Madeira Free Zone: GC dismisses application for annulment
Today, the General Court (GC) rendered its judgment in joined Cases T-713/22 Portumo – Madeira and Others v Commission (Zone franche de Madère) and T-720/22 Nova Ship Invest v Commission (Zone franche de Madère).
The applicants sought the annulment of the Commission Decision of 4 December 2020 on the regional aid scheme SA.21259 concerning Madeira Free Zone III. The Commission considered that the Portuguese authorities had unlawfully put into effect the scheme that was incompatible with the internal market and ordered recovery.
The GC recalled the settled case-law whereby the Commission, when it intends to declare an aid compatible with the internal market, must ensure that such a declaration of compatibility does not lead to a breach of other provisions of EU law and in particular of the principles of freedom of movement. According to the GC, this cannot lead to the obligation to declare aid compatible with the internal market simply because the (lawful and appropriate) declaration of incompatibility would have restrictive effects on the undertakings receiving the aid, either by preventing the payment of the aid or by requiring its recovery. The prohibition of state aid is a legitimate restriction of the fundamental freedoms and, as an essential task conferred on the Union, of fundamental importance for the functioning of the internal market. Any other interpretation would undermine this prohibition.
For further information, see the GC’s judgment.
For another recent GC judgment, dealing with a preferential tax scheme in the free trade area of Madeira: see our PR here