Court of Justice of the European Communities (including Court of First Instance Decisions)

Provisional text

JUDGMENT OF THE COURT (Fifth Chamber)

27 January 2022 (*)

(Reference for a preliminary ruling – Structural Funds – European Regional Development Fund (ERDF) – Regulation (EU) No 1303/2013 – Co-financing programme – State aid – Regulation (EU) No 651/2014 – Scope – Limits – Concepts of ‘subscribed share capital’ and ‘undertaking in difficulty’ – Exclusion of undertakings in difficulty from ERDF support – Conditions for the taking effect of an increase of the subscribed share capital – Date of submission of evidence of that increase – Principles of non-discrimination and transparency)

In Case C‑347/20,

REQUEST for a preliminary ruling under Article 267 TFEU from the Administratīvā rajona tiesa (District Administrative Court, Latvia), made by decision of 15 July 2020, received at the Court on 28 July 2020, in the proceedings

SIA ‘Zinātnes parks’

v

Finanšu ministrija,

THE COURT (Fifth Chamber),

composed of E. Regan (Rapporteur), President of the Chamber, C. Lycourgos, President of the Fourth Chamber, I. Jarukaitis, M. Ilešič and A. Kumin, Judges,

Advocate General: J. Kokott,

Registrar: C. Di Bella, Administrator,

having regard to the written procedure and further to the hearing on 14 July 2021,

after considering the observations submitted on behalf of:

–        SIA ‘Zinātnes parks’, by I. Duka, advokāte,

–        the Latvian Government, initially by K. Pommere and V. Soņeca, and subsequently by K. Pommere and J. Davidoviča, acting as Agents,

–        Ireland, by M. Browne, J. Quaney, M. Lane and A. Joyce, acting as Agents, and by D. Fennelly, Barrister-at-Law,

–        the European Commission, by A. Bouchagiar, J. Hradil and L. Ozola, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 9 September 2021,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Article 125(3)(a)(ii) of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ 2013 L 347, p. 320), as well as Article 2(18)(a) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 187, p. 1).

2        The request has been made in proceedings between SIA ‘Zinātnes parks’ and the Finanšu ministrija (Ministry of Finance, Latvia), concerning a decision of the latter of 4 November 2019 rejecting Zinātnes parks’ project application in the context of a programme co-financed by the European Regional Development Fund (ERDF) (‘the rejection decision’).

 Legal context

 EU law

 Regulation (EU) No 1301/2013

3        Recital 1 of Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ 2013 L 347, p. 289) states:

‘Article 176 [TFEU] provides that the [ERDF] is intended to help to redress the main regional imbalances in the Union. …’

4        Article 3 of that regulation, entitled ‘Scope of support from the ERDF’, provides in paragraph 3 thereof:

‘The ERDF shall not support:

…

(d)      undertakings in difficulty, as defined under Union State aid rules;

…’

 Regulation No 1303/2013

5        Regulation No 1303/2013 lays down common rules and general provisions applicable to the ERDF, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund, together referred to as the European Structural and Investment Funds (‘the ESI Funds’).

6        In accordance with Article 4(7) of that regulation, in principle, the part of the budget of the Union allocated to the ESI Funds is to be implemented within the framework of shared management between the Member States and the Commission.

7        Article 26(1) and (2) of that regulation is worded as follows:

‘1.      The ESI Funds shall be implemented through programmes in accordance with the Partnership Agreement. Each programme shall cover the period from 1 January 2014 to 31 December 2020.

2.      Programmes shall be drawn up by Member States or any authority designated by them, in cooperation with the partners referred to in Article 5. Member States shall draw up the programmes based on procedures that are transparent for the public, in accordance with their institutional and legal framework.’

8        Article 123 of that regulation requires each Member State to designate, for each operational programme, a managing authority, a certifying authority and an audit authority.

9        Article 125 of Regulation No 1303/2013 defines the functions of the managing authority. Pursuant to paragraph 1 of that article, that authority is responsible for managing the operational programme in accordance with the principle of sound financial management.

10      As regards the selection of operations, Article 125(3) of that regulation provides that that authority is to:

‘(a)      draw up and, once approved, apply appropriate selection procedures and criteria that:

(i)      ensure the contribution of operations to the achievement of the specific objectives and results of the relevant priority;

(ii)      are non-discriminatory and transparent;

(iii)      take into account the general principles set out in Articles 7 and 8;

…

(d)      satisfy itself that the beneficiary has the administrative, financial and operational capacity to fulfil the conditions referred to in point (c) before approval of the operation;

…’

 Regulation No 651/2014

11      Recital 14 of Regulation No 651/2014 states:

‘Aid granted to undertakings in difficulty should be excluded from the scope of this Regulation, since such aid should be assessed under the Community guidelines on State aid for rescuing and restructuring firms in difficulty of 1 October 2004 [(OJ 2004 C 244, p. 2)] as prolonged by Commission communication concerning the prolongation of the application of the Community guidelines on State aid for rescuing and restructuring firms in difficulty of 1 October 2004 [(OJ 2012 C 296, p. 3)] or their successor Guidelines, in order to avoid their circumvention, with the exception of aid schemes to make good the damage caused by certain natural disasters. In order to provide legal certainty, it is appropriate to establish clear criteria that do not require an assessment of all the particularities of the situation of an undertaking to determine whether an undertaking is considered to be in difficulty for the purposes of this Regulation.’

12      Article 1 of that regulation, entitled ‘Scope’, provides in paragraph 4 thereof:

‘This Regulation shall not apply to:

…

(c)      aid to undertakings in difficulty, with the exception of aid schemes to make good the damage caused by certain natural disasters.’

13      Article 2 of that regulation, entitled ‘Definitions’, is worded as follows:

‘For the purposes of this Regulation the following definitions shall apply:

…

(18)      “undertaking in difficulty” means an undertaking in respect of which at least one of the following circumstances occurs:

(a)      In the case of a limited liability company …, where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, “limited liability company” refers in particular to the types of company mentioned in Annex I [to] Directive 2013/34/EU [of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ 2013 L 182, p. 19)] and “share capital” includes, where relevant, any share premium.

…

(c)      Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors.

…’

 Directive (EU) 2017/1132

14      According to recitals 7 and 8 of Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (OJ 2017 L 169, p. 46):

‘(7)      The coordination of national provisions concerning disclosure, the validity of obligations entered into by, and the nullity of, companies limited by shares or otherwise having limited liability, is of special importance, particularly for the purpose of protecting the interests of third parties.

(8)      The basic documents of a company should be disclosed in order for third parties to be able to ascertain their contents and other information concerning the company, especially particulars of the persons who are authorised to bind the company.’

15      Article 4 of that directive, entitled ‘Compulsory information to be provided in the statutes or instruments of incorporation or separate documents’, provides:

‘The following information at least shall appear in either the statutes or the instrument of incorporation or a separate document published in accordance with the procedure laid down in the laws of each Member State in accordance with Article 16:

…

(b)      the nominal value of the shares subscribed and, at least once a year, the number thereof;

…

(g)      the amount of the subscribed capital paid up at the time the company is incorporated or is authorised to commence business’.

16      Article 14 of that directive, entitled ‘Documents and particulars to be disclosed by companies’, provides:

‘Member States shall take the measures required to ensure compulsory disclosure by companies of at least the following documents and particulars:

(a)      the instrument of constitution, and the statutes if they are contained in a separate instrument;

(b)      any amendments to the instruments referred to in point (a), including any extension of the duration of the company;

…

(e)      at least once a year, the amount of the capital subscribed, where the instrument of constitution or the statutes mention an authorised capital, unless any increase in the capital subscribed necessitates an amendment of the statutes;

…’

17      Article 16 of Directive 2017/1132, entitled ‘Disclosure in the register’, provides in paragraphs 3 and 5 to 7 thereof:

‘3.      All documents and particulars which are required to be disclosed pursuant to Article 14 shall be kept in the file, or entered in the register; the subject matter of the entries in the register shall in every case appear in the file.

…

5.      Disclosure of the documents and particulars referred to in paragraph 3 shall be effected by publication in the national gazette designated for that purpose by the Member State, either of the full text or of a partial text, or by means of a reference to the document which has been deposited in the file or entered in the register. The national gazette designated for that purpose may be kept in electronic form.

…

6.      The documents and particulars may be relied on by the company as against third parties only after they have been disclosed in accordance with paragraph 5, unless the company proves that the third parties had knowledge thereof.

However, with regard to transactions taking place before the sixteenth day following the disclosure, the documents and particulars shall not be relied on as against third parties who prove that it was impossible for them to have had knowledge thereof.

7.      Member States shall take the necessary measures to avoid any discrepancy between what is disclosed in accordance with paragraph 5 and what appears in the register or file.

However, in cases of discrepancy, the text disclosed in accordance with paragraph 5 may not be relied on as against third parties; such third parties may nevertheless rely thereon, unless the company proves that they had knowledge of the texts deposited in the file or entered in the register.

Third parties may, moreover, always rely on any documents and particulars in respect of which the disclosure formalities have not yet been completed, save where non-disclosure causes them not to have effect.’

18      According to Annex II to that directive, the relevant types of companies for Latvia include, inter alia, the sabiedrība ar ierobežotu atbildību (limited liability company) which is the legal form of the applicant in the main proceedings.

 Latvian law

 The Law on the Management of the Funds

19      The implementation of EU funds in Latvia is governed by the Eiropas Savienības struktūrfondu un Kohēzijas fonda 2014.-2020. gada plānošanas perioda vadības likums (Law on the Management of the European Union Structural Funds and Cohesion Fund for the 2014-2020 Programming Period) (‘Law on the Management of the Funds’). Article 21 of that law, entitled ‘Selection of project applications’, provides as follows:

‘(1)      Procedures for the selection of project applications shall be:

1)      open, where project applicants compete on equal terms for their project applications to be approved and to be granted funding from a European Union fund; …

…

(2)      The liaison authority shall select project applications in accordance with the methods for selecting project applications and the regulations on the selection of project applications. The regulations on the selection of project applications shall be drawn up by the liaison authority and approved by it in conjunction with the responsible authority and the managing authority.

…

(5)      Project applicants shall prepare and submit their project applications in accordance with the requirements of the regulations on the selection of project applications.

…’

20      Article 25 of the Law on the Management of the Funds, entitled ‘Approval, conditional approval or rejection of project applications under open procedures for the selection of projects’, provides in paragraphs 3 and 4 thereof:

‘(3)      A decision to reject a project application shall be made where at least one of the following situations arises:

…

2)      The project application does not satisfy the evaluation criteria, and correction of the defects in accordance with paragraph 4 of this article would affect the substance of the project application.

…

(4)      A decision to grant a project application conditional approval shall be made where the project applicant must take certain actions specified by the liaison authority in order for the project application to satisfy the evaluation criteria in full and for the project to be implemented properly. The decision shall set out the relevant conditions, and compliance with those conditions shall be verified having regard to the regulations on the selection of project applications. If any of the conditions set out in that decision is not satisfied, or is not satisfied within the deadline laid down in the decision, the project application shall be deemed to have been rejected.’

21      Article 30 of that law, entitled ‘Clarification of project applications’, provides:

‘During the period between the submission of a project application and the decision to approve it, to grant conditional approval or to reject it, no further clarification of the project application may be submitted.’

 The Implementing Decree

22      The aid measure at issue in the main proceedings is governed by Ministru kabineta noteikumi Nr. 612 ‘Darbības programmas “Izaugsme un nodarbinātība” 3.1.1. specifiskā atbalsta mērķa “Sekmēt MVK izveidi un attīstību, īpaši apstrādes rūpniecībā un RIS3 prioritārajās nozarēs” 3.1.1.5. pasākuma “Atbalsts ieguldījumiem ražošanas telpu un infrastruktūras izveidei vai rekonstrukcijai” otrās projektu iesniegumu atlases kārtas īstenošanas noteikumi’ (Decree No 612 of the Council of Ministers laying down the regulations for implementing Phase Two of the project application selection procedure for the ‘Growth and Employment’ operational programme, specific support objective 3.1.1 ‘To promote the creation and development of SMEs, in particular in the manufacturing and [regional Research and Innovation Strategies for Smart Specialisation (RIS3)] priority sectors’, measure 3.1.1.5 ‘Support for investment in the establishment or reconstruction of production premises and infrastructure’) of 25 September 2018 (Latvijas Vēstnesis, 2018, No 101; ‘the Implementing Decree’). Article 7 of the Implementing Decree is worded as follows:

‘Phase Two of the project application selection procedure for the measure shall be implemented by means of an open procedure for the selection of project applications.’

23      Under Article 15 of the Implementing Decree:

‘A project shall not be eligible for funding where:

…

15.3.      The project applicant is classified as an undertaking in difficulty within the meaning of Article 2(18) of Commission Regulation No 651/2014;

…’

 The regulations on the selection of project applications

24      The practical aspects of the procedure for the selection of project applications are governed by the regulations on the selection of project applications, drafted by the Centrālā finanšu un līgumu aģentūra (Central Finance and Contracting Agency) (‘the competent national agency’), and by the annexes thereto.

25      Paragraph 6 of Section II of Annex 5 to those regulations, entitled ‘Methodology for applying the project application evaluation criteria’, provides:

‘An “unconditional positive” evaluation will be awarded where the project applicant is not an economic operator in difficulty. The classification [of a project applicant] as an undertaking in difficulty at the time of the decision on the grant of the aid must be made on an objective basis, using verifiable and reliable information about the project applicant and related undertakings:

(a)      The information in the most recent publicly available final annual report will be checked.

(b)      Where an interim activity report approved by a sworn auditor is submitted, the information in that report will be used as the basis for determining whether the undertaking is in difficulty.

(c)      Where the project applicant refers to publicly available ([that is to say], verifiable) information concerning an increase in share capital undertaken after the most recent final annual report, that information will be taken into account where it is accompanied by an interim activity report approved by a sworn auditor.

…

A “conditional positive” evaluation will be awarded where the information submitted is incomplete or not sufficiently precise. The project applicant will be invited to provide further clarification of the information submitted. Clarification is permitted only in respect of technical, arithmetical and drafting issues. …’

 The Commercial Code

26      Article 12 of the Komerclikums (Commercial Code), entitled ‘Disclosure in the register’, states:

‘(1)      Entries in the Commercial Register may be relied on as against third parties once they have been disclosed. …

(2)      Where information which is required to be entered in the Commercial Register is not entered, or is entered but not disclosed, the information in question may not be relied on as against third parties by the person for whose benefit the information should have been entered, unless the third parties in question had knowledge thereof.

…’

27      Article 196 of the Commercial Code, entitled ‘Resolutions on alterations to share capital’, provides:

‘(1)      Share capital may be increased or reduced only by means of a resolution, passed by a general meeting of the members, setting out the procedure for that increase or reduction.

…

(3)      In the event of a resolution that share capital is to be altered, the Articles of Association must also be altered accordingly at the same time.’

28      Article 202 of that code, entitled ‘Applications to the Commercial Registry concerning increases in share capital’, provides as follows in paragraph 3:

‘The increase in share capital shall be deemed to have occurred on the date on which the new share capital figure is entered in the Commercial Register.’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

29      In the context of an open procedure for the selection of projects to be granted funding under the ‘Growth and Employment’ programme co-financed by the ERDF, Zinātnes parks, a limited liability company governed by Latvian law, submitted a project application to the competent national agency on 30 April 2019, the deadline for submission of project applications. Alongside its application, the applicant submitted a resolution passed by a general meeting of its members on 29 April 2019 to alter its Articles of Association and to increase its share capital by means of a contribution of new shares, plus share premium, from a specified member, to be paid within a specified period.

30      During the evaluation period, the applicant informed the competent national agency that the increase in share capital had been entered in the Commercial Register on 24 July 2019, and, subsequently, by way of supplementary material the applicant provided an interim activity report approved by a sworn auditor.

31      By its rejection decision, the Ministry of Finance rejected Zinātnes parks’ project application on the ground that that company had to be regarded, on the date of submission of its application, as an ‘undertaking in difficulty’ within the meaning of Article 2(18)(a) of Regulation No 651/2014.

32      Hearing an action for annulment of that decision, the Administratīvā rajona tiesa (District Administrative Court, Latvia), the referring court, states that it is common ground between the parties that, if the information contained in Zinātnes parks’ most recent financial report, corresponding to 2018, were to be taken into account, Zinātnes parks would be classed as an ‘undertaking in difficulty’ within the meaning of Article 2(18)(a) of that regulation. Nor is there any dispute as to the fact that, after the increase in the share capital and the entry of the respective alterations in the Commercial Register, that company no longer fulfilled the criterion set out in Article 2(18)(a) of Regulation No 651/2014 for classification as an ‘undertaking in difficulty’. By contrast, there are differences of opinion between the parties as to the extent to which the entry of the abovementioned increase in share capital in the Commercial Register and the evidence offered by Zinātnes parks during the procedure for examining project applications should have been taken into account by the competent national agency.

33      In that context, the referring court has doubts, first of all, as to whether, in adopting the rejection decision, the Ministry of Finance correctly interpreted the concept of ‘subscribed share capital’ referred to in Article 2(18)(a) of Regulation No 651/2014 in the light of the concept of ‘share capital’ referred to in the Latvian national legislation as meaning only the share capital which has been disclosed, in accordance with the procedures specified in the national legislation.

34      Under the Latvian legal system, according to Article 202(3) of the Commercial Code, share capital is deemed to be increased on the day on which the new share capital is entered in the Commercial Register and it would be only from that date that such an increase would be enforceable against third parties. However, the referring court notes that Article 2(18)(a) of Regulation No 651/2014 does not contain any express reference to the law of the Member States for the purpose of defining the concept of ‘share capital’. In addition, Directive 2017/1132, in particular Articles 14 and 16 thereof, does not make the validity of decisions increasing the share capital subject to a precondition; nor does it expressly leave it to the Member States to govern the issue.

35      The referring court also asks whether the requirements laid down in connection with the selection procedure concerning the documents to be submitted and, in particular, the date on which they must be submitted, are relevant to the assessment of the financial situation of the person submitting the project application and whether, where appropriate, any shortcomings in a project application in terms of evidence of the project applicant’s financial situation may be corrected during the selection procedure. The referring court notes in particular that, in accordance with Article 125(3)(a)(ii) of Regulation No 1303/2013, selection procedures and criteria must be transparent and non-discriminatory.

36      The referring court considers that, prima facie, those principles are the source of the principle, enshrined in Article 30 of the Law on the Management of the Funds and developed in the regulations on the selection of project applications, according to which project applications cannot be clarified or supplemented after they have been submitted. Consequently, the competent national agency must comply with the criteria which it has itself established, so that it is required to exclude from the selection of projects applicants who have not attached a document or communicated information the production of which was required by the provisions governing that selection. That being said, the referring court notes that, although the Court has already held, in the context of public procurement, that there is also an obligation to comply with similar principles in the selection of tenders, such a consideration does not follow expressly from the case-law of the Court concerning State aid.

37      In those circumstances the Administratīvā rajona tiesa (District Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Must the concept of “subscribed share capital” in Article 2(18)(a) of [Regulation No 651/2014], in conjunction with other EU legal provisions relating to company law, be interpreted as meaning that, for the purposes of determining subscribed share capital, only particulars that have been published in the manner laid down by the national laws of each Member State may be taken into account, bearing in mind that the particulars in question are thus deemed to become effective only from that moment?

(2)      When assessing the concept of “undertaking in difficulty” in Article 2(18) of [Regulation No 651/2014], is it necessary to attach significance to the requirements, laid down as part of the procedure for selecting projects for European funds, concerning which documents are to be submitted as evidence of the financial situation of the undertaking in question?

(3)      If the reply to the second question referred is in the affirmative, is a provision of domestic law on the selection of projects, which establishes that no further clarification of projects may be made once they have been submitted, compatible with the principles of non-discrimination and transparency established in Article 125(3)(a)(ii) of [Regulation No 1303/2013]?’

 Consideration of the questions referred

 The first question

38      By its first question, the referring court asks, in essence, whether Article 2(18)(a) of Regulation No 651/2014 is to be interpreted as meaning that, in order to determine whether a company is ‘in difficulty’ within the meaning of that provision, the expression ‘subscribed share capital’ must be understood as referring only to contributions disclosed in accordance with the rules laid down by the national legislation of the Member State in which that company is incorporated.

39      As a preliminary point, it should be noted that Article 3 of Regulation No 1301/2013 excludes undertakings in difficulty, as defined by the EU rules on State aid, from any ERDF support.

40      At the time of the facts at issue in the main proceedings, the concept of an ‘undertaking in difficulty’ was defined by the EU rules on State aid set out in Article 2(18) of Regulation No 651/2014. Rather than using a single definition of the concept of an ‘undertaking in difficulty’, that provision sets out a number of alternative criteria, including, in subparagraph (a), that of a limited liability company being faced with accumulated losses of more than half of its subscribed share capital.

41      As regards the concept of ‘subscribed share capital’ used in Article 2(18) of Regulation No 651/2014, that provision merely states that that concept includes, where appropriate, share premiums. By contrast, neither that provision nor any other provision in that regulation gives any definition of that concept; nor do any of those provisions specify the date on which an increase in that capital is to be regarded as taking effect.

42      According to settled case-law, both the uniform application of EU law and the principle of equality require that the terms of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union. In addition, the meaning and scope of terms for which EU law provides no definition must be determined by reference to their usual meaning, while also taking into account the context in which they occur and the purposes of the rules of which they are part (see, to that effect, inter alia, judgment of 17 December 2020, BAKATI PLUS, C‑656/19, EU:C:2020:1045, paragraphs 38 and 39 and the case-law cited).

43      In that regard, it must be stated that, in the context of limited liability companies, the expression ‘share capital’ refers, in its usual sense, to the value of the contributions which the members or shareholders of a company have made available or have undertaken to make available to that company, in return for being issued with shares. As for the term ‘subscribed’, it is generally used to designate the sum which current or future members or shareholders have irrevocably committed to contributing to the company, regardless of whether or not the corresponding contributions have already been paid up. It is only when that word is in turn followed by the adjective ‘paid up’ that, by way of exception, the expression ‘subscribed share capital’ is used to refer only to the share capital actually paid by those members or shareholders.

44      It follows that, in so far as Article 2(18)(a) of Regulation No 651/2014 uses the words ‘subscribed share capital’ without further specification, those words must be understood as referring to all the contributions which current or future members or shareholders have already made or have irrevocably undertaken to make.

45      That conclusion is confirmed by the objectives pursued by Regulation No 651/2014, read in context.

46      In that regard, it should be recalled that the alternative criteria for defining the concept of ‘undertaking in difficulty’, set out in Article 2(18) of Regulation No 651/2014, seek to clarify the scope of Article 1(4) of that regulation, according to which that regulation does not apply to aid granted to undertakings in difficulty, with the exception of aid schemes to make good the damage caused by certain natural disasters.

47      According to recital 14 of that regulation, the objective pursued in turn in Article 1(4) and, consequently, by the concept of an ‘undertaking in difficulty’ is to ensure that aid granted to the undertakings concerned is assessed in the light of the guidelines specifically concerning State aid for rescuing and restructuring undertakings in difficulty, in order to prevent circumvention of those guidelines.

48      In that regard, the Communication from the Commission concerning the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (OJ 2014 C 249, p. 1), to which recital 14 of Regulation No 651/2014 expressly refers, states, in paragraphs 20 and 23 thereof, that ‘an undertaking is considered to be in difficulty when, without intervention by the State, it will almost certainly be condemned to going out of business in the short or medium term. … Given that its very existence is in danger, an undertaking in difficulty cannot be considered an appropriate vehicle for promoting other public policy objectives until such time as its viability is assured’.

49      In the light of the information in that communication from the Commission, the objective set out in recital 14 of Regulation No 651/2014 and the related criterion laid down in Article 2(18)(a) of Regulation No 651/2014 must be interpreted as seeking to assess the ability of the company concerned to maintain its activity in the short or medium term.

50      Examination of that criterion therefore requires account to be taken of all the contributions which the members or shareholders have irrevocably undertaken to make. Even where they have not yet been paid up, those contributions represent, in the same way as the contributions that have been paid up, relevant information concerning the ability of the company concerned to maintain its activity in the short or medium term.

51      Consequently, the concept of ‘subscribed share capital’ within the meaning of Article 2(18)(a) of Regulation No 651/2014 must be interpreted as constituting an autonomous concept which refers to all contributions which current or future members or shareholders of the company have made or have irrevocably undertaken to make.

52      In the present case, it is apparent from the documents submitted to the Court, referred to in paragraph 29 of the present judgment, that a general meeting of the members of Zinātnes parks, prior to the submission of its project application to the competent national agency for funding under an ERDF co-financing programme, consented to an increase in its share capital by means of the contribution, by a specified member, within a specified period, of new shares with a share premium. In the light of the autonomous and uniform interpretation of the concept of ‘subscribed share capital’ set out in the preceding paragraph of this judgment, it is for the referring court to assess whether those facts, established at the time that project was submitted, demonstrate the existence of an irrevocable commitment on the part of that member to carry out that increase in capital on the basis of the criteria laid down for that purpose by the national law under which the company concerned was incorporated.

53      In that regard, it must be pointed out that it is true that EU law, in Chapters III and IV of Title I of Directive 2017/1132, coordinates national disclosure rules regarding increases in capital in the case of companies falling within the scope of those chapters. However, it transpires from recitals 7 and 8 of that directive, as well as the first indent of Article 1 thereof, that that coordination is intended, inter alia, to enable third parties to ascertain the contents of the basic documents of the company concerned. By contrast, it does not follow either from the recitals of that directive or from any of its provisions that those disclosure rules constitute conditions that must be complied with in order for the commitment to make a contribution to be regarded as irrevocable.

54      In the light of all the foregoing considerations, the answer to the first question is that Article 2(18)(a) of Regulation No 651/2014 must be interpreted as meaning that, in order to determine whether a company is ‘in difficulty’ within the meaning of that provision, the expression ‘subscribed share capital’ must be understood as referring to all contributions which current or future members or shareholders of a company have made or have irrevocably undertaken to make.

 The second question

55      By its second question, the referring court asks, in essence, whether Article 3(3) of Regulation No 1301/2013 is to be interpreted as meaning that, in order to determine whether a project applicant is to be regarded as not being ‘in difficulty’ within the meaning of Article 2(18) of Regulation No 651/2014, the competent managing authority must take account only of offers of evidence which comply with the requirements laid down when the project selection procedure was established.

56      In that regard, it should be noted that Article 3(3) of Regulation No 1301/2013 merely states that the ERDF does not support undertakings in difficulty as defined by the EU rules on State aid. It must therefore be held that that provision does not contain any indication as to the nature of the evidence which may be taken into account in order to establish that an undertaking is not in difficulty.

57      That said, it is apparent from the wording of Article 125(3) of Regulation No 1303/2013, which defines the role of the managing authorities responsible for the management of operational programmes, that those authorities are required to draw up and, once approved, to apply appropriate selection procedures and criteria, and are also required to satisfy themselves, inter alia, that the beneficiaries of the aid have the financial capacity to fulfil the conditions for support and therefore, in the case of ERDF support, that the beneficiaries are not ‘in difficulty’ within the meaning of Article 2(18) of Regulation No 651/2014.

58      In order to comply with that obligation, the managing authorities must necessarily rely on information that is sufficiently reliable to rule out any reasonable doubt as to the financial situation of the companies concerned.

59      As regards the determination of the precise nature of the evidence which may be taken into account, given that EU legislation contains no indication in that regard, it falls within the procedural autonomy of the Member States, since the competent national authorities have, in that regard, discretion in drawing up the project selection procedure.

60      However, in accordance with the principles of equivalence and effectiveness, those evidential requirements must not be more demanding than those governing similar situations subject to domestic law, provided that such requirements, if applied, would make it possible to preserve the effectiveness of Article 3(3) of Regulation No 1301/2013; nor should they make it excessively difficult or impossible in practice to exercise the rights conferred by EU law, in particular the right of every project holder to be able effectively to submit it in order to receive ERDF support (see, by analogy, judgments of 21 January 2016, Eturas and Others, C‑74/14, EU:C:2016:42, paragraph 32, and of 3 June 2021, Instituto Madrileño de Investigación y Desarrollo Rural, Agrario y Alimentario, C‑726/19, EU:C:2021:439, paragraph 47).

61      In so far as the procedure at issue in the main proceedings concerns the grant, in the context of ERDF programmes, of funding from the budget of the Union and that, as such, it constitutes a measure implementing EU law, it must also comply with the general principles of EU law, which include, in particular, the principles of equal treatment, transparency and proportionality which are of fundamental importance where a procedure involving economic operators is at issue (see, to that effect, judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraphs 50 and 59).

62      Compliance with the principles of equal treatment and transparency implies, in particular, that the same evidential requirements apply to all applicants for the same programme and that those requirements be made public (see, by analogy, judgments of 2 June 2016, Pizzo, C‑27/15, EU:C:2016:404, paragraph 37, and of 11 May 2017, Archus and Gama, C‑131/16, EU:C:2017:358, paragraph 26). As regards the principle of proportionality, under that principle, those requirements must not go beyond what is necessary to ensure that the substantive conditions laid down by EU law have been met (see, to that effect, judgment of 3 June 2021, Rad Service and Others, C‑210/20, EU:C:2021:445, paragraph 34).

63      It is for the referring court to assess whether, in the present case, all of those conditions are satisfied. However, in order to guide it in that assessment, the Court may provide it with all the guidance as to the interpretation of EU law which may be useful to it (see, inter alia, judgments of 16 July 2015, CHEZ Razpredelenie Bulgaria, C‑83/14, EU:C:2015:480, paragraph 62, and of 6 October 2021, A (Crossing borders in a pleasure boat), C‑35/20, EU:C:2021:813, paragraph 85).

64      In that regard, it is apparent from the national legislation cited by the referring court that the classification as an ‘undertaking in difficulty’ must, in accordance with the requirements laid down in that legislation for the purposes of the selection procedure, be made solely in the light of the information contained in the most recent publicly available final annual report or, if an interim activity report approved by a sworn auditor is submitted by the project applicant, in the light of the information contained in that report. Where the project applicant refers to publicly available information concerning an increase in share capital undertaken after the most recent final annual report, that information will be taken into account where it is accompanied by an interim activity report approved by a sworn auditor.

65      First of all, since a company may, in principle, have an interim report drawn up by a sworn auditor at any time without this representing a cost to the company which is so excessive that such a requirement would make it excessively difficult or impossible in practice for a company which was ‘in difficulty’, within the meaning of Article 2(18) of Regulation No 651/2014, when its most recent final annual report was drawn up to demonstrate that it is no longer in difficulty, such rules cannot, in principle, be regarded as contrary to the principle of effectiveness.

66      Next, as regards compliance with the principles of equal treatment and transparency, it is not apparent from the documents before the Court that the referring court has doubts as to whether the requirements at issue in the main proceedings were duly disclosed or whether they are applicable without distinction.

67      Lastly, as regards the principle of proportionality, having regard to the requirements surrounding the drawing up of annual reports, which contribute to the reliability of the information contained therein, and to the guarantees offered by a sworn auditor’s approval of interim activity reports, requiring a managing authority to base its decision exclusively on those types of documents does not appear to go beyond what is necessary to ensure that the condition laid down in Article 2(18) of Regulation No 651/2014 has been met.

68      In those circumstances, EU law does not preclude, in principle, national legislation, such as that at issue in the main proceedings, from requiring a managing authority to assess the financial situation of an undertaking solely in the light of the information contained in the most recent publicly available final annual report of the company submitting the project application, and, where appropriate, in an interim activity report approved by a sworn auditor, provided that the interim activity report has been submitted to that authority, unless it is found that those requirements do not comply with the principle of equivalence, which is for the managing authority to determine.

69      In the light of all the foregoing considerations, the answer to the second question is that Article 3(3) of Regulation No 1301/2013 must be interpreted as meaning that, in order to determine whether a project applicant is to be regarded as not being ‘in difficulty’ within the meaning of Article 2(18) of Regulation No 651/2014, the competent managing authority must take account only of evidence which complies with the requirements laid down when the project selection procedure was drawn up, provided that those requirements comply with the principles of effectiveness and equivalence, as well as with the general principles of EU law, such as, in particular, the principles of equal treatment, transparency and proportionality.

 The third question

70      By its third question, the referring court asks, in essence, whether Article 125(3) of Regulation No 1303/2013, together with the principles of non-discrimination and transparency to which that provision refers, is to be interpreted as precluding national legislation under which project applications may not be the subject of clarification after they have been submitted.

71      At the outset, it should be noted that the referring court does not specify whether, when it refers in the wording of its question to the submission of projects, it is referring to the deadline for submission of project applications laid down by national law or to the date on which the project application of a concerned project applicant was submitted. However, it is apparent from the documents before the Court that, in the case at issue in the main proceedings, Zinātnes parks submitted its file on the date of the deadline for submission of project applications laid down by national law. Accordingly, it does not appear necessary to examine the issue of whether EU law requires Member States to allow project applicants to provide clarifications after the submission of their project applications but before the deadline for submission of such applications. By contrast, that question arises in relation to clarifications that may be provided after that deadline.

72      Next, it should be noted that Article 125(3)(d) of Regulation No 1303/2013 merely mentions that the competent managing authority must satisfy itself that each beneficiary of ERDF support has the administrative, financial and operational capacity to fulfil the conditions for support for each operation before approval of each operation, without specifying when that capacity must be assessed or when project applicants must provide that authority with the information necessary for the verification of that capacity.

73      Given that EU law does not specify the deadline for providing the managing authorities with the necessary evidence, it is for the Member States to decide this within the limits laid down by the principles of effectiveness and equivalence, as well as by the obligation on every managing authority to ensure scrupulously compliance with general principles of law, which include the principles of equal treatment and transparency, referred to in Article 125(3) of Regulation No 1303/2013, as well as the principle of proportionality.

74      As regards, in particular, the principles of transparency and equal treatment, it should be recalled that, where a Member State has set a deadline for project applicants to complete their file, those principles require the managing authorities to exclude from the selection procedure any application which has not been accompanied, by that date, by the necessary information (see, by analogy, judgments of 6 November 2014, Cartiera dell’Adda, C‑42/13, EU:C:2014:2345, paragraph 42, and of 2 June 2016, Pizzo, C‑27/15, EU:C:2016:404, paragraphs 42 to 44).

75      In the case at issue in the main proceedings, it is apparent from the information provided by the referring court that the Member State concerned, while taking the view that the condition laid down in Article 3(3) of Regulation No 1301/2013 must be assessed at the date of approval of project applications, chose to prohibit those project applicants from completing their file after expiry of the deadline for submission of those project applications.

76      Having regard to the need for the national managing authorities to have the necessary time to examine the files submitted to them (see, to that effect, by analogy, judgments of 10 February 1998, Germany v Commission, C‑263/95, EU:C:1998:47, paragraph 31, and of 25 March 2010, Commission v Spain, C‑392/08, EU:C:2010:164, paragraph 21), that Member State cannot, however, be criticised for having set a deadline for project applicants to communicate all the information necessary to the competent managing authority which was earlier than the date of approval of project applications.

77      Consequently, as the Advocate General stated, in essence, in point 80 of her Opinion, if project applicants were allowed to complete their file after the deadline for submission of project applications, the competent managing authority could find itself obliged to re-examine the same files repeatedly, with the risk that the date of approval of those applications would have to be postponed, thereby undermining the objectives of the financing programmes, or that the principles of equal treatment and transparency would no longer be observed. Such a possibility is also likely to give rise to additional costs for the competent managing authority, which a Member State may legitimately wish not to bear, in accordance with the principle of sound administration.

78      Therefore, it must be held that a Member State may decide that project applicants are not authorised to complete their file after expiry of the deadline for submission of project applications, even if the national legislation provides that the condition laid down in Article 3(3) of Regulation No 1301/2013 must be assessed at a later date.

79      In accordance with the principle of equivalence, it is important to identify, in national law, procedures which are comparable, having regard to their purpose, cause of action and essential characteristics, to that laid down for receipt of ERDF support and to ensure that those procedures are not, by allowing project applicants to complete their file after the deadline for submission of project applications, more favourable than that at issue in the main proceedings (see, by analogy, judgment of 26 September 2018, Belastingdienst v Toeslagen (Suspensory effect of the appeal), C‑175/17, EU:C:2018:776, paragraphs 42 to 44).

80      In the light of the foregoing considerations, the answer to the third question is that Article 125(3) of Regulation No 1303/2013, together with the principles of non-discrimination and transparency to which that provision refers, must be interpreted as not precluding national legislation under which project applications may not be the subject of clarification after the deadline for submission of those applications. However, in accordance with the principle of equivalence, that impossibility, for project applicants, to complete their file after the deadline for submission of project applications must concern all procedures which may, where appropriate, be regarded as comparable with regard to their purpose, cause of action and essential characteristics to that laid down for receipt of ERDF support.

 Costs

81      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Fifth Chamber) hereby rules:

1.      Article 2(18)(a) of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU] must be interpreted as meaning that, in order to determine whether a company is ‘in difficulty’ within the meaning of that provision, the expression ‘subscribed share capital’ must be understood as referring to all contributions which current or future members or shareholders of a company have made or have irrevocably undertaken to make.

2.      Article 3(3) of Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 must be interpreted as meaning that, in order to determine whether a project applicant is to be regarded as not being ‘in difficulty’ within the meaning of Article 2(18) of Regulation No 651/2014, the competent managing authority must take account only of evidence which complies with the requirements laid down when the project selection procedure was drawn up, provided that those requirements comply with the principles of effectiveness and equivalence, as well as with the general principles of EU law, such as, in particular, the principles of equal treatment, transparency and proportionality.

3.      Article 125(3) of Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006, together with the principles of non-discrimination and transparency to which that provision refers, must be interpreted as not precluding national legislation under which project applications may not be the subject of clarification after the deadline for submission of those applications. However, in accordance with the principle of equivalence, that impossibility, for project applicants, to complete their file after the deadline for submission of project applications must concern all procedures which may, where appropriate, be regarded as comparable with regard to their purpose, cause of action and essential characteristics to that laid down for receipt of support from the European Regional Development Fund.

[Signatures]

*      Language of the case: Latvian.

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