Brussels Brief - September 14, 2007
September 14, 2007
Full Printable Version in PDF Format
(Adobe Acrobat Reader required, available for free download here)
KEY DEVELOPMENTS
State Aid: Partial Annulment of Commission Decision on Aid to Olympic Airways
Yannis Virvilis
The European Court of First Instance (CFI) has partially annulled the 2002 Commission Decision concerning aid given by the Greek State to the Greek national carrier Olympic Airways. In its 2002 Decision, the Commission found that the restructuring aid adopted in 1998 had been wrongly implemented. The Commission also ruled that the Greek State had given a new, non-notified aid to Olympic Airways, consisting of a number of financial advantages. These included non-payment or deferred payment of social security contributions, VAT, airport charges and other taxes. The CFI rejected all of Olympic Airways’ claims regarding the restructuring plan, but annulled the Commission Decision with regard to the new non-notified aid, mainly for lack of adequate reasoning.
Competition: CFI Reduces Fines on European Haberdashery Cartel
Emanuel De Duonni
The European Court of First Instance (CFI) has rejected actions brought by European haberdashery producers Prym and Coats seeking annulment of the fines imposed on them by the European Commission, and has instead opted for a reduction of penalties. On 26 October 2004, the Commission found that Prym, Coats and Entaco had been involved in a cartel, and imposed a cumulative fine on Prym and Coats of EUR 60 million. Entaco was not fined because the company co-operated with the Commission’s investigation. The CFI Judgments reduced Coats Holdings’ original fine from EUR 30 million to 20 million on the grounds that they were merely “facilitators”, while Prym’s fine was reduced from EUR 30 million to 27 million for non-contestation of facts, in accordance with the 1996 Leniency Notice.
State Aid: Commission Investigates Subsidies to Deutsche Post
Juan Gutiérrez
The European Commission has opened a formal investigation against Germany to assess whether compensation received by Deutsche Post is compatible with EC Treaty State aid rules. In a Decision taken in 2002, the Commission found that Deutsche Post used public funds, intended to compensate for universal service costs, to finance a rebate pricing policy in its door-to-door parcel business. Following the 2002 Decision, private competitors filed complaints alleging that Deutsche Post had gained excessive benefits from public compensation and had used these to expand its commercial activities. The Commission’s investigation will determine whether Deutsche Post was overcompensated for carrying out its universal service obligation above and beyond the illegal aid identified in the 2002 Decision.
Internal Market: Pints, Miles, Yards, Feet and Inches Can Stay
Alana Tart
The European Commission has proposed that the United Kingdom and Ireland be allowed to continue to use both metric and other measurements – such as pints for some liquids and miles, yards, feet and inches in measurements of length – without a fixed date for ceasing to do so. These exceptions to Directive 80/181/EEC, which harmonised the legal units of measurement for expressing quantities in the European Union, have been found not to impact on the single market or impede cross-border trade. The Commission has also proposed extending indefinitely the use of supplementary indications next to metric units in order to facilitate trade with the United States.
Air Transport: Two More Airlines Banned From EU Airports
Philip Torbøl
The European Commission has added Ukrainian Mediterranean Airlines and Iranian airline Mahan Air, to the list of air carriers that are prohibited from operating flights to and from the European Union. The decision was taken following notification from several Member States and a unanimous recommendation from a committee of air safety experts. This was the fifth update to the EC blacklist established in March 2006.
State Aid: CFI Partly Annuls Commission Decision on Dutch Financing Scheme
Chen Dingsheng
In 2003, the European Commission declared that a Dutch scheme for international financing activities (GFA scheme) constituted State aid. As such, it had to be terminated over a transitional period, during which time the companies covered by the scheme could still benefit from it. The Netherlands authority rejected the GFA request by Koninklijke Friesland Foods (KFF) in August 2003, on the grounds that it was excluded from the transitional provisions of the Commission’s Decision, despite KFF’s request being lodged seven months before initiation of the investigation. The Court of First Instance held that by excluding KFF from the transitional provisions, the Commission infringed the principle of protection of legitimate expectations and the general principle of equal treatment.
State Aid: Commission Investigates Proposed Training Grant to Volvo
Bróna Heenan
The European Commission has opened an in-depth investigation to determine whether a training grant of EUR 6 million, that the Flemish Region in Belgium intends to grant to Volvo Cars, infringes EU rules on State aid. The supported training activities relate to a new production platform designed to allow production of Ford and Jaguar models in addition to the existing Volvos. The Commission’s concern is that the grant covers training costs that the company would have incurred anyway as it is related to production using the new more flexible platform. If so, the aid package would be considered as operating aid and prohibited. The Commission’s investigation will determine whether the grant can be allowed under the State aid rules.
Taxation: Deduction of German School Fees Contrary to EU Law
Geert Dierickx
Under certain conditions, part of the school fees paid to German private schools are tax deductible for German residents. This tax relief does not, however, apply to fees paid by German residents to schools situated in other EU Member States. Recently, the European Court of Justice ruled that the relief disadvantages individuals who send their children to private schools in another Member State on the grounds that they are exercising their freedom of movement. Although both direct taxation and the organisation of the educational system are under individual Member States’ competence, the Member States must exercise this in compliance with Community law. By excluding from tax relief school fees originating in another Member State, Germany has failed to fulfil its obligations concerning the freedom of establishment and provision of services.
NEXT WEEK’S EVENTS
Monday 17 September – Friday 21 September 2007
COUNCIL MEETINGS
Justice and Home Affairs Council (JHA) (18 September 2007)
COURT OF JUSTICE
Judgments
Approximation of laws
C-84/06 Antroposana and Others
Environment and consumers
C-388/05 Commission v Italy
C-304/05 Commission v Italy
External relations
C-16/05 Tum & Dari
Free movement of goods
C-297/05 Commission v Netherlands
Intellectual property
C-371/06 Benetton Group
Social policy
C-116/06 Kiiski
State aid
C-177/06 Commission v Spain
Taxation
C-74/06 Commission v Greece
Opinions
Common foreign and security policy
C-91/05 Commission v Council
Freedom to provide services
C-220/06 Asociación Profesional de Empresas de Reparto y Manipulado de Correspondencia
C-346/06 Dirk Rüffert
Taxation
C-368/06 Cedilac
COURT OF FIRST INSTANCE
Judgments
Competition
Joined Cases T-125/03, T-253/03 Akzo Nobel Chemicals and Akcros Chemicals v Commission
T-201/04 Microsoft v Commission
Intellectual property
T-461/04 Imagination Technologies v OHMI ( PURE DIGITAL)
State aid
T-375/03 Fachvereinigung Mineralfaserindustrie v Commission
T-254/05 Fachvereinigung Mineralfaserindustrie v Commission
