According to a ruling by the Higher Administrative Court for the state of North Rhine-Westphalia, additional provisions to approval notices for Corona emergency aid in North Rhine-Westphalia cannot be repealed in isolation.
This decision was based on a case from Düsseldorf: At the end of March 2020, the Düsseldorf district government approved NRW emergency aid 2020 in the amount of €9,000.00 for the craftswoman, who was still based in Düsseldorf, for her craft business. The approval notice can be found under “II. Additional provisions” a total of eight additional provisions designated as such:
The decision is based on a number of 4 full-time equivalents.
The basis and part of the decision is your application dated March 28, 2020.
If you find out at the end of the three-month approval period that this financial aid is higher than your loss of sales less any costs saved (e.g. rent reduction) and you do not need the funds (in full) to secure your economic existence or compensate for your liquidity bottleneck, these are overpaid funds to the account […] to be repaid stating the file number.
The refunded amount is not taxable.The financial assistance must be refunded if the decision was issued based on incorrect or incomplete information or if compensation payments, insurance payments and/or other support measures individually and/or together lead to overcompensation. Loans are excluded from being taken into account. In this case, the emergency aid granted is subject to annual interest from the onset of overcompensation at five percentage points above the base interest rate in accordance with Section 247 of the German Civil Code (BGB) in accordance with Section 49a (3) VwVfG NRW.
I reserve the right to check the use of emergency aid in individual cases. In this case, the granting authority is entitled to request books, receipts and other business documents and to check the use of emergency aid through local surveys or to have it checked by representatives. You must have the necessary documents ready and provide the necessary information. The granting authority, your responsible tax office, the State Audit Office of North Rhine-Westphalia and the subordinate authorities (see Section 91 LHO), the Federal Audit Office, the Federal Ministry for Economic Affairs and Energy and the European Commission are also authorized to carry out audits.
All relevant documents must be retained for 10 years from the granting of this emergency aid (date of this decision).
Upon receipt of the decision and the funds paid out in the above amount in your account, you assure that the information provided in the application submitted, including the attachments, is complete and correct and undertake to immediately report any changes in the information provided to the granting authority.
Proof of the use of the emergency aid can be provided using the form available online at your local tax office and must be enclosed with the next tax return. Related documents must be kept, but not sent along.
According to the state of North Rhine-Westphalia, corresponding additional provisions were attached to all of the approximately 430,000 approval notices for NRW emergency aid 2020 issued between March and May 2020.
Your lawsuit against these additional provisions was unsuccessful in the first instance before the Düsseldorf Administrative Court. And the Higher Administrative Court in Münster has now also rejected the craftswoman’s appeal, which still concerns the majority of the additional provisions, as unfounded:
The craftswoman cannot demand that the additional provisions be repealed and thus receive the permit without these provisions. She has no right to this. The authorization could also not lawfully remain in place without the challenged provisions.
In any case, the legal system does not allow the granting of grants in the amount of the maximum funding rate – which only took place in North Rhine-Westphalia – without the contested and still disputed provisions. These should ensure that the emergency aid initially granted as a lump sum only remains with companies to the extent that it was necessary according to the exclusive and binding earmarking specified by the EU Commission, and that overpaid or otherwise reimbursed amounts are repaid. All of them have the purpose of complying with the strict requirements of the federal small aid regulations approved by the EU Commission. If one of them were deleted, compliance would no longer be ensured, so that the approval, which was then carried out without the approval of the Commission, would violate the provisions of EU law on state aid.
In the opinion of the Higher Administrative Court, the action is already inadmissible insofar as it is directed against the provisions under II. Numbers 3 and 4. These are not independently contestable content provisions of the approval notice. These provisions each contain an element of the main regulation that defines and specifies the details of the authorization in more detail so that the authorization meets the requirements of the EU Commission. According to this, emergency aid to commercial companies could only be granted to resolve companies’ liquidity bottlenecks and to ensure that the disruptions caused by the COVID-19 outbreak did not affect the viability of such companies. The Commission’s approval, which was necessary for legality under EU law, was only available for donations that were necessary for this purpose. Provisions II. Numbers 3 and 4 express in particular the provisional nature of the approval in the amount of the maximum funding amount in order to comply with this earmarking in an uncertain situation and the resulting obligation to repay overpaid or otherwise compensated amounts.
With regard to the other additional provisions, the Higher Administrative Court is of the opinion that the action is admissible, but unfounded. In particular, the ancillary provisions under II. Numbers 5, 6 and 8, which can be challenged in isolation, were not inadmissibly issued entirely by automatic devices. The approval notice is also based on an act of will by the responsible clerk. Incidentally, even a completely automated approval would make the entire decision illegal and therefore does not justify the removal of individual additional provisions. The additional provisions are also based on the purpose of the approval and the requirements of the EU Commission without any discretionary errors. Granting funds without these provisions would violate Union law. They should ensure that the emergency aid was used exclusively and in full to compensate for the economic bottlenecks caused directly by the Corona pandemic by proving the appropriate use of funds and substantiating them in individual case reviews, as well as the funds that were not appropriately needed or otherwise reimbursed during the entire approval period of three months subsequently had to be determined and repaid.
Higher Administrative Court for the State of North Rhine-Westphalia, judgment of October 1, 2024 – 4 A 357/21
