Court of Justice rules that national suspension rules must not delay recovery of unlawful State aid
The Court of Justice (CJEU) has rendered its judgment in the case C-545/24 (Ultileduci), concerning the recovery of unlawful State aid granted under the Madeira Free Zone regime. Following a Commission decision declaring the scheme incompatible with the internal market, Portugal initiated fiscal enforcement proceedings to recover the aid from a beneficiary company. Under Portuguese law, however, debtors can request suspension of enforcement proceedings if they provide a guarantee (such as a bank guarantee or mortgage), or in some cases even be exempted from providing such security. The referring court asked in a preliminary ruling whether EU law requires national authorities to disapply these procedural safeguards in order to ensure the “immediate and effective” recovery of unlawful aid that is incompatible with the internal market under Article 16(3) of Regulation 2015/1589.
The CJEU held that, while Member States retain procedural autonomy, this autonomy is strictly limited by the requirement that recovery of unlawful State aid that is incompatible with the internal market must be immediate and effective. National rules that systematically or automatically suspend recovery proceedings are incompatible with EU law and must be disapplied where necessary.
However, the Court also clarified that not all procedural guarantees are excluded: they are only problematic where they prevent the effective removal of the advantage conferred by the aid. Measures such as guarantees or instalment payments are generally insufficient if they do not actually neutralise the economic benefit, unless the aid amount is effectively immobilised (for example, in a blocked account or through equivalent measures).
For more information, see the CJEU’s judgment.