The European Court of Justice, in a judgement delivered on Tuesday 6 November (cases C-622/16, C-623/16, C-623/16, C-624/16), annulled a 2012 European Commission decision which considered illegal aid in the form of an exemption from the Italian Municipal Property Tax (ICI) for non-commercial entities - such as religious institutions - engaged in school or accommodation activities to be irrecoverable.
The Montessori private educational establishment and Mr Ferracci, owner of a Bed & Breakfast, asked the EU Court to annul the Commission's decision of late 2012, arguing that the contested decision had placed them at a competitive disadvantage compared to ecclesiastical or religious entities located in the immediate vicinity and carrying out similar activities benefiting from tax exemption.
In its judgement, the Court examines, on the basis of Article 263 of the Treaty, the admissibility of direct actions brought by competitors of beneficiaries against a Commission decision according to which an illegal State aid scheme cannot be recovered.
The European Court notes that the contested decision: - is a regulatory act, i.e. non-legislative act of general scope; - directly affects the Montessori school and Mr Ferracci; - does not include any implementing measures with regard to them. He concludes that the appeals are admissible.
On the substance, the Court points out that the adoption of an order to recover unlawful State aid is the logical consequence of the finding that it is unlawful. According to the Commission, recovery of unlawful aid can only be considered objectively impossible when two conditions are met: - the reality of the difficulties invoked by the Member State concerned in recovering the unlawful aid; - the absence of alternative recovery methods.
Simply noting the impossibility of obtaining the information necessary for the recovery of the aid through Italian cadastral and tax data was not enough, the European judge considers. Since the Commission did not also examine the existence of alternative means of recovery, the Court of Justice annuls the judgement of the Court of First Instance (T-220/13) dismissing the actions on the merits and the contested Commission decision. (Original version in French by Mathieu Bion)