Thirdly, it is necessary to ascertain what the effects are of the contested decision. It is enough to state that the very terms of the statement of reasons on which that decision is based indicate that its object was to overcome the effects of Decision 2003/757 as regards the coordination centres having an authorisation which expired between 17 February 2003 and 31 December 2005.

36Therefore, the contested decision was contrary to Decision 2003/757. The fact that it applies to only a restricted number of undertakings and is of limited duration has no bearing on the finding that it is inconsistent with Decision 2003/757 which, in Article 2, provides that, as of the date of its notification, the benefits of the scheme in question may not be maintained by the renewal of existing agreements and that, if the approval is to expire before 31 December 2010, the benefits of the scheme may no longer be granted, even temporarily.

37It follows from all of the foregoing that the Council was not able to validly adopt the contested decision.

38Therefore, the Commission’s first plea in support of its action, arguing that the Council lacked the competence to adopt the contested decision, is well founded, and that decision must, accordingly, be annulled.

The other pleas

39Since the Commission’s first plea has been accepted and the contested decision must be annulled on that account, it is not necessary to examine the Commission’s other pleas in support of its action.

Costs

40Under 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 Commission has applied for costs and the Council has been unsuccessful, the Council must be ordered to pay the costs.

On those grounds, the Court (Second Chamber) hereby:

Annuls Council Decision 2003/531/EC of 16 July 2003 on the granting of aid by the Belgian Government to certain coordination centres established in Belgium;

Orders the Council of the European Union to pay the costs.

[Signatures]

*

Language of the case: French.