Advocate General of the EU asks to review the calculation of aid to shipyards that Spain must recover

BRUSELAS, 29 Sep. (EUROPA PRESS) -

An Advocate General of the European Union has recommended this Thursday the review of the calculation method used by the European Commission to set the amount of illegal aid that Spain must recover from the advantages it granted to shipyard investments for several years and that Brussels declared illegal in 2013.

The conclusions of Advocate General Pritt Pikamäe have considered that in relation to the method of calculating the aid, the previous judgment of the General Court "suffers from a reasoning defect", for which he considers that "it must be partially annulled".

Thus, the Advocate General has proposed to the Court of Justice that it "partially annul the Commission's Decision" to recover the aid and, more specifically, "as regards the calculation of the amount of the aid".

The opinions of the general advocates are not binding for the European Court of Justice, although the vast majority of sentences handed down follow the line marked by these opinions.

In its conclusions, Pikamäe has indicated that the General Court "limited itself to finding that the fact that the shipping companies were not the beneficiaries of the aid was not disputed" and to confirm the decision of Brussels to recover the aid only from the investors.

The case dates back to 2013, when Brussels asked the Spanish authorities to recover the illegal aid granted to shipyards under this system between 2007 and 2011, after concluding that the aid regime violates EU rules on public aid because it granted a selective advantage to its beneficiaries with respect to its competitors.

The Community Executive then established that the subsidies should be returned by the investors who financed the construction of the ships, but not the shipowners or the shipyards themselves.

In 2013, Spain, Lico Leasing and Pequenos y Medianos Astilleros Sociedad de Reconversión filed an annulment appeal against the Commission's decision whereby the EU General Court, in a ruling in 2015, annulled the decision, which in turn was annulled by the Court of Justice of the European Union, in 2018, after an appeal.

The high European court pointed out in its ruling that the General Court had incurred "an error of law" by basing its analysis on the erroneous premise that investors, and not economic interest groups, were the beneficiaries of tax advantages.

Within this framework, the CJEU ordered a review of the judgment that endorsed the Spanish system of tax credits ('tax lease') for investors in shipyards.

In his conclusions, the Advocate General has pointed out that the method used by the General Court to assess the selective nature of the Spanish tax leasing system "was correct" and that the granting of these "tax advantages" depended on the companies previously obtaining "authorization to practice early amortization".

Thus, Pikamäe has indicated that the Tax Administration could determine the beneficiaries of this early repayment or its conditions.

In addition, it has added that the "mere establishment of an aid system that confers a discretionary power on the Tax Administration regarding the choice of beneficiaries and the conditions for granting the aid", such as this tax lease system, could allow Member States to "disguise" the existence of "indirect beneficiaries and thus prevent part or all of the aid from being recovered from them".