IMPUTABILITY
TO A MEMBER STATE
© ŁUKASZ STĘPKOWSKI
FOR LL.B. INTRODUCTION TO EU STATE AID LAW
107(1) TFEU
• Article 107(1) TFEU: “Save as otherwise provided in the Treaties, any 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 shall, in so far as it affects trade between Member States, be
incompatible with the internal market”.
• The criterion that an aid measure must be granted by a Member State is called imputability
• Given that all criteria for State aid must be satisfied at the same time, absence of imputability means absence of an aid measure
Measures not granted by Member States
• Measures granted by the European Union itself are by definition unable to be State aid (joined cases 213 to 215/81 BALM, EU:C:1982:351, para. 24)
• This covers measures where a Member State performs only an administrative role, with no discretion as to for whom and which aid is to be granted
• Measures granted by international organisations (or institutions thereof) are not State aid
• E.g. financial aid granted by the European Bank for Reconstruction and Development (the EBRD), an international financial institution, would not be State aid
• Measures independently granted by private entities
a „Member State” for the purposes of Article 107(1) TFEU
• a Member State under Art. 107(1) TFEU encompasses all branches of government
• There was a question whether a national court, acting in its judicial capacity may effect a State aid measure
• Judgment of the Court of 26 October 2016, C-590/14 P Dimosia Epicheirisi
Ilektrismou AE (DEI) v European Commission, EU:C:2016:797, para. 107: order for interim measures as State aid
• Net effect: judicial measures may also be State aid (and courts may be obliged to notify them)
• a „Member State” for the purposes of Art. 107(1) TFEU incorporates all tiers of government, if any, as well as all units of local government
• For instance, a measure granted by a województwo (voivodeship, a Polish unit of local government) is imputable to the Polish state, the same being applicable to a gmina (municipality) or a powiat
• The notion covers both unitary and federal structures
• Normally, a Member State may not plead its constitutional structure to avoid classification of a given measure as State aid
a „Member State” for the purposes of Article 107(1) TFEU
Exception: a doctrine of sufficiently autonomous entities
• The Court of Justice in C-88/03 Portuguese Republic v Commission of the European Communities, EU:C:2006:511, has accepted that a certain structure of devolved local government renders a certain set of measures unable to be State aid by virtue of their structure alone
• In a model for distribution of tax competences in which all the local authorities at the same level (regions, districts or others) have the autonomous power to decide, within the limit of the powers conferred on them, the tax rate applicable in the territory within their competence, a tax measure of that type, taken by a local authority, is not selective because it is impossible to determine a normal tax rate, capable of constituting the
reference framework
• Therefore, a status of a regional authority of that type in that kind of a situation alone – even if it is indeed a part of a constitutional structure of a given Member State, and
hence a „Member State” – makes it impossible for a tax measure being introduced to be classified as State aid
The grant of State aid by a Member State
• Member State may either grant aid directly (e.g. as a contract entered into by a State Treasury) or through an intermediary
• In principle, there is no distinction for the purposes of aid whether it has been granted directly or through an intermediary
• Similarly, the national legal status of the intermediary at issue (e.g. a company) is irrelevant
• Public and private bodies may in fact grant aid, provided that conditions for imputability are met
Landmark case : Stardust Marine
• Judgment of the Court of 16 May 2002, case C-482/99 French Republic v Commission of the European Communities, ECLI:EU:C:2002:294, on aid granted to the French Republic to Stardust Marine
• „(…) no distinction is to be drawn between cases where the aid is granted directly by the State and those where it is granted by public or private bodies which the State
establishes or designates with a view to administering the aid, as EU law cannot permit the rules on State aid to be circumvented merely through the creation of autonomous institutions charged with allocating aid.”
The Stardust Marine approach
• The mere fact that an intermediary is a public undertaking is insufficient as evidence of imputability
• Rather, the Court requires the Commission to consider the entirety of facts as to the link of an intermediary to a State
• the actual demonstration of Member State involvement, according to the Court, would not be necessary (although would be decisive if such a „smoking gun” were to be
found)
• The Court introduced a set of non-exhaustive criteria for assessing imputability
The Stardust Marine criteria
• the body in question could not take the contested decision without taking account of the requirements of the public authorities,
• factors of an organic nature existed, which linked the public undertakings to the State,
• the fact that bodies acting as intermediaries had to take account of directives issued by a State organ,
• integration of the body involved into the structures of the public administration,
• the nature of activities of the body in question,
• the exercise of those activities on the market in normal conditions of competition with private operators,
• the legal status of the undertaking (in the sense of its being subject to public law or ordinary company law),
• the intensity of the supervision exercised by the public authorities over the management of the undertaking,
• or any other indicator showing, in the particular case, an involvement by the public authorities in the adoption of a measure or the unlikelihood of them not being involved, having regard also to the compass of the measure, its content or the conditions which it contains.
The Stardust Marine criteria
• the mere fact that a public undertaking has been constituted in the form of a capital company under ordinary law cannot, having regard to the autonomy which that legal form is capable of conferring upon it, be regarded as sufficient to exclude the possibility of an aid measure taken by such a company being imputable to the State
• On the other hand, organic links to the State make it impossible to exclude imputability from the ’get-go’
Fraud and imputability
• Fraud may exclude imputability, even if normally a measure would have been imputable to a Member State
• Judgment of the Court of 17 September 2014, case C-242/13 Commerz Nederland NV v Havenbedrijf Rotterdam NV, ECLI:EU:C:2014:2224, para. 39 (improper conduct of a
company director, no prior knowledge of State authorities as to a guarantee).
Imputability and minimum standards
• imputability may be established where a measure, despite being negotiated without amy actual State action, is based upon a contract imputable to a State that requires a minimum standard to be observed
• Judgment of the General Court, case T 468/08 ‑ Tisza Erőmű kft v European Commission, ECLI:EU:T:2014:235, para. 176 (electrical power purchase agreements)
Imputability and specific enactments
• a measure introduced by a specific national law or regulation would be attributable to a State
• C-262/12 Association Vent De Colère! Fédération nationale and Others v Ministre de l’Écologie, du Développement durable, des Transports et du Logement and Ministre de l’Économie, des Finances et de l’Industrie, ECLI:EU:C:2013:851, para. 18
• actions of a national bank set up by a specific law, which is found to operate differently from other banks that are commercial in nature and is subjected to intense supervision by a State, are imputable to that State
• T 387/11 ‑ Nitrogénművek Vegyipari Zrt. v European Commission, ECLI:EU:T:2013:98, para. 66
• a measure may not be imputed to a State if it would be carried out in implementation of a directive that imposed a clear and precise obligation
• T-351/02 Deutsche Bahn AG v Commission of the European Communities, ECLI:EU:T:2006:104, para.
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