(State aid – Definition – Non-payment of taxes and social security contributions by an undertaking – Attitude taken by the national authorities following a declaration of suspension of payments)

Summary of the Judgment

(Art. 87(1) EC)

(Art. 87 EC)

The concept of aid within the meaning of Article 87(1) EC is wider than that of a subsidy because it embraces not only positive benefits, such as the subsidies themselves, but also measures which, in various forms, mitigate the normal burdens on the budget of an undertaking.

(see para. 24)

(see para. 31)

JUDGMENT OF THE COURT (Second Chamber) 14 September 2004(1)

(State aid – Definition – Non-payment of taxes and social security contributions by an undertaking – Attitude taken by the national authorities following a declaration of suspension of payments)

In Case C-276/02, ACTION for annulment under Article 230 EC, brought before the Court on 23 July 2002,

Kingdom of Spain, represented by S. Ortiz Vaamonde, acting as Agent, with an address for service in Luxembourg,

applicant,

Commission of the European Communities, represented by V. Kreuschitz and J.L. Buendía Sierra, acting as Agents, with an address for service in Luxembourg,

defendant,

THE COURT (Second Chamber),

composed of: C.W.A. Timmermans, President of the Chamber, C. Gulmann, J.-P. Puissochet (Rapporteur), J.N. Cunha Rodrigues and F. Macken, Judges,

Advocate General: M. Poiares Maduro, Registrar: R. Grass,

having regard to the written procedure, after hearing the Opinion of the Advocate General at the sitting on 1 April 2004,

gives the following

1 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’).

2 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.

3. A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

(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.

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

The Commission points out, however, that it is not the agreements on waiver and debt rescheduling as regards the public creditors as such that gave rise to State aid, but the passivity of the social security and tax authorities after those agreements were concluded. Contrary to the assertion by the Spanish Government, the Commission has never stated in the present case that those agreements gave rise to State aid.

Findings of the Court

24Article 87(1) EC defines State aid which is governed by the EC Treaty as aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods, in so far as it affects trade between Member States. The concept of aid within the meaning of that provision is wider than that of a subsidy because it embraces not only positive benefits, such as the subsidies themselves, but also measures which, in various forms, mitigate the normal burdens on the budget of an undertaking (see, inter alia, Case 30/59 De Gezamenlijke Steenkolenmijnen in Limburg v High Authority [1961] ECR 1, 19; Case C-387/92 Banco Exterior de España [1994] ECR I-877, paragraph 13; Case C-256/97 DM Transport [1999] ECR I-3913, paragraph 19, and Case C-5/01 Belgium v Commission [2002] ECR I-11991, paragraph 32).

25In the contested decision the Commission does not call into question the agreements concluded with GEA and VANOSA for the waiver and rescheduling of debts. Contrary to the assertion of the Spanish Government, the Commission does not deduce that there is State aid from the fact that such agreements were entered into with the public creditors under a suspension of payments procedure.

26In the grounds and operative part of the contested decision, the Commission expressly refers to the persistent failure by the two undertakings to fulfil their obligations to pay taxes and social security contributions. According to the contested decision, inter alia in points 44 and 47, it is the advantage derived from the systematic non-payment of taxes and social security contributions between at least January 1997 and January 2001, that is to say, both prior and subsequent to the declaration of suspension of payments and the conclusion of the agreements, that constitutes State aid. That advantage results from the failure by the competent authorities to initiate separate forced collection procedures to prevent the two undertakings from continuing to operate, in particular after the agreements were entered into, without fulfilling their tax and social security obligations and, specifically, without honouring post-suspension debts not included in the waivers and schedule laid down in the agreements. At point 53 of the grounds of the contested decision it is stated that, by taking that attitude, the public creditors did not act as a private creditor trying to recover at least a marginal amount of unpaid taxes and social contributions.

27Accordingly, since it is based on a misreading of the contested decision, the first plea put forward by the Spanish Government must be dismissed.

Plea alleging an error of fact

28The Spanish Government claims in essence that the contested decision is vitiated by an error of fact, since the Commission considered that the Spanish authorities had remained inactive after the suspension of payments by GEA and VANOSA was declared in November 1997.

29Contrary to what is stated in the contested decision, both the social security and tax authorities used all the means available to them, in particular separate forced collection procedures, for the purpose of ensuring the recovery of debts which arose after the conclusion of the waiver and rescheduling agreements. The Spanish Government refers to the measures mentioned in paragraph 10 of the present judgment.

30The Commission, on the other hand, contends that the Spanish authorities did not show sufficient diligence when confronted with non-compliance on the part of the undertakings in question with their tax and social security obligations. The social security and tax authorities remained inactive after entering into the waiver and rescheduling agreements in 1998, which resulted in a considerable increase in subsequent debt.

31The legality of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted (see, inter alia, Case 234/84 Belgium v Commission [1986] ECR 2263, paragraph 16, and Case C-241/94 France v Commission [1996] ECR I-4551, paragraph 33).

32With regard to the basis for the contested decision, as was stated in paragraph 26 of this judgment, the Commission takes the view that State aid arises from the fact that the Spanish authorities did not initiate separate forced collection procedures and did not act as private creditors trying to recover at least a marginal amount of the debts owed to them.

33However, it is clear from the correspondence between the parties during the administrative procedure that the Spanish authorities had indicated that steps had been taken during the period from January 1997 to January 2001 to recover part of the public claims against GEA and VANOSA and to make the latter comply with their obligations. It is true that the information supplied to the Commission during the administrative procedure was less complete than that submitted by the Spanish Government in these proceedings and was at times imprecise, but it did not allow the Commission to conclude that the measures available under Spanish law (separate forced collection procedures) to prevent firms from continuing to operate without fulfilling their tax and social security obligations had not been applied at all and that the public creditors had therefore not acted as private creditors trying to recover at least a marginal amount of the debts owed to them.

34It is true that the Spanish authorities, in their reply to a request for information from the Commission, which the latter received on 5 July 2001, merely mentioned that the social security authorities had seized property belonging to GEA and VANOSA, without specifying the date on which those seizures took place or supplying information on possible action by the tax authorities. It was on that basis that, in its letter informing them of its decision to initiate the procedure laid down in Article 88(2) EC, the Commission pointed out to those authorities that they had not indicated that they had availed themselves of certain legal means available under national law such as the initiation of insolvency proceedings or separate forced collection procedures in order to put an end to the failure by the undertakings to fulfil their social security and tax obligations.

35In their observations in reply, which the Commission received on 4 December 2001, the Spanish authorities stated that since GEA and VANOSA had not complied with the agreements of 14 April 1998, the tax authorities had cancelled them on 7 February 2001 and a certain number of forced collection measures had been set in motion again. In that regard, they cited the attachment of debts owed by customers, trade marks and shares of subsidiaries and seizure of properties. They also pointed out that a first charge had been taken over a property. That information can be understood as meaning that the forced collection procedures referred to were set in motion again only after the period covered by the contested decision, which ended in January 2001. The Spanish authorities also referred, however, to a report and to social security documentation annexed to their reply, including, inter alia, a statement of properties seized, and bank accounts and debts owed to the two undertakings by other undertakings or the Treasury that had been attached. Consideration of that statement makes clear that several attempts to seize property that had been initiated between 1993 and 1996 were set in motion again between October 1997 and November 1998, that on 1 February 2001 the attachment of a bank account of GEA was notified to the bank concerned, which presupposes that this measure was being prepared in the preceding weeks, and that on 9 April 2001 a debt owed by the public treasury was also attached.

36In the light of that information, the Commission could not consider that in general ‘[the Kingdom of Spain failed] to take measures available under Spanish law (separate forced collection procedures) to prevent firms from continuing to operate without fulfilling their tax and social security obligations’ and to deduce therefrom that ‘nothing in the State’s behaviour suggests that it acted as a private creditor trying to recover at least a marginal amount of unpaid taxes and social contributions’.

37Without prejudice to the question of whether or not State aid is involved in the present case, it must therefore be held that the conclusion in the contested decision that the ‘persistent non-payment of taxes and social security contributions by [GEA] and VANOSA following the suspension of payments in November 1997 until January 2001 [constitutes State aid] incompatible with the common market’ is based on factually erroneous premisses. Accordingly, the contested decision must be annulled, without there being any need to examine the other pleas in law or arguments put forward by the Spanish Government.

Costs

38Under 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 Spanish Government has asked that the Commission be ordered to pay the costs and the latter has failed in its submissions, it must be ordered to pay the costs.

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

Annuls Commission Decision 2002/935/EC of 14 May 2002 on the State aid granted to Grupo de Empresas Álvarez.

Orders the Commission of the European Communities to pay the costs.

Signatures.

Language of the case: Spanish.