Dansk Arhverv v Commission (T-47/19)

The German States of Schleswig-Holstein and Meckelnburg-Vorpommern seem to have failed to enforce a federal law on drink packaging deposits at border shops within their territories. The Commission found this not to be aid, but this finding was challenged, inter alia, by the Danish Chamber of Commerce who initially filed the complaint. The General Court held that not charging a deposit did not lead to the use of State resources and could not prima facie be deemed aid, nor could the inherent result of not charging VAT on such non-collected deposit. However, the General Court held that not imposing fines could lead to State aid. Even in the face of ambiguous legislation, State authorities that decide not to impose fines are under an obligation to make an effort to gradually resolve the difficulties in interpreting federal law. The Court held that there was no clear basis for an exception of border shops in German Federal Law nor was such exception applied across Germany. As the issue of the deposit and the VAT were linked to the non-enforcement by not charging a fine, the Commission’s decision was annulled in its entirety as the Commission should first have acted upon the serious difficulties at hand.