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166 LEVY FUNDING, STATE INFLUENCE & APPLICATION OF COMMUNITY LAW – DOWNIE 16[2006/2007]4 ULR

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undertakings or out of funds at the disposal of such entities; Conclusions
and (ii) in the case in which resources intended for the financing
of the aid measure, obtained via burdens imposed on private Applying the approach he had developed, the Advocate General
parties (for example, parafiscal contributions), is routed through considered the particular position of the surcharge
intermediary undertakings or organisations before being arrangements in issue in the present proceedings.
allocated to the recipients. In that context, he noted that, for the reference period,
As regards, first of all, category (i), the Advocate General that is, between 1 August and 31 December 2000, Essent’s
noted that, in terms of the court’s decision in Stardust, funds capital was controlled 100 per cent by Essent NV, whose capital
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at the disposal of a public undertaking must be regarded as was held as to 100 per cent by communes and provinces and
state resources when the state is in a position, by the exercise thus belonged completely to public authorities. Thus, Essent
of its dominant influence, to direct the use of its resources to was, for this period, a public undertaking. Accordingly, the
finance, if necessary, specific interventions in favour of other resources at the disposal of Essent had to be regarded in
undertakings. To that end, it was not necessary to demonstrate principle as public resources, irrespective of the fact that
that the state had transferred specific sums to these Essent’s role was confined only to the collection of the relevant
undertakings for the purpose of financing the aid measure. contributions. In addition, it was a relevant factor that SEP
Turning then to category (ii), the Advocate General was accountable to the Minister for the Economy for the sums
pointed out that, in line with established case law, it was resulting from surcharges in question and that they could only
unnecessary to distinguish between cases in which assistance be applied by SEP for specific purposes, namely to cover costs
is granted directly by the state and those in which it is granted generated by investments carried out at the instigation of the
by an intermediary organisation, public or private, designated public authorities. Finally, it was also a relevant factor that any
or established by the state. It was also necessary, in his opinion, excess in receipts above NLG 400 million were to be paid over
to follow the case law relating specifically to aid measures by SEP to the Minister.
financed through parafiscal charges or obligatory contributions. The Advocate General’s conclusion, therefore, was that
On the basis of this case law, funds provided by way of national legislation which provided for the revenue generated
obligatory contributions imposed by state legislation, managed from a transitional surcharge on electricity consumption tariffs,
and distributed in accordance with this legislation, ought to be collected by network operators, to be paid by them to a
regarded as state resources within the meaning of Article 87(1) company (which was the joint subsidiary of domestic electricity
EC, even if they are administered by institutions distinct from producers) which was required to retain part of such revenue
the public authorities. to cover stranded costs and to transfer any excess to the state
It was possible, in his view, to claim that this case law was could give rise to state aid within the meaning of Article 87(1) EC.
implicitly overruled by PreussenElektra, at least in the situation The judgment of the court is now awaited.
where the role played by the intermediary is limited to the
collection of the contribution or to accounting for the collected
funds without any discretion as to their use and allocation Comment
(which, from an economic standpoint, was the same as the While both of these cases concern different Community law
situation in which funding was transferred directly by the parties regimes, it is submitted that (assuming the court in Essent Noord
with the contribution obligation to the undertakings benefiting adopts the approach proposed by the Advocate General) they
from the measure). However, the Advocate General considered do demonstrate a striking similarity in approach. 16
that, where the intermediary is designated by the state, any In particular, in both cases the court appears to be
funds passing through it were, at least indirectly, under the emphasising what was described in Bayerische Rundfunk as a
control of the state. This would be the case in particular (a) ‘functional’ approach to the issue of levy funding. In other
where the intermediary is a public undertaking, and (b) where words, and regardless of the fact that all of the financial burden
obligatory contributions are paid into a fund, public or private, may fall upon individual customers, it is the function performed
established or conceived by the state with the aim of distributing by a levy funding scheme that is of paramount importance in
financial assistance in accordance with law. 15 determining whether it is or is not a form of state financing.
Thus, where a scheme is designed by the state to pursue
some public policy objective and is equipped by the state with
the coercive means to obtain the funding it requires, then it is
the state, and not those actually writing the cheques, which is
13 The concept of ‘public undertaking’, which arises in the EC Treaty to be regarded as financing the scheme.
itself, is elaborated by Commission Directive 80/723/EEC, relating to
the transparency of the financial relations between the Member States
and public undertakings. In terms of Article 2(1)(b) of the Directive, a
public undertaking, ‘means any undertaking over which the public
authorities may exercise directly or indirectly a dominant influence by
virtue of their ownership of it, their financial participation therein, or
the rules which govern it’. Article 2(2) of the Directive provides that, ‘A corresponding burden-sharing emanated from the commercial sector
dominant influence on the part of the public authorities shall be presumed concerned and not from the public authorities seemed to be a decisive
when these authorities, directly or indirectly in relation to an undertaking: factor in the decision of the court to exclude the possibility of the
(a) hold the major part of the undertaking’s subscribed capital; or (b) measure being imputed to the state.
control the majority of the votes attaching to shares issued by the 16 Interestingly, in his opinion in Bayerische Rundfunk, Advocate General
undertaking; or (c) can appoint more than half of the members of the Ruiz-Jarabo Colomer dismissed a suggested comparison of the public
undertaking’s administrative, managerial or supervisory body.’ procurement and state aid regimes as ‘audacious’ (see paragraphs 35 to
14 France v Commission, judgment of 16 May 2002, Case C-482/99. 37 of his opinion). However, that comparison was being proposed by
15 The Advocate General did not view the Pearle decision as presenting the German broadcasters in order that they might rely on the
an obstacle to this approach, since in that case the initiative to promote PreussenElektra decision. In that context, one can perhaps understand
the advertising campaign in question and the proposed method for the Advocate General’s reluctance to accept a comparative approach.
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