C-44/81

JUDGMENT OF 26. 5. 1982 — CASE M/81

In Case 4 4 / 8 1

FEDERAL REPUBLIC OF GER.VUNY A N D BUNDESANSTALT FIR ARBKIT, Nürnberg [Federal Labour Office, Nuremberg], represented by M. Seidel. Ministe- rialrat at the Federal Ministry for Economic Affairs, Bonn, and by J Sedemund, acting as Agent, duly authorized to act in the proceedings, with an address tor service in Luxembourg at the Chancellen ot the Embassy of the Federal Republic of Germany, 3 Boulevard Royal, applicants.

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and IRELAND, represented bv L. J. Dockery, Chief State Solicitor, acting as Agent, assisted by E. P. Fitzs'imons, Senior Counsel, and J. O'Reilly, Barrister at Law, with an address for service in Luxembourg at the Irish Embassy, 28 Route d'Arlon, intervener, v

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by J. Amphoux, Legal Adviser to the Commission, assisted by M. Hilf, a Member of the Commission's Legal Department, with an address for service in Luxembourg at the office of O. Montalto, a Member of its Legal Department, Jean Monnet Building, Kirchberg, defendant,

APPLICATION

JUDGMENT OF 26. 5. 198: — CASE 44/81

JUDGMENT

Facts and Issues

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been paid, the Member State is required By the same document the government to furnish within three months the sup- of the Federal Republic of Germany also porting documents specified in Article brought an action for a declaration that 4 (1) of Council Regulation No 858/72. the communication sent to it by the Failing submission of the latter, the full Commission on 16 December 1980 was amounts paid must be recovered. void. Similarly, if the supporting documents presented in connection with the above Upon lodging an application at the two cases do not fully account for the Court Registry on 17 June 1981 Ireland advances paid, procedures for recovery was allowed to intervene by order of the of the remainder will be initiated, pref- Court of 1 July 1981 in support of the erably by offsetting any payments made conclusions of the government of the against another operation. Federal Republic of Germany and of the Bundesanstalt für Arbeit, Nürnberg, the Any appropriation that cannot be used as applicants. a result of rejection of the request for Upon hearing the report of the Judge- payment will be released for reallocation Rapponeur and the views of the by the fund staff and the case will be Advocate General, the Court decided closed. The same procedure will be to open the oral procedure without followed if 18 months after completion any preparatory inquiry. However, it of the operation no claim for payment is requested the Commission to inform it in submitted under a decision granting writing before the hearing of the pro- approval. cedures and time-limits, including any time-limits entailing forfeiture of rights, In any case, rejection of a claim for laid down in the context of the European payment of the balance submitted after Agricultural Guidance and Guarantee the time-limit does not call in question Fund and of the Regional Fund for any previous supplementarv· payment the submission of applications by the unless the claim for payment in question Member States for payment of aids reveals a negative balance which would granted to them by the Community. then have to be recovered.

Declare that the Commission's letter of by reason of their content and of their 16 December 1980 concerning the form, the letters addressed to them by application of Article 4 or the the Commission cannot be considered as Commission Decision 78/706/EEC of 27 acts within the meaning of the first July 1978 on certain administrative pro­ paragraph of Article 173 of the EEC cedures for the operation of the Treaty. As to their substance, these European Social Fund is void. letters constitute a mere refusal to pay which, in accordance with the general The government of Ireland adopts the principles of law, is a mere factual step conclusions of the applicants. and not a legal act independently producing legal effects. The Commission contends that the Court should: In its defence the Commission considers that the claim for payment is based upon 1. Dismiss the principal claim contained an application by analogy of the second in the first head of claim as paragraph of Article 215 of the EEC unfounded and dismiss the alternative Treatv. According to the Commission claim as inadmissible; the analogy appears to consist in the fact that, instead of concerning reparation for 2. Dismiss the second head of claim as an injury, the application seeks to obtain inadmissible; a benefit which has not yet been provided. In connection with this special 3. Order the applicants to pay the costs. procedure the Commission states that it would not oppose it if it were the only means available to the applicants of obtaining effective legal protection by IV — S u b m i s s i o n s and a r g u m e n t s the courts but it cannot agree to the of the parties extension to this case of the decisions of the Court on the second paragraph of Article 215 in accordance with which an A — Concerning the first bead of claim application based on that provision is not subject to an action for annulment or for failure to act, even where such actions 1. Admissibility lie. In the view of the Commission such actions were available in this case and the proceedings instituted by the appli­ (a) Of the principal claim cants are thereby rendered inadmissible. In this connection it claims that, on the According to the applicants when a one hand, it is impossible to rule out the person entitled to a right enforces a right possibility that the letters whereb;. u to the pavmrnt of a sum of money it refused payment of the balances claimed must be open to him. in accordance with should be considered as act* within the the provisions of Anicie 213 of the EEC meaning of Anicie 173 of the EEC Trean. to enforce such rights direcži) by Treatv against which an application for means of a claim for payment. As the annulment accordingly ¡ies. although it case-bo. of the Court oí Justice on recognizes that there arc pood grounds Article lib ot the EEC Treaty shows, for regarding those letters simply as that claim for payment is in no way factual steps without lepal effect, stating conditional upon success in a prior that the time-limit has expired and procedure for annulment under Article indicating the consequences laid down in 173 of the EEC Trean. In anv event the such circumstances in the Commission applicants point out as a precaution that.

Decision of 27 July 1978 regarding the subsidiary in relation to the former operation of the European Social Fund actions. (Official Journal, L 238, p. 20). On the other hand, even if these letters are not to be considered as decisions it would In its rejoinder the Commission maintains that the applicants had have been possible, according to the available to them effective legal Commission, to initiate the procedure protection within the framework of the for failure to act under Article 175 of the proceedings for failure to act provided

The Court of act. The existence of such an action is Justice in fan has in principle only the furthermore generally recognized in the powers which have been conferred upon Member States as a procedure for it by the Treaty and it appears that the enforcing a right to payment. In addition contracting parties to that Treaty did not it is only by recognition of that right that consider it necessary to make provision it is possible to treat in the same way for proceedings for enforcement, at least rights to payment arising directly from a in relations between the Community measure of Community law and the institutions and the Member States.

JUDGMENT OF 26. 5. 1982 — CASE *»/8i

Treaty. The letters of 11 and 13 July do letter which is purely confirmatory and not correspond, as to either form or that, according to the case-law of the content, to an act of that class. They Coun, such letters do not constitute were in fact addressed to a particular legal acts which may be contested. With person rather than to the Permanent regard to the possible revocation of Representative of the Federal Republic the credits which, according to the of Germany in Brussels or to the Federal applicants, distinguishes the letter of 1C Minister for Labour and Social Affairs, December from the preceding letters, the were in the form of a mere duplicated Commission maintains that this is an communication, gave no indication internal measure which is not decided whatever that in this matter the until all controversy has been settled.

According to the applicants these letters may be Since no factor of that nature »as understood as constituting a communi established the communication con cation o! a son not unusual in the firming that the Commission had noi administration of the rund. which modified us point ot vie» was noi. necessitated a more thorough examin according to the Commission, a legal ation of the circumstances of the request act capable of being contested. In tor pavment. That impression was consequence the Commission considers strengthened DV the subsequent course of me alternarne claim as inadmissible.

Nevertheless, the applicants contend that and 8 of Regulation No 2893/77 and the letter of 10 December 1980 Article 4 of Regulation No 858/72, constitutes the first declaration of the adopted by the Council, show that the Commission after it was duly notified of Commission must make the payments the matter, in which it set out an when the conditions fixed by the Council objective view of the matter, thereby are fulfilled. Anicie 13 of Regulation No ruling out the possibility of proceedings 2396/71 of the Council, upon which for failure to act. In those circumstances Decision 78/706 was based, expressly and in case the Court dismisses the restricted the powers of the Commission applicants' principal claim it will be to the measures necessary for the necessari.·, in order to avoid a lacuna in application of the implementing regu- the arrangements for legal protection, lation adopted by the Council.

Any alteration of its views. The director of exception to that rule must be laid down the European Social Fund merely expressly in the provisions enacted by the declared himself willing to discuss the Council, as is shown by Anicie 4 of matter and, within the framework of the Council Regulation No 852/72 which discussions which took place, the fixes, in conditions which are clearly Commission made it plain that it was defined, the powers of the Commission unable to review its decision to refuse to reduce or withhold payment of aid. payment. The letter of 1C December Finally, the applicants remark that in 198C merely confirms that position. their view the matter of ascenaining whether rights to payment already vested, arising from assistance for

rights. Pursuant to Anicie 127 of the the time-limit in question is one EEC Trcatv decisions of substance involving absolute loss of rights is noi concerning the use ot the financial contirmed either bv the wording or h\ resource;· ol the Fund. includine tnr place of Article 4 in the general plnn implementing provisions. belong in ol Commission Decision 7^· 2 On tru- principal to the Council since that contran', according to the applicants, the provision reserves to the Council power wording of Article 4(1) indicates instead to lav down the provisions required to that the provision in question is ot an implement Article« 12·» to 12o Anieles 7 administrativt nature ana thai impression

is further borne out by the recitals in the breach of the principle of proportionality preamble to Decision 78/706 which since the objective in view, to speed up relate to that provision and by the fact the procedure, can be attained by less that Article 2 of Decision 78/706 severe means, such as an administrative expressly lays down the consequences of provision which allows of exceptions failure to observe the time-limit which are objectively justified but which mentioned therein. In the applicants' certainly does not preclude a lawful view if the Commission's intervention refusal to pay if the time-limit is arbi- was to have been accompanied in Article trarily exceeded. The applicants further- 4 with a penalty so serious as a time-limit more remark that risk of arbitrarily carrying absolute loss of rights it ought exceeding the time-limit is reduced since to have been expressly included in the any recipient of aid from the Fund has provision (as it was in Article 2) or at an interest in obtaining reimbursement of least in the recitals in the preamble to the his expenditure as soon as possible in decision. order to reduce the expenses and interest which he must bear. Furthermore, an interpretation of Article 4 of Decision 78/706 as laying down a The Commission rejects in their entirety time-limit involving absolute loss of the arguments relied upon by the rights is contrary to the objective in view applicants to show that it has acted and foreign to the subject-matter in question because it adversely affects unlawfully. recipients of assistance from the Fund who are particularly scrupulous in With regard more particularly to the drawing up their accounts precisely in powers of the Commission to fix a time- the interest of the Fund itself and might limit involving loss of rights the induce the Member States to use up all Commission remarks that, in its view, instalments even if it may be foreseen Article 4 of Decision 78/706 constitutes thai not all the credits originally granted the corner-stone of a reform of the

The provision. This is all the more true since provision concerning the time-limn in relation to projects concluded before 1 which is contained in Article 4 of the January 1978 the Commission on a contested decision was furthermore number ot occasions extended the time- favourably received by the represen- limus for submitting requests for tatives of the Member States when it »as payment. introduced and resulted in the appropri- ations being used to the extent of 78.S -/: Finallv. the applicants claim that an in 1979 and i : : % m I9S0.

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Percentage in relation Percentage in relation žjnexpenaeo balan« of to the previous Appropriation! to the prcviouï prcviouï appropriation! fináncul yeir financial vrar

95337 — 1977 616-63 — ,978 568-08 - 7-87 1221-15 +28-09 ,979 774-45 +36-32 1341-03 + 9-81 ,980 1014-22 +30-96 1399-88 + 4-24

The Commission emphasizes the Finallv the Commission considers that reduction thereby brought about in the the reference made by the applicants to growth of an unexpended balance of the power expressly conferred on the appropriations which probably made the Commission to reduce or terminate budgetary authority less willing to enter assistance where irregularities or changes new appropriations in the budget and are revealed in the operations referred to which, by requiring the implementation (Article 4 of Regulation No 858/72 as of part of the prior commitments, froze amended by Council Regulation No in advance part of the authorizations of 2894/77) does not provide grounds for pavment, thereby reducing the financial concluding by inverse reasoning that it margin available at the beginning of each was improper for the Commission to lav- financial year. The Commission down a time-limit capable of rendering accordingly concludes that the fixing of inadmissible a request for payment of the a time-limit permitted it to conclude balance of the assistance. That time-limit after the financial year 1981 a large is in fact related to the conclusion of number of projects and to create a procedures concerning projects which as climate favourable to fresh action by the such may not be compared with the rules Social Fund. quoted by the applicants.

In the Commission's view the Member in breach of the principle of proportion- States could not be mistaken as to the ality. meaning of these provisions. It also maintains that only a time-limit involving The Commission finally emphasizes that loss oí rights could induce Member although in respect of projects concluded States to take the necessari.· action to before 1 January 1978 it adjusted time- speed up the conclusion of procedures limits in accordance with Decision concerning financial aids for projects 78/706 and may possibly have fixed new

effectively. In their reply the applicants emphasize above all the fact that their application is Finally the existence of a time-limit not based on any illegal conduct on the involving loss of rights does not prevent pan of the Commission but in fact on the Commission from taking exceptional the decision of the Commission of 23 circumstances into consideration pro- December 1977 giving its approval, vided that such difficulties are notified to which the applicants claim should be it in good time, that is to say before the implemented. According to them the

expectation. Commission to fix a time-limit involving loss of rights the applicants consider that once the appropriations are committed With regard to any breach of the the Commission is concerned only with principle of proportionality the Com- carrying out the detailed implementing mission remarks that, according to it, a provisions adopted by the Council since time-limit of lt> months, like that which the principle is that once agreement is was laid down in the provision in obtained on an intervention by the Social question, provides any State admin- Fund in respect of a project which has istration operating normally with a been submitted any claimant must :>e margin of lime which is sufficient, if not fully reimbursed for costs which he has evcessive. to submit the final accounts of incurred in duly earning out the project protects atter their conclusion. Further- covered by the assistance by means of more, as the Member btates are in a credits from the Fund placed at his position to notify the Commission before disposal tor that proiect. the expirv of the time-limits of particular problems which thev encounter there are In that context the power conferred no grounds tor considering the iime-ltmii upon the Commission by Anicie 13 of

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They claim in decisions of substance, including particular that the year 1978, being a settlement of matters of detail and has transitional year, is not representative, furthermore made use of this power. The that the reduction in the percentages of Commission accordingly cannot in this appropriations committed but not yet sphere fix time-limits involving loss of used may equally well be explained by rights which, although they are proc- other improvements in procedure and edural provisions, result in a material above all by pressure in the form of the restriction of the legal rights of recipients interest charges borne by the Member of assistance and affect the substantive States if they are late in rendering their accounts and finally that it is impossible scope of the rules adopted by the to see how the prime objective of the Council which the Commission is no Fund which, in the Commission's view, more entitled to modify than are the consists in attaining the socio-political

out. With regard to the need for laying that the time-limit fixed by the down a time-limit involving loss of rights Commission must be interpreted, if in order to prevent appropriations regard is had to its place in the general committed from being frozen for too plan of the scheme, as an administrative long or in the end not being used, the time-limit which, when it is exceeded for applicants claim that whilst that factor reasons duly given, cannot affect the may suffice to establish thai such a time- rights of a claimant for assistance.

On the contrary if the fixing ol a least tne Commission extended the time- time-limn must in lact be considered as a limn, the possibility reterred to in the "cornerstone" of the reform of the letter of lb December 1980 of taking Social Fund it cannot come within the into consideration documents submitted powers of the Commission alone. atter tnc expirv ol tnr iime-iimit in order

to justify advances not yet settled, the the separate statement for each recipient fact that it would be contrary to the was discussed at the offices of the principles applicable in this field to place Bundesanstalt from 5 to 7 April 1976 and at a disadvantage claimants for assistance finally that the question of the clearing who check with particular care the right of the accounts was discussed with the to the payment of balances, even at the competent director of the Social Fund on cost of exceeding the time-limit by a very 2 February 1977 in Nuremberg.

The applicants also the applicants consider that it is recall that their belief that this interpre- unlawful. In their view the first kind of tation was correct was further reinforced time-limit is contrary to legal certainty by the request for information from the which requires that a time-limit should Commission of 9 May 1980 and by the be fixed in advance by the Community entry into negotiations in the course of legislature. It refers in this connection to the second half of 1980. The applicants the above-mentioned judgment in Case also refer to what in their view 41/69.

reasons are given. With regard to the since, in the absence of any communi- Commission's argument to the effect that cation to the contrary, they were entitled that wide discretion requires that it be to consider that the time-limit notified of the reasons for the delay constituted a purely formal time-limit before the expiry of the time-limit they and. finally, the time-limit was laid down emphasize thai the Commission was by an institution which had no power so aware before the autumn of 1983 of the to act.

legislation. Admittedly that provision appropriate proof, thai the question of does not authorize the Commission to

adopt all measures which appear to it August 1980 to 31 May 1981 it was able appropriate or necessary in order to to make within the prescribed time-limits supplement the arrangements in force 511 final payments, of which 36 but restricts its role to determining the concerned requests for balances of rules necessary to the administration of German payments and that it found only the Fund. The fixing of time-limits two cases where time-limits were involving loss of rights is in fact exceeded by other Member States in necessary for the good administration of September 1981 and only one in October the Fund as was moreover recognized by which furthermore was by a very small the Court in its judgment of 30 margin. It follows that the stria November 1972 (Case 32/72, [1972] application of the time-limit by the ECR 1181) and in its judgment of 16 Commission meant that the adminis December 1976 (Case 45/76, [1976] trations of the Member States were ECR 2043). obliged to adapt themselves to that

law. With regard to the interpretation of the With regard to the need for and the time-limn fixed by Article 4 of its appropriateness of the contested time- Decision 78/706 the Commission, after limit in relation to the good ad emphasizing that exceeding a time-limit ministration of the Social Fund the casts no light at all on the legal views of Commission maintains that the situation the Member States exceeding it and that radically improved after the modification in anv case the opinion of the Member of the administrative arrangements, of States is of no particular value in the which the introduction of the time-limn interpretation of a provision of Com of 18 months constitutes one of the munity law, maintains that an effect of

In this units of account. With regard to the connection it refers to the ludgment of length of the time-limit fixed by the the Court ot' 3C November 1972 (Case Commission it remarks that from 1 32/72 [1972] ECR 1IS1).

Naturally the fixing of the contested B — The second head of claim time-limit for making the payments was not intended to have an adverse effect on Member Sutes which are particularly 1. Admissibility scrupulous in supervising projects but the Commission considers that the According to the applicant the assumption which the applicants made administration of the Fund, by its letter that a time-limit prescribed within the of 16 December 1980, adopted a series framework of a general scheme of of provisions which considerably ex- administration would have no legal ceeded the framework of Article 4 of consequences does not constitute, having Commission Decision 78/706 and which regard to the experience of the Member were clearly intended to regulate, Sutes in this sphere, conduct worthy of exhaustively and in their entirety, the protection. consequences of failure to observe that

circumsunces. The Commission for its part maintains that the circular letter issued by the Finally with regard to the argument competent director of the administration regarding the cumbersome nature of the of the Social Fund on 16 December 1980 present system of administration the cannot be considered as a legislative Commission claims that it is not appro- measure. That letter was preceded by priate in this case to consider whether it rwo other letters dated 27 April 197e· and is too cumbersome and might not be 29 Februar)' 19SC of identical content replaced by simpler arrangements. The concerning the time-limit of 18 months present measures were enacted after established by Commission Decision consultation with experts from the 78/706.

supported by the Social Fund. More particularly the letter of 16 December I9SC appeared necessan. in (b) With regard to the alternative claim order to explain the effects ot the expm of the time-limn, with regard to their Since the submissions made in support of administrative implications. Circulars o! the alternative claim are identical to this nature are known to the those relied upon in support of the main administrations ot all the Member States claim it is sufficient to refer to the and no administration considers that considerations set oui above. they may be contested Onlv individual

decisions adopted subsequently may be for by appropriate documents to be contested. submitted and, therefore, according to the applicants, loss of the assistance of In its reply the applicant claims that the the Fund where time-limits are not circular letter describes various phases of observed depends upon the balances the administrative procedure in such a paid. An applicant for payment who fails way as to imply that it does not expect, to respect the time-limits and who has and at the same time that it by obtained significant balances is thus implication requires, Member States to treated better than an applicant who has

circular which adversely affects them directly and not only the subsequent Misuse of powers may also be discerned individual decisions. The applicant can in the fact that the administration of the thus establish an interest in taking Fund is prepared to recognize payments proceedings for the annulment of that of instalments even when no request for circular. payment of the balance has been submitted, which results in according In its rejoinder the Commission contends harsher treatment to a claimant who has that the contested circular does not indeed allowed the time-limit of 18 contain new rules which may be months to expire but who has duly kept contested but only an interpretation of accounts and submitted documentar»' the provisions in force. evidence for his request for payment but who has refrained from requesting payment of instalments than to a person

JUDGMENT OF 26. ä. 1982 — CASE 44/81

Even carry out a particularly detailed check or if it were necessary to consider that who encounter special difficulties by approval of the projects in question by reason of the special structure of the Commission did not give rise to national projects are placed at a disad- contractual liability on the pan of the vantage without any objective reasons in Community the intervener considers that relation to other persons who, by reason non-contractual liability to make the payments arises by virtue of the of particularly advantageous circum- Commission's approval and of the stances or of failure to take care over contents of the relevant regulations. details, submit requests for the payment of balances in good time. With regard to the time-limit of 18 months imposed by the Commission the The applicant finallv claims that there Irish Government considers that it has been a breach of the requirement to should not be applied. In this connection provide a statement of reasons. it relies upon the submissions concerning lack of powers, infringement of the aim and purpose of the Social Fund, the In its defence the Commission merely principle of legal certainty and the emphasizes that even on the supposition principle of proportionality which have made by the applicant that the contested already been made by the applicants.

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158/78 ([1979] ECR 1103) and to the following: J. Sedemund. for the opinion of Mr Advocate General Reischl applicants; E. P. Fitzsimons, Senior in Case 53/75 ([1975] ECR 1658 and Counsel, for the government of Ireland: 1659). and M. Hilf, a member of the Commission's Legal Department, for the Commission. V — Oral procedure At the sitting on 26 February 1982 oral The Advocate General delivered his argument was presented by the opinion at the sitting on 16 March 1982.

Decision

, Bv an application lodged at the Court Registry on 20 February 1981, the government of the Federal Republic of Germany and the Bundesanstalt fur \rbeit [Federal Labour Office] brought an action whose first head of claim is primarily for an order that the Commission should pay the sum of DM 16 928 855 5'' due under the Commission's decision of 23 December 1977 approving the grant of assistance from the Social Fund for four projets to be carried out bv the Bundesanstalt für Arbeit and, in the alternative, tor a declaration pursuant to the first paragraph of Anicie 173 of the EEC Treaty that the Commission's decision of 10 December 1980 refusmg payment of that sum is void.

• The second head of claim introduced by the government of the Federal Republic of Germany pursuant to the first paragraph of Article 173 of the EEC Treaty is for a declaration that the Commission's letter of 16 December 198C concerning the application of Article 4 of Commission Decision 78/7"<6/EEC of 27 Julv 1978 on certain administrative procedures tor the opération of the European Social Fund (Official Journal 1978, L 238, p. 20) is void.

6 It is true that in this area there is no provision in the Treaty entitling a person in favour of whom an institution has entered unilaterally into a financial commitment to bring before the Court an action for payment against that institution. That of itself does not mean that the person concerned has no remedy where that institution refuses to honour its commitments. Indeed, in so far as the institution, by refusing payment, disputes a prior commitment or denies its existence, it commits an act which in view of its legal effects may give rise to an action for a declaration of nullity under Article 173 of the Treaty. If as a result of the action the refusal to make the payment is declared void, the applicant's right will be established and it will be for the institution concerned, pursuant to Article 176 of the Treaty, to ensure that the payment which has been unlawfully refused is made. Moreover, if an institution fails to reply to a request for payment, the same result may be obtained by means of Article 175.

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7 It follows thai whilst the EEC Treaty makes no provision for an action of the type brought by the applicants, this cannot be regarded as a lacuna which must be filled in order to ensure that persons concerned have effective protection for their rights. The claim for payment made by the applicants must therefore be declared inadmissible.

2. The alternative claim for a declaration that the Commission's letter of ID December 1980 refusing the payments requested is void

(a) Admissibility

s For the reasons already stated by the Court in considering the principal head of claim, the refusal to make a payment is an act which may be the subject of an action for a declaration of nullity under Article 173 of the Treaty. However, the Commission maintains that this head of claim is also inadmissible since it is directed against a letter, namely that of 1C December 1980, which merely confirmed a decision which had been definitively adopted and notified to the applicants in July 198C.

12 It is clear from the circumstances described above that it was only by its letter of 10 December 1980 that the Commission reached an unequivocal and definitive decision on the request for payment which had been submitted to it. Consequently, that letter must be regarded not as confirmation of a prior act but as the act whereby the Commission notified its definitive decision concerning the payments requested in a form enabling its nature to be identified. The action for a declaration that the letter is void, which was lodged within the period prescribed by law, is therefore admissible.

(b) Substance

13 The applicants contest the view that Article 4 of Commission Decision 78/706 may be interpreted as laying down a preclusive period. They maintain, moreover, that if that were the case, by attaching such a legal effect to the period which it laid down the Commission would have exceeded the powers of implementation conferred upon it by Article 124 of the Treaty and Article 13 of Regulation (EEC) N o 2396/71 of the Council of 8 November 1971 (Official Journal, English Special Edition 1979 (III), p. 924), since the Council alone has such power by virtue of Article 127 of the Treaty.

14 The Commission's powers to lay down time-limits and penalties for failure to complv therewith must be determined in the light of the powers conferred upon the Council and the Commission by the Treaty and by the provisions adopted for the application thereof and in the light of the requirements of sound admims:-ition.

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,- It should be observed in that regard that neither in the provision itself nor in the rectal relating io the provision in the preamble to the decision is any indication given of the existence or the nature of penalties tor exceeding the period prescribed. The lack of any indication of the consequences of exceeding the period laid down by Artide 4 stands in contrast with the express and precise statement in Anicie 2 of the same decision concerning the effects attaching to another period, namely the period for the submission of applications for assistance, the consequence of exceeding which is that

JUDGMENT OF 26. 5. 1982 — CASE 44/81

'the application for assistance shall be deemed to have been withdrawn'. This contrast between the precision of Article 2 and the imprecision of Anicie 4 is all the more significant since the preclusive period provided for by Article 2 has far less serious consequences for the Member States, since its effect is merely that the application for approval is deemed to have been withdrawn at a stage at which ex hypothesi the Member State concerned has not yet incurred any expenditure.

is It follows that Article 4 of Commision Decision 78/706 cannot be regarded as laying down a time-limit failure to comply with which involves the loss by the State concerned of the right to the payment of the balance of the assistance approved. Consequently, the Commission's decision of 10 December 1980 refusing payments of assistance from the Social Fund amounting to DM 16 928 855.52 must be declared void, in so far as it is based on the fact that the requests were submitted after the expiry of the period laid down by Article 4 of Commission Decision 78/706.

THE COURT

hereby:

1. Declares void the Commission's decision of 10 December 1980 refusing to pay to the Federal Republic of Germany balances of assistance from the Social Fund amounting to DM 16 928 855.52;

2. Dismisses the remainder of the application;

3. Orders the parties to bear their own costs.

Menens de Wilmars Bosco Touffait