C-256/97

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OPINION OF ADVOCATE GENERAL JACOBS delivered on 24 September 1998 *

1. In the present case the Tribunal de 4. Employers are required to deduct con- Commerce, Brussels, seeks a preliminary tributions payable by each worker from his ruling from the Court as to whether certain salary payments and to forward those facilities for the late payment of social contributions to the ONSS within the security contributions granted to an under- time-limits set by the King. 2 Employers taking by the State body charged with the who do not pay the contributions within collection of those contributions constitute those time-limits are liable to criminal and State aid within the meaning of Arti- in certain cases civil sanctions and must pay cle 92(1) of the Treaty and, if so, whether prescribed surcharges and interest for late the facilities granted in this case are com- payment. 3 It is accepted that the'ONSS has patible with the common market. a discretionary power to grant periods of grace to employers, although national law recognises that there must be limits to the exercise of that discretion.

10. In those circumstances the referring court considered that the facilities for late payment of social security contributions 7. Déménagements-Manutention Trans- might constitute unlawful State aid con- port ('DMT') is a removal firm which trary to Article 92(1) of the Treaty and appears to engage in some cross-border therefore referred the following questions trade. It appears that the main proceedings to this Court: arise out of a decision by the Tribunal de Commerce to investigate of its own motion the financial situation of DMT; the inves- tigating judge has referred the case to the Fourth Chamber of the Tribunal de Com- merce. That court has referred two ques- tions to this Court for a preliminary ruling. '1. Is Article 92 of the Treaty to be inter- preted as meaning that measures in the form of payment facilities granted by a public body such as the ONSS enabling a commercial company to retain over a period of at least eight years a propor- tion of the sums collected from staff 8. The facts and figures which led the and to use those sums in support of its investigating judge to take the view that commercial activities, when that under- DMT might be insolvent are not wholly taking is unable to obtain funding clear from the order for reference. It is under normal market conditions or to however apparent that the essential ele- increase its capital, are to be considered ment which led the national court to seek State aid within the meaning of that the guidance of this Court is its finding that article ? the ONSS had granted facilities to DMT for late payment of social security contri- butions over a number of years in circum- stances where DMT's liabilities, most of which comprised outstanding social secur- ity contributions, interest and surcharges, 2. If the first question is answered in the substantially exceeded its assets. affirmative, is Article 92 of the Treaty

14. There are two aspects of the case which appear to raise doubts as to the propriety of the reference: first, whether the main proceedings are of a judicial nature and, secondly, whether a decision on the ques- 11. Written observations have been sub- tions referred is necessary to enable the mitted by DMT, the French Government national court to give judgment. and the Commission. At the oral hearing, the Belgian, French and Spanish Govern- ments and the Commission were repre- sented. 15. As indicated above, the proceedings of the Tribunal de Commerce acting in its capacity as adjudicator of insolvency com- prise two stages: the investigation by the juge des enquêtes commerciales and, if appropriate, the continuation of the proce- 12. The facts as set out in the order for dure before the juge de l'audience if the reference were put in some doubt by the matter is referred to a chamber. There is observations made by the Belgian Govern- throughout only one party, the undertaking ment at the hearing. In particular, the being investigated, although the Procureur Belgian Government asserted that the main du Roi has a role akin to that of an amicus proceedings concerned only arrears of curiae. social security payments from June 1994, and that the extension of time had, until December 1996, been granted by judgment of the Tribunal de Commerce of September 1996 and not simply by the indulgence of 16. The fact that the proceedings are not the ONSS. It accepted however that DMT adversarial does not in itself prevent the had a history of difficulties with social conclusion that the Tribunal is competent security payments going back to 1986. to make a reference. 5As to the procedure generally, the Court has held that a court may refer a question 'only if there is a case pending before it and if it is called upon to give judgment in proceedings intended to lead to a decision of a judicial nature'. 6 The fact that the national procedure at 13. Notwithstanding the dispute as to the issue involves a purely investigative stage is facts, I consider that the Court can give a not a bar to a reference: the Court has ruling in general terms. It will of course be for the national court to satisfy itself that it has established the facts sufficiently to 5 — Case 162/73 Birra Dreher ν Amministrazione delle Finanze enable it to apply the Court's ruling to the dello Stato [19741 ECR 201. 6 — Case C-111/94 Job Centre [1995] ECR I-3361, paragraph 9 proceedings before it. of the judgment.

accepted a reference from a Pretore (magis- questions to this Court pursuant to Arti- trate) in Italy in a case in which the Pretore cle 177 of the Treaty. performed functions both of a public prosecutor and of an examining magistrate, carrying out preliminary investigations in his capacity as public prosecutor and, where those disclosed no grounds for continuing the proceedings, making an order accordingly in the place of the examining magistrate. 7 The Court ruled that it had jurisdiction to reply to a request for a preliminary ruling if that request 18. The second doubt concerning the pro- emanated from a court or tribunal which priety of the reference goes to whether a has acted in the general framework of its decision on the questions referred can be task of judging, independently and in regarded as necessary to enable the refer- accordance with the law, cases coming ring court to give judgment, as required by within the jurisdiction conferred on it by Article 177. Given the function of the law, even though certain functions of that referring court in the main proceedings, it court or tribunal in the proceedings which must be assumed that that court considers gave rise to the reference are not, strictly that a finding that the facilities for late speaking, of a judicial nature. 8 payment granted by the ONSS amount to unlawful State aid will affect its decision whether DMT is insolvent. If those facilities are State aid, the referring court presum- ably considers that DMT will have to meet 17. In the present case the Tribunal de its obligations to ONSS immediately and in Commerce is, pursuant to Article 442(1) of so doing will necessarily render itself insol- the Belgian Commercial Code, adjudicating vent. However, this is not clear from the on whether DMT is insolvent. The investi- order for reference. Nor is it clear that the gating juge des enquêtes commerciales outcome of the main proceedings genuinely appears to have referred the case to the turns on this point, since the findings of the Fourth Chamber of the Tribunal de Com- national court — albeit disputed by the merce and accordingly has no further role. Belgian Government — suggest that DMT The juge de l'audience, once seised by the is unable to meet its obligations in any investigating judge, is required to deliver a event. judgment declaring either that the under- taking is insolvent or that the conditions required for a finding of insolvency are not satisfied. The function being exercised by the Tribunal is accordingly judicial rather than administrative in nature. It is, in my view, therefore clear that the Tribunal de Commerce adjudicating in its capacity as an insolvency court is competent to refer 19. The Court has, however, consistently held that it is for the national court to 7 — Case 14/86 Pretore di Salò ν Persons Unknown [1987] ECR 2545. assess, having regard to the facts of the 8 — Paragraph 7 of the judgment. case, the need to obtain a preliminary

20. It is helpful to clarify at the outset the division of competence between national courts, the Commission and this Court in respect of State aid cases. 1 3 'The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter 9 — See, for example, Case 83/78 Pigs Marketing Board ν Redmond [1978] ECR 2347 and subsequent cases. aid. If it considers that any such plan is not 10 —Joined Cases 98/85, 162/85 and 258/85 Bertini v Regione compatible with the common market hav­ Lazio [1986] ECR 1885, paragraph 8 of the judgment. 11 — Case C-343/90 Lourenço Dias v Director da Alfândega do ing regard to Article 92, it shall without Porto [1992] ECR I-4673; Case C-428/93 Monin Auto- delay initiate the procedure provided for in mobiles [1994] ECR I-1707. 12 — Case 244/80 Foglia v Novello [1981] ECR 3045; Case paragraph 2. The Member State concerned 149/82 Robards v Insurance Officer [1983] ECR 171; shall not put its proposed measures into Case C-83/91 Meilicke v ADV/ORGA [1992] ECR I-4871. 13 — See generally, Case C-354/90 FNCE [1991] ECR I-5505; effect until this procedure has resulted in a and Case C-39/94 SFEl and Others [1996] ECR I-3547. final decision.'

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OPINION OF MR JACOBS — CASE C-256/97

25. However, proceedings may be com­ menced before national courts requiring those courts to interpret and apply the concept of aid contained in Article 92 in order to determine whether State aid intro­ Question 1 duced without observance of the prelimin­ ary examination procedure provided for in Article 93(3) ought to have been subject to 17 that procedure. In interpreting Article 92 it is open to a national court to consult with 18 27. In order to determine whether a prac­ the Commission; additionally, a national tice such as that allegedly followed by the ONSS in this case constitutes aid for the purposes of Article 92, it is helpful to 14 — FNCE, paragraph 8 of the judgment. 15 — Case 78/76 [1977] ECR 595. consider the various components of the 16 — Paragraphs 9 and 10 of the judgment. definition in Article 92(1). 17 — Paragraph 14 of the judgment. 18 — See the Commission Notice on Cooperation between national courts and the Commission in the State aid field, OJ 1995 C 312, p. 8. 19 — SFEI and Others, paragraph 40 of the judgment.

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29. Secondly, the State intervention must confer an advantage or benefit on the 22 — Case 30/59 Steenkolenmijnen ν High Authority [1961] recipient. ECR 1. The Court was considering the concept of 'aids granted by States' under Article 4 of the ECSC Treaty but the definition has been accepted in subsequent case-law as applying equally to the concept of 'aid granted by a Member State' under Article 92 of the EC Treaty. 20 — Joined Cases C-72/91 and C-73/91 Sloman Neptune ν 23 — Case C-301/87 [1990] ECR I-307. Bodo Ziesemer [1993] ECR 1-887, paragraph 19 of the 24 — Paragraph 41 of the judgment. See also Case 173/73 Italy ν judgment. Commission, cited in note 21, Case 203/82 Commission ν 21 —Case 173/73 Italy ν Commission [1974] ECR 709, Italy [1983] ECR 2525, and Case 52/83 Commission ν paragraph 16 of the judgment. France [1983] ECR 3707.

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OPINION OF MR JACOBS — CASE C-256/97

35. I agree with the French and Belgian Governments that the criterion of the private investor which has often been applied to decide whether the provision by the State of capital for an undertaking is a i d 2 7 is not appropriate in this case. However, as the Commission argues, both

25 — See also paragraph 9 of the Opinion of Advocate General La Pergola in Case C-342/96 Spain ν Commission [1999] ECR I-2459, delivered on 9 July 1998, which also concerned the discretionary extension of time for the payment of social security contributions. 26 — Subject to possible application of the de minimis rule: see 33. It is clear that in certain circumstances the Community guidelines on State aid for small and medium-sized enterprises (SMEs) adopted by the Commis­ continued and generous tolerance of late sion on 20 May 1992 (OJ 1992 C 213, p. 2), as amended payment of social security contributions by Commission notice on the de minimis rule for State aid (OJ 1996 C 68, p. 9), exempting in certain circumstances may confer an appreciable commercial aid of a de minimis level from prior notification to the Commission. advantage on the recipient undertaking 27 — See, for example, Case 234/84 Belgium ν Commission and in extreme cases be tantamount to [1986] ECR 2263.

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a private investor and a private creditor test able circumstances on the private market. If are essentially a private market test. It is, in so, those facilities are aid within the mean­ my view, useful to draw the closest com­ ing of Article 92(1). It may be noted that parison possible, which in this case would the first question put by the national court be with a private creditor and the terms seems to assume that the undertaking that creditor might offer to a customer- concerned is unable to obtain funding debtor finding itself in financial difficul­ under normal market conditions. ties. 2 8

39. Thirdly, aid will not fall within Arti­ 37. It will be for the referring court to cle 92(1) unless it favours certain under­ decide, on the basis of its assessment of the takings rather than being a general mea­ facts, whether the facilities granted for sure. The Belgian, French and Spanish payment of social security contributions, Governments submit that, where facilities taking into account their terms, are mani­ for the late payment of social security festly more generous than those which a contributions are granted on the same private creditor, protecting its commercial terms to any undertaking in certain objec­ interests, would have granted in compar­ tively defined circumstances, those facilities do not constitute aid within the meaning of 28 — See also paragraph 11 of the Opinion in Spain ν Article 92 since, being of a general nature, Commission, cited in note 25. they do not favour certain undertakings.

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OPINION OF MR JACOBS — CASE C-256/97

41. Finally, Article 92(1) renders unlawful aid 'which distorts or threatens to distort competition... in so far as it affects trade between Member States'.

Question 2

42. As the Commission submits, it seems clear that in the circumstances of the present case the measures, if found to 44. As explained above, it is the exclusive constitute aid, are capable of distorting or role of the Commission to decide, subject threatening to distort competition by 30 — Joined Cases C-278/92, C-279/92 and C-280/92 Spain ν Commission [1994] ECR I-4103, paragraph 42 of the 29 — Case C-241/94 France ν Commission [1996] ECR I-4551. judgment. See also paragraph 8 of the Opinion in Spain ν Commis­ 31 — Case 730/79 Philip Morris ν Commission [1980] ECR sion, cited in note 25. 2671, paragraph 11 of the judgment.

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to review by the Court, whether an aid is answer to the referring court's second compatible with the common market. It is question. therefore not for this Court to provide an