Nordsee Deutsche Hochseefischerei GmbH v Reederei Mond Hochseefischerei Nordstern AG & Co. KG and Reederei Friedrich Busse Hochseefischerei Nordstern AG & Co. KG (102/81)
law://eu/cjeu/1981/c-102-81/hd_1_1_2_2@2026-11-13law://eu/cjeu/1981/c-102-81/hd_1_1_2_2@2026-11-13The respondents in the arbitration submit that the wording and context of Regulations Nos 17/64 and 2722/72 indicate that the aid provided for in the Guidance Section is not aid for a general sector, granted without distinction to all the undertakings in a particular branch of economic activity. On the contran', the aid is granted only on a selective basis, with reference to specific individual investment projects which must satisfy precise conditions laid down in advance, both of substance and of form, and also of a technical nature. The aid is thus linked to a given project.Thus, both regulations provide expressly that aid is granted for a “given project” (cf. Articles 13, 14 and 18 of Regulation No 17/64 and Articles 12 and 13 of Regulation No 2722/72). Moreover, aid from the Fund is granted only on application (Article 20 of Regulation No 17/64; Article 14 of Regulation No 2722/72), more particularly to the beneficiaries who are responsible for the cost “of the project” (Article 22 (1) of Regulation No 17/64; Article 13 of Regulation No 2722/72).The specificity of the aid which is given is even more apparent in the decisions made by the Commission in the field: those decisions bear as their heading the name of the fishing vessel for which the aid is destined.The respondents maintain that aid has been deflected from its rightful purpose if even before it has been granted by the Commission the person who is to receive the aid undertakes to pass it on to other undertakings in respect of which the Commission has decided specifically not to give aid. Such action deprives selective aid of its inherent purpose. Moreover, it clearly alters the financial conditions on which the Commission bases its decision whether to grant aid, thus frustrating one of the essential criteria for the decision.The result is that under such conditions the project for which aid has been granted is not carried out as intended, and that amounts to an irregularity within the meaning of Regulation No 729/70.The concept of irregularity does not imply the existence of fraudulent intent. On the contrary, any infringement of Community law whatsoever amounts to an irregularity which precludes financing from Community funds (judgments of 7 February 1979: in Case 11/79, Netherlands v Commission, [1979] ECR 245; Joined Cases 15 and 16/76, France v Commission, [1979] ECR 321; and Case 18/76, Federal Republic of Germany v Commission, [1979] ECR 343).The respondents conclude their submissions by suggesting that the reply to the second question should be as follows:“Where the recipients of aid from the Guidance Section of the European Agricultural Guidance and Guarantee Fund agree, after applying for but before the grant of Community aid, that such aid will be shared among them on the basis of the total number of vessels of the same type, when no aid has been requested for some of them or such aid has been refused by the Commission, that amounts to an “irregularity” within the meaning of Regulations of the Council Nos 17/64, 729/70 and 2722/72. Where the Commission ascertains the existence of such irregularities it is entitled to take action > recover the whole or pan of the sur;.3 granted.”The Italian Government submits that a pooling agreement might result in Community aid's going to undertakings which do not satisfy the conditions laid down by the Community regulations. As a result the system of distributing aid within the Community might be undermined by such undertakings. The system was based on the idea that aid of that nature is granted in order to achieve certain specific ends at Community level; it is precisely for that reason that the Community provisions make the grant of such aid subject to appropriate conditions and requirements.The Commission points out that the parties' declared aim was to adjust, as between themselves, the effects of the various decisions granting aid and to use that aid not in accordance with the Commission's criteria but in terms of considerations peculiar to the parties.Such a practice conflicts with the Commission's exclusive power of decision and with the principle that aid is linked to the applications submitted. The terms of the applications require the aid to be used in each case wholly for the financing of the relevant project. The pooling contract, however, provided for the transfer to third parties of a portion, as yet undetermined, of the aid in order to assist projects not included in the application. The applications for aid were not amended, and the Commission adopted its decisions to grant aid in each case on that basis.The companies ought to have sought to achieve their aim of spreading available aid over a wider number of projects by means of a request to that effect to the Commission.Under Article 22 (2) of Regulation No 17/64 and Article 19(1) of Regulation No 2722/72 the Commission is empowered to take steps to recover the amounts transferred by way of adjustment between the parties.In conclusion the Commission suggests that the reply to the second question should be as follows:“It is incompatible with Community law on aid and, in particular, with Regulations Nos 17/64 and 2722/72 for recipients of aid from the Guidance Section of the European Agricultural Guidance and Guarantee Fund for projects of a similar nature (the construction of factory-ships for fishing) to agree after applying for Community aid but before such aid is granted that aid granted after the ships have been put into service and paid for will be shared (pooled) between them according to the total number of ships of the same type which they have had built and put into service, that is to say, including ships in respect of which no aid was granted but which are of a similar type. The Commission is entitled to take steps to recover pavments made by way of adjustment under such an agreement.”
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