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force on 1 January 1988, imposed the 7. In the statement of reasons in the 1991 charges both on domestic and on imported decision the Commission observed briefly and exported animals. that the Belgian authorities had not fulfilled their obligations under Article 88(3) EC because they had not notified the proposal to grant the aid. 5It further noted that, although the aid measures financed under the regime were compatible with the com- mon market as regards both their form and their objectives, they could not be approved because 'the financing of the aid by para- fiscal charges which are also levied on imported Community products has a pro- tective effect which goes beyond aid 5. Neither the 1987 regime nor most of the properly so-called'. 6Finally, the Commis- amendments subsequently made to it were sion observed that 'such compulsory con- notified to the Commission. 3 tributions levied on imported animals at the slaughter stage should be considered as discriminatory internal taxes within the meaning of [Article 90 EC] as they benefit national producers alone'. 7

Justice. In Lornoya 8 and Demoor, 9 the 11. The Law of 23 March 1998 ('the 1998 Court of Justice held that the 1987 regime Law') creates a new regime ('the 1998 contravened either Article 25 or 90 EC regime') to replace the 1987 regime. That depending on whether the advantages law abolishes the old fund and system of accruing from it to domestic products charges and establishes a new 'budgetary wholly, or only partly, offset the burden fund for the health and quality of animals borne by the latter. With respect to the and animal products' and a new system of State aid rules, it concluded that 'a para- charges. Pursuant to Article 4, the pre- fiscal charge of the kind at issue in the main financing and financing of expenditure proceedings may, depending on how the under the 1987 Law may be charged to revenue from it is used, constitute State aid the new fund. Articles 14, 15 and 16 incompatible with the common market if respectively p r o v i d e for c o m p u l s o r y the conditions for the application of charges to be imposed on cattle and pig [Article 87 EC] are met...'. slaughterhouses and exporters, persons in charge of pig farms and dairy farms and those authorised to sell dairy products. Some of those charges are retroactive to 1 January 1988. According to the new system the charges are payable only on domestic animals. Imported animals arc no longer subject to charges whereas exported animals were subject to charges only until 9. The Belgian Government enacted the 1 January 1997. Law of 21 December 1994, which provided for the reimbursement, subject to certain conditions, of the charges levied, as from 1 January 1988, on imported animals.

16. The 1998 Law has been challenged before the Arbitragehof, a court which reviews the constitutionality of legislation 14. From the travaux préparatoires it is in Belgium. That court, called on to deter- clear that the aim of that retroactive effect mine whether the 1998 Law was in breach was to avoid repayment of the charges of inter alia Articles 87 and 88 EC and of levied on the basis of the 1987 regime as the principle of non-retroactivity, observed that would allegedly have prejudiced the that retroactive charges may be justified financial stability of the system. when it is necessary to pursue an objective of general interest, such as the performance or the continuity of a public service. It seems, however, that it left it to the ordinary courts to assess whether Article 88(3) EC had been breached.

ing repayment of charges they had paid on powers, independence of the judiciary, animals, some of them exported from good administration or the right to prop- Belgium, on the basis of the 1987 regime. erty. They claimed that those charges had been unlawfully collected since they were incom- patible with inter alia Articles 12, 95 and 93(3) of the EC Treaty (now Articles 25, 90 and 88(3) EC). On 16 May and 19 November 1997, the two national 19. It none the less has doubts about the courts found in favour of the applicants compatibility of the 1998 Law, and in and ordered the Belgian State to repay the particular its retroactive effect, with sums at issue. The State, however, appealed Article 88(3) EC. It has therefore referred against both judgments to the Hof van the following questions in the second of the Beroep (Court of Appeal), Antwerp. two joined cases, C-262/01, and the same questions, with the omission of question 2, in the first case, C-261/01:

5. If the answer to question 4 is in the negative, does Article 230 EC then permit the persons owing the contribu- — because of the activities described tions, as the beneficiaries of the aid, to in those articles which took place raise a plea of lack of competence with in the period from 1988 until regard to the Commission's act 21 May 1996 in which those aid whereby authorisation was given to measures had not yet been implement the aid measures from approved? which they benefit?

6. If it is accepted that the [applicants], as persons owing the contributions and/or as beneficiaries of the aid, are directly and individually concerned by the 2. Has the Commission, by approving the Commission's decision and may there- aid measures established by the Law of fore lawfully raise a plea of lack of 23 March 1998, also approved the competence, has the Commission retroactive effect of that law? exceeded the limits of its competence in adopting its decision of 30 July 1996 and infringed Article 93(3) of the EC Treaty (now Article 88(3) EC)?'

3. Is the Commission Decision of 30 July 20. Written observations were submitted 1996 merely in the nature of an by Belgium, the applicants, the Netherlands individual authorisation to a Member and the Commission, which were also, with State to implement the planned aid the exception of the Netherlands, repre- measures? sented at the hearing.

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2 1 . The Commission has also replied in 24. By its first question the referring court- writing to a question put by the Court asks about the compatibility of that mech- concerning the compatibility with the EC anism with Article 88(3) EC. Doubts are in Treaty of the charges imposed on animals particular raised by the imposition of com- exported to other Member States. pulsory charges with respect to activities which took place before the Commission declared that it had no objection to the 1998 aid regime.

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26. Further, as the Court has held, 'the Community law requires the repayment of Commission's final decision does not have charges levied to finance aid which has not the effect of regularising ex post facto the been notified to, and authorised by, the implementing measures which were invalid Commission. because they had been taken in breach of the prohibition laid down by the last sentence of Article [88(3) EC], since other- wise the direct effect of that prohibition would be impaired and the interests of individuals, which, as stated above, are to be protected by national courts, would be disregarded. Any other interpretation would have the effect of according a 29. It is not clear from the case-law of the favourable .outcome to the non-observance Court what effect the State aid rules have by the Member State concerned of the last on charges specifically levied to finance aid sentence of Article [88(3) EC] and would illegally granted before the aid is auth- deprive that provision of its effective- orised. The decisions of the Court offer ness'. 11 contradictory indications, sometimes even within the same judgment. 12

3 1 . In Compagnie Commerciale de pointed out above, namely that the charges l'Ouest 16 the Court seemed to distinguish themselves might constitute aid. 21 between the levying of the parafiscal charge and the use to which the revenue from it was put: 'the parafiscal charge at issue is governed either by [Articles 25 EC] or by [Article 90 EC]. The use to which the revenue from it is put may... constitute a State aid incompatible with the common market if the conditions for the application of [Article 87 EC? are met...' 17 The final paragraph of that section of the judgment contains a slight variation whereby 'A parafiscal charge like the one at issue in this case may, depending on how the revenue from it is used, constitute State aid incompatible with the common market if the conditions for the application of [Article 87 EC] are met'. 18 33. The Lornoy and Demoor judgments, which concerned the system of charges established by the 1987 regime, repeat almost verbatim the relevant statements of the Court in Compagnie Commerciale de l'Ouest. 22 The very final paragraph in both judgments reproduces the variation found in Compagnie Commerciale de l'Ouest, stating that the parafiscal charge may, depending on how the revenue from it is used, constitute State aid. Moreover, after recognising that that assessment should be a matter for the Commission according to the procedure laid clown in Article 88(3) 32. The Sanders 19 and CELBI 20 judgments EC, the Court adds: 'in that respect, regard followed the same line as Compagnie must also be had to the jurisdiction of the Commerciale de l'Ouest, although they national courts where, introducing the did not present the variation that has been charge, the Member State concerned failed to comply with its obligations under [Article 88(3) EC], and where a Commis- 16 — Joined Cases C-78/90 to C-83/90 Compagnie Commer- sion decision under [Article 88(2) EC] has ciale de l'Ouest and Others [1992] ECR I-1847. found the levying of the charge as a method 17 — Paragraph 32 of the judgment. of financing State aid to be incompatible 18 — Paragraph 35 of the judgment (emphasis added). Advocate General Tesauro emphasised that 'the present case is concerned with a parafiscal charge and not aid provided by the AEE? the public body concerned? from the revenue from that charge. And even if the aid was found to have 21 — - Sanders, paragraphs 24 and 27 of the judgment where been improperly paid, that would have no impact on the the Court alternatively refers to the 'reimbursement' of legality of the charge as such; it would continue to be the parafiscal charge or the 'use' to which the revenue is payable and those paying it could not claim reimburse- put; CELUI, paragraphs 21 and 24, mentioning the 'use' ment of it in legal proceedings'. to which the revenue is put. 19 — Joined Cases C-149/91 and C-150/91 Sanders Adaur and Guyomarch Orthez [1992] LCR I-3899. 22 Lornoy, cited in note 8' paragraph 28 of the judgment,Demoor. 20 — Case C-266/91 CELBI [1993] ECR I-4337. cited in note 9,paragraph 24.CF also Case CM 14/91 Claeys [1992] ECR I-6559, paragraph 2 1 .

23 — Emphasis added. A significant part of the Opinion of Advocate General Tesauro in those cases is devoted to the analysis of the issue under examination. Reconsidering his conclusion in Compagnie Commerciale de l'Ouest, he now argued that charges financing an aid should be subject to the State aid rules and to the assessment of the Commission and, where levied illegally, should be recovered. 24— Case C-72/92 Herbert Scharbatke[1993] ECR I-5509, where, after repeating the distinction between the para- fiscal charge and the use of the revenue from it (paragraph 18 of the judgment), the Court concluded that what may constitute a State aid, depending on how the revenue from it is used, is the collection of the parafiscal charge (paragraph 20). 25 — Case C-234/99 Nygård [2002] ECR I-3657. The Court used without apparent distinction the expressions 'charge forming part of an aid scheme' (paragraphs 52, 56, 57 and 64 of the judgment) or 'charge intended to finance an aid scheme' (paragraphs 60 and 65 of the judgment). 26 — In my Opinion of 30 April 2002 in Case C-126/01 G E M O I took the view, as regards the validity of measures giving effect to an illegal aid, that it was in principle for national law to determine which national measures were affected and what consequences that invalidity had, for example, for the refund of charges collected on the basis of the measures concerned. In that case, however, the substan- tive issue referred to the Court was limited to whether the 35. That ruling still seems in principle tax in issue formed part of an arrangement which might be regarded as an aid. The question of reimbursement of the correct. In my view, national provisions tax was not referred, and arose only on the admissibility introducing charges specifically levied for of the reference. France objected to the admissibility of the reference on the ground that, even if the scheme in issue the purpose of financing aid fall within were an aid, the referring court could at most order the recovery of the aid, but could not order the repayment of those 'measures giving effect to the aid' the the tax levied to finance the aid. To meet that objection, it legality of which must, in accordance with was sufficient to point out that a national court could indeed order the repayment of the tax; it was not necessary to consider whether and under what conditions Community law might impose a requirement for the tax to be reimbursed. The correct position seems to be that, 28 — Paragraph 12 of the judgment (emphasis added). In my under certain conditions, there is such a requirement; Opinion in that case, I took the view that where an illegal where those conditions are not fulfilled, the matter is one system of aid is financed by charges imposed on under- for national law. takings, the national courts may be required to order that those charges be refunded; see paragraph 2 7 of the 2 7 — Cited in note 11 Opinion.

29 — See the Opinion of Advocate General Warner in Case 177/78 Mc Carren [1979] ECR2161, p. 2204 30 — CaseC-453/99[2001] ECR I-6297.

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The full effectiveness of [Article 81 EC] 40. Further, the recovery of charges financ- and, in particular, the practical effect of the ing an aid scheme is particularly important prohibition laid down in [Article 81(1) EC] if the charges may themselves create dis- would be put at risk if it were not open to tortions of competition and trade which any individual to claim damages for loss would add to and reinforce the distortion caused to him by a contract or by conduct produced by the aid itself. That may occur liable to restrict or distort competition. if they are imposed on competitors of the beneficiaries of the aid or if the charges are such as to produce a protective effect and give some form of advantage to the domestic market.

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orised the retroactive imposition of the Second question charges.

44. By its second question the referring 42. It may finally be pointed out that the court enquires whether the 1996 decision fact that charges are described as a means of the Commission approved the retro- of financing State aid, and may thus be active effect of the 1998 regime. The subject to the o b l i g a t i o n s under question concerns the introduction by the Article 88(3) EC, does not exempt them 1998 regime of a new system of charges, from the application of Articles 25 and 90 applicable retroactively with effect from EC. 32 Since however the referring court 1 January 1988. The referring court seems has not posed any question in that regard to suggest that the Commission, in auth- and since the case-law of the Court offers orising the new aid regime, thereby clear guidance on the application of those accepted that the method of financing that provisions 33 I do not consider it necessary regime was compatible with the common to examine them further. market. That view is shared also by Bel- gium and - it seems - by the Netherlands.

48. The reading I suggest is consistent with the different roles of the Commission and national courts. Whereas it is for the Commission alone to decide on the com- patibility of State aid, it is for the national courts to guarantee respect of the obli- 51. By its third question the referring court gation of non-implementation in the last asks whether the decision of the Commis- sentence of Article 88(3) EC and to draw sion merely authorises the Belgian Govern- all necessary inferences 'as regards the ment to implement the 1998 regime. The validity of measures giving effect to the fourth then focuses on whether those liable aid, the recovery of financial support to pay the charges are directly and individ- granted in disregard of that provision and ually concerned by that decision. The fifth possible interim measures'. 34 question is put only if the answer to the fourth question is negative. In that event the referring court asks whether those liable to pay the charges may challenge the Commission's decision in their different capacity as beneficiaries of the 1998 regime. These three questions should be read together as they all concern the issue 49. I would therefore answer the second whether, and if so under what conditions, question in the negative. those liable to pay charges financing an aid scheme may challenge before a national court a decision of the Commission auth- 34 — FNCE, paragraph 12 of the judgment. orising that scheme.

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53. However, the possibility of challenging a Community act indirectly by that latter route, which is at issue in this case, is not 55. A person is directly concerned by a unconditional. In the TWD case 35 the decision of the Commission if that decision Court confirmed the principle that when a directly affects his legal situation and if its natural or legal person has failed to exer- implementation is purely automatic and cise under Article 230 EC, within the results from Community rules alone with- applicable time-limit, its right to challenge out the application of other intermediate a decision addressed to it or of direct and rules. 38 It could however be suggested that individual concern to it, the validity of the the Commission's decision in the present decision may not be called in question in case is a mere authorisation to the Belgian proceedings before the national courts. Government to implement the aid scheme. However, that principle applies only where If that is the case, the applicants would be the standing of a person to challenge the directly concerned only by the national decision directly under Article 230 EC is implementing measures. clear beyond doubt. 36 In my Opinion in the 37 — Paragraph 26 of the Opinion; see also my Opinion in Case C-239/99 Nach: Europe [2001] ECR I-1197, paragraphs 35 — TWD Textilwerke, cited in note 2· paragraph 17 of the judgement. 75 to 77. 36 — TWD, paragraph 24 of the judgment; see also Case 38 — Case T-9/98 Mitteldeutsche Erdöl-Raffmeriev Commis- C-178/95 Wiljo [1997] ECR I-585, paragraphs 19 to 21. sion [2001] ECR II-3367, paragraph 47 of the judgment.

56. The situation would however be dif- to be that the Commission took account of ferent if there was no real likelihood that the financing side of the system only inci- the Belgian Government would not adopt dentally, in order to evaluate its effects on the plan and there could be no doubt as to the aid regime. its intention to implement it. 39 Some elements in this case would support that conclusion. It clearly emerges from the file that the proposed 1998 regime was intended to rectify the illegality of the previous regime which had been in force since 1987. It therefore substantially repro- duced it and, most importantly, in doing so it secured to the system, through the retro- active mechanism described above, the revenue from part of the charges levied in the past. In those circumstances it could therefore be argued that the Commission 58. Furthermore, it is difficult to determine decision did leave intact the effects of the whether the applicants are individually 1987 regime and hence the applicants were concerned, even if the decision were held directly concerned. 40 to have authorised the system of charges and their retroactive effect. That system applies in a general way to many operators performing various activities with respect to different types of animals. The case-law which establishes individual concern by reference to the fact that the applicants in question are part of a 'closed class', that their number or identity is fixed and ascertainable at the time of adoption of the decision at issue, or that the decision 57. If however we consider the position of provided for a retroactive effect, is by no the applicants as persons liable to pay the means clear. 41 Thus arguments seeking to charges at issue, it is less clear that they are establish that the applicants represented a directly concerned, in particular because closed class on the ground that they had the scope of the decision is not unambigu- already instituted legal proceedings for the ous. I have taken the view above that the recovery of the charges paid on the basis of Commission did not authorise the system the 1987 regime before the proposed Law of charges and their retroactive effect, of 1998 was notified to the Commission, or which would constitute the part of the that, in any event, the retroactivity of the decision of concern to the applicants. The provisions at issue would make them, and most natural reading of the decision seems perhaps more generally those liable to pay the retroactive charges, part of a closed 39 — Case 11/82 Piraiki-Patraiki [1985] ECR 207, paragraphs 8 to 10 of the judgment. 40 — Case 169/84 Cofaz v Commission [1986] ECR 391, 41 — See, for instance, Joined Cases 106/63 and 107/63 Töpfer paragraph 30 of the judgment; Joined Cases T-447/93, [1965] ECR 405, at pp. 411 to 412; Case 62/70 Bock T-448/93 and T-449/93 AITEC v Commission [1995] [1971] ECR 897, at pp. 903 to 904: Piraiki-Patraiki, cited ECR II-1971, paragraph 41; Case T-149/95 Ducros v in note 39, paragraph 19 of the judgment; Case C-244/88 Commission [1997] ECR II-2031, paragraph 32; Case Usines cooperatives de déshydratation du Vexin [1989] C-6/92 Federmineraria [1993] ECR I-63S7, paragraph ECR I-3811, paragraphs 11 to 14: Case C-229/88 Cargill 15. [1990] ECR I-1303, paragraphs 13 to 18.

61. Clearly, the assumption underlying that question is that the Commission did in fact 42 — Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article authorise the system of charges and the [88 EC], OJ 1999 L 83, p. 1. retroactive effect in the imposition of part 43 — See Article 11(2) on the power to issue interim recovery of them. I have explained above, however, injunctions and, in particular. Article 14(1) which reads: 'where negative decisions are taken in cases of unlawful why I do not consider that the decision at aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the issue authorised them. aid from the beneficiary...' (emphasis added).

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Conclusion

64. I therefore consider that the questions referred by the Hof van Beroep, Antwerp, should be answered as follows:

(1) Where a tax or charge is levied specifically for the purpose of financing an aid, and the aid is illegal for lack of notification to the Commission pursuant to Article 88(3) EC, national courts must order reimbursement of the amounts levied. That is so even where a Member State introduces new legislation, notified to the Commission, in which the Member State purports to ratify retrospectively the imposition of the tax or charge.