Gide Brussels, advisor of the French Federation of Recycling Companies (Federec)

The Brussels office of Gide advised the French Federation of Recycling Companies (Federec) in connection with the ruling of the Court of Justice of the European Union (CJEU), which confirms that the French system for the recycling and treatment of waste from clothing textile products, household linen and footwear (TLC products) does not constitute State aid.

In this case, the Conseil d’Etat (France) referred a question for preliminary ruling to the CJEU in order to determine whether has to be regarded as State aid:

• a system whereby a private, non-profit eco-body, approved by the public authorities, receives contributions from those who place on the market TLC products,
   
• who enter into a contract with it to that effect, in return for a service consisting in the organisation on their behalf of the treatment of the waste from those products,
   
• redistributes to operators responsible for the sorting and recovery of that waste, subsidies the amount of which is set out in the approval, in the light of environmental and social targets.

Thus, the question was essentially whether the funds that the eco-body uses to provide financial support to the sorting operators should be qualified as State resources.

The CJEU has clearly ruled out the existence of State aid for the following reasons:

The funds created by the payment of those contributions never pass through the State budget and the State has not relinquished any resources which should have been paid into the State budget.

The funds are not under constant public control as they are not subject to any particular requirement as to their deposit, and in the event of the discontinuance of activities of the eco-body, the amounts that might be available are not paid to the public authorities.

• The funds used by the eco-body are exclusively used for carrying out the tasks which have been legally assigned to it, which tends to show that the State is specifically not entitled to dispose of those funds, that it is say to decide on an allocation which differs from that laid down by law.
   
• Although the scale of financial support paid by the approved eco-body to sorting operators is set by the State, the eco-body determines the amount of the financial contribution collected from those placing products on the market, so as to cover, each year, the expenses resulting from the application of the standard terms.
   
• Even if a State representative, appointed by the State, attends the meetings of the board of directors of the eco-body and ensures that its financial capacities are maintained, he does not have a right to vote that would allow him to exert influence over the administration of the funds used by the eco-body.

With this ruling, the Court was thus able to clarify its case law on the concept of State resources, which is difficult to assess when, as in this case, voluntary contributions are collected by a private body approved by the State but legally required to pay them to sorting operators in accordance with a scale set by the State.

The Court’s reasoning in this case largely echoes its reasoning in the CVO case (judgment of 30 May 2013, C-677/11, Doux Elevage / Commission) in which

Gide Brussels (Benoit Le Bret and Corinne Rydzynski) assisted French agricultural interprofessional organisations.

The Gide team that advised Federec in the context of this litigation before the CJEU consisted of Laurent Godfroid, Benoit Le Bret, Diana Calciu and Manon Portier.