Strasbourg, 4 April 2008

Dear Mr X,

On 2 December 2005, you submitted a complaint to the European Ombudsman against the European Commission concerning its decision dated 25 August 2005 to recover EUR 16 204.45, corresponding to undue pension payments.

On 31 January 2006, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 5 May 2006. I forwarded it to you with an invitation to make observations, which were received on 31 July 2006.

On 15 February 2007, I requested further information from the Commission and informed you accordingly on the same date. On 15 October 2007, the Commission replied to my request. I forwarded to you the Commission's reply and invited you to make observations, if you so wished. No observations were received from you.

I am writing now to let you know the results of the inquiries that have been made.

I apologise for the length of time it has taken to deal with your complaint.

THE COMPLAINT

In summary, the facts according to the complainant were as follows:

On 6 May 1991, the European Commission informed the complainant, who had been in receipt of an orphan’s pension, that he would no longer receive orphan’s pension payments with effect from 1 July 1990 as he was no longer attending school on a full-time basis.

On 31 July 1991, the complainant was informed that the sums he received from July 1990 until February 1991, that is, EUR 8 350.85, would be recovered. He was informed that, if he were to fail to make this payment by 31 August 1991, interest would be charged.

The complainant appealed against this decision, which was, however, confirmed on 13 September 1991.

On account of his failure to make the payment, the Commission sent several reminder letters to the complainant on 15 June 1992, 21 October 1992, 8 February 1993, 16 June 1993, 15 June 1994, 7 June 1995, and 26 June 2003.

By letter of 27 June 2003, the Commission gave the complainant notice to pay EUR 8 350.85, plus interest for late payment. The Commission indicated that, if no payment was received, it would launch the enforcement procedure in order to recover the above amount.

On 25 August 2005, given that the complainant did not reply to the debit note, the reminder or the notice of default sent by recorded delivery ("lettre de mise en demeure sous pli recommandé"), the Commission took a formal decision to recover the sums unduly paid to the complainant. It informed him that he owed the Commission the sum of EUR 16 204.45, which was composed of the original amount of EUR 8 350.85, plus EUR 7 853.60 in interest. The Commission also informed him that, if no payment was received within two weeks, the Commission would enforce the decision, in accordance with Article 256 of the EC Treaty.

On 30 August 2005, the complainant challenged the order to reimburse the Commission. He did not understand why the Commission considered that he had received undue payments. He asked what "attendance on a full-time basis" meant and why he had not been informed, in July 1990, of the problem with respect to the appropriateness of the school he was attending. Finally, he did not understand why he was asked to refund sums paid ten years ago.

On 7 September 2005, the Commission confirmed its decision, indicating that, since January 1991, the Pensions Unit had had doubts about the certificate that he had provided for the school year 1990/1991 and had sent him a warning in this regard. The Commission noted that the school that he was attending could not provide him with a certificate of school attendance for the school year 1990/1991 because he had not sent the school a sufficient number of assignments.

On the same date, the complainant wrote again to the Commission asking for the date of the first payment of the orphan’s pension and the rules concerning orphan’s pension payments. He stated that he never received a letter warning him about the validity of the certificate for the school year 1990/1991. He added that the number of assignments provided should not be taken into account for the payment of the orphan's pension. He also indicated that, in view of the circumstances, namely, the death of his mother and medical treatment, it was difficult for him to provide all assignments and that he had done his best to study.

In his complaint to the European Ombudsman, the complainant claimed that the Commission should annul its decision to recover undue orphan pension payments. He stated that the Commission repeated its request for reimbursement every two years. He also alleged that the Commission's decision of 25 August 2005 to enforce its recovery decision was untimely.

The complainant requested that his complaint be treated confidentially.

On 31 January 2006, the Ombudsman opened an inquiry into the following allegation:

The complainant alleged that the Commission's decision of 25 August 2005 to enforce its recovery decision was untimely.

The Ombudsman took the view that the claim that the Commission should annul its decision to recover undue orphan’s pension payments was time-barred, because it was not made within two years of the date on which the facts on which it was based came to the attention of the complainant(1).

THE INQUIRY

The Commission's opinion

The Commission's opinion can be summarised as follows:

(1) Background

During the school year 1989-1990, the complainant, who was receiving an orphan’s pension, attended a vocational training programme.

In January 1991, the complainant sent the Commission a certificate concerning his studies, which showed that, since 29 November 1990, he had been attending a private school giving correspondence training.

On 24 January 1991, the Commission requested further information about the school. In the meantime, given the doubts about the validity of his school certificate for the school year 1990/1991, the Commission suspended the payment of the pensions for March, April and May 1991 and placed them in a temporary account.

On 15 April 1991, the complainant replied to the Commission's request of 24 January 1991, sending a registration form for studies in finance.

The Commission contacted the school, which indicated that the complainant had not sent it enough assignments and that, consequently, a certificate of school attendance could not be delivered for the academic year 1990-1991. Consequently, on 6 May 2001, the Commission informed the complainant that, since 1 July 1990, he was no longer entitled to an orphan's pension.

On 31 July 1991, the Commission informed the complainant that it would recover undue pensions, corresponding to an amount of EUR 8 350.85. This amount had to be paid before 31 August 1991. Interest for late payment would be charged if no payment were made.

On 15 August 1991, the complainant appealed against this decision.

On 13 September 1991, the Commission confirmed its decision. Several reminders were sent to the complainant on the following dates: 15 June 1992, 21 October 1992, 8 February 1993, 16 June 1993, 15 June 1994, 7 June 1995 and 26 June 2003.

By letter of 27 June 2003, the Commission gave the complainant notice to repay the unduly paid amounts plus interest for late payment.

On 25 August 2005, the Commission adopted the decision concerning the recovery of the unduly paid amounts and informed the complainant that the decision would be enforced in accordance with Article 256 of the EC Treaty.

On 30 August 2005, the complainant challenged the decision.

On 7 September 2005, the Commission confirmed its decision.

(2) The Commission's observations on the complaint

The Commission recalled Article 80 of the Staff Regulations which states that:

"Where an official or person entitled to a retirement or invalidity pension dies leaving no spouse entitled to a survivor's pension, the dependent children within the meaning of Article 2 of Annex VII shall be entitled to orphans' pension in accordance with Article 21 of Annex VIII. (...)".

According to Article 2(2) of Annex VII of the Staff Regulations, a dependent child "means the legitimate, natural or adopted child of an official, or of his spouse, who is actually being maintained by the official. (...)". Article 2(3)(b) of Annex VII provides that, for the purposes of allowances, dependent children shall include "children between 18 and 26 who are receiving educational or vocational training."

The payment of an orphan’s pension was therefore linked to the requirement to receive educational or vocational training. Consequently, the absence of such training during the academic year 1990-1991 led to the retroactive suspension of the pension and, consequently, the steps to recover the undue amounts.

The Commission recalled that, in the present case, the debt was certain, of a fixed amount and due.

Besides, had the complainant wished that the decision be annulled, he should have lodged an appeal before the Court of First Instance within two months of the notification of the decision, in accordance with Article 230 of the EC Treaty.

As regards the allegation that its decision was untimely, the Commission considered that its rapid reaction in March 1991, as well as the numerous reminders it sent to the complainant, showed clearly the reasonable nature of the recovery time-frame and its diligent behaviour. The Commission noted that the complainant admitted that the Commission had been persistent. The long time-frame of this recovery procedure was entirely attributable to the complainant, who did not reply to the requests to pay, the reminders, the notice of default or the recovery decision of 25 August 2005.

In conclusion, the Commission took the view that the complaint was not grounded.

The complainant's observations

The complainant's observations can be summarised as follows:

The Commission's decision to suspend the payment of the orphan’s pension was based on the absence of a school attendance certificate. He added that the Commission's decision had some consequences with respect to his studies, notably on the number of courses he attended.

The complainant stated that, although the Commission sent him a letter on 7 June 1995, it was only eight years later (that is, on 26 June 2003) that it repeated its request. He also wondered whether the Commission was not too late in asking for recovery. He indicated that he did not appeal the decision before the Court of First Instance because he had no financial means to do so. He referred to Article 6(1) of the European Convention on Human Rights and considered that the means at his disposal were limited compared to those at the Commission's disposal.

Further inquiries

After careful consideration of the Commission's opinion and the complainant's observations, it appeared that further inquiries were necessary. The Ombudsman therefore asked the Commission to:

1. explain its inaction during the period 1995-2003;
2. clarify whether there is a legal provision time-barring the enforcement of a recovery order if a certain period of time has elapsed since its issuance;
3. re-examine the matter taking into account the Court of First Instance's reasoning in paragraph 162 of Case T-394/03 Angeletti v Commission(2);
4. comment on the possible application of Article 87 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities(3) ("Regulation 2342/2002").

The Commission's further opinion

The Commission's further opinion can be summarised as follows:

(1) and (2) Inaction during the period 1995-2003 and the existence of a legal provision time-barring the enforcement of a recovery order

The Commission stated that the background information that it provided in its opinion showed that it reacted quickly and correctly during the first semester of 1991, when the irregularity of the payment of the orphan allowance to the complainant was noticed. Between 1992 and 1995, the Commission sent six reminders to the complainant. Between 1995 and 2003, the Commission did not follow up the matter, but did not close the file, because of the manifest absence of cooperation from the complainant. After checking all the old recovery orders following the entry into force of the new Financial Regulation on 1 January 2003(4), the Commission resumed its follow-up of this file and sent the complainant a notice to pay. In fact, the new Financial Regulation did not provide for a limitation period as regards the recovery of undue payments.

(3) Re-examination of the matter taking into account the reasoning in Case T-394/03 Angeletti v Commission

The Commission shared the Court of First Instance's position as regards the obligation to comply with a reasonable time-limit in administrative procedures. In the present case, however, it insisted on the fact that the delays were mainly due to the complainant and his lack of cooperation. The Commission recalled that it was clearly established that the complainant should refund the Commission an amount of EUR 8 350.85 plus interest for late payment. From March 1991, orphan’s pension payments to the complainant were suspended. On 6 May 1991, the Commission informed the complainant that he was no longer entitled to receive an orphan’s pension and that this applied retroactively as from July 1990. On 31 July 1991, the Commission sent the complainant a debit note.

The Commission sent him reminders on 15 June 1992, 21 October 1992, 8 February 1993, 16 June 1993, 15 June 1994, 7 June 1995 and 26 June 2003, to which the complainant did not reply. The complainant did not reply to the default notice sent on 26 June 2003, which led the Commission to send him a recovery order dated 25 August 2005.

Therefore, the Commission took the view that its rapid reaction in 1991 and the numerous reminders it sent to the complainant did not constitute a breach of the respect of a reasonable time period.

(4) Application of Article 87 of Regulation 2342/2002

The Commission noted that the complainant currently lived in Canada. In these circumstances, the foreseeable cost of the enforcement of the recovery order would exceed the amount of the debt. Therefore, the Commission decided to forego the recovery of the debt in accordance with Article 87 of Regulation 2342/2002.

The complainant's further observations

No observations were received from the complainant.

THE DECISION

1 Alleged untimely Commission decision to enforce its recovery decision

1.1 In 1991, the European Commission informed the complainant that he would no longer receive orphan’s pension payments with effect from 1 July 1990 because he was no longer attending school on a full-time basis and that the sums received from July 1990 until February 1991, that is, EUR 8 350.85, would be recovered. On 25 August 2005, the Commission took a formal decision to recover the sums unduly paid to the complainant, that is, EUR 8 350.85, plus EUR 7 853.60 in interest, and informed him that, if no payment were received within two weeks, the Commission would enforce the decision in accordance with Article 256 of the EC Treaty. The complainant alleges that the Commission's decision of 25 August 2005 to enforce its recovery decision was untimely.

1.2 According to the Commission, the payment of an orphan’s pension is linked to the requirement to receive educational or vocational training. Consequently, the absence of such training during the academic year 1990-1991 led to the retroactive suspension of the pension and, consequently, the steps to recover the undue payments. As regards the allegation that its decision is untimely, the Commission considered that its rapid reaction in March 1991, as well as the numerous reminders it sent to the complainant, show clearly the reasonable nature of the recovery time-frame and its diligent behaviour. The Commission noted that the complainant admitted that it had been persistent. The long time-frame of this recovery procedure was entirely attributable to the complainant, who did not reply to the requests to pay, the reminders, the notice letter or the recovery decision of 25 August 2005.

1.3 In his observations, the complainant stated that, although the Commission sent him a letter on 7 June 1995, it was only eight years later, that is, on 26 June 2003, that it repeated its request. He also wondered whether the Commission was not too late to ask for recovery.

1.4 On the basis of the above, the Ombudsman considered that further inquiries were necessary. Therefore, he asked the Commission (i) to explain its inaction during the period from 1995 to 2003; (ii) to clarify whether there is a legal provision time-barring the enforcement of a recovery order in the event that a certain period of time has elapsed since its issuance; (iii) to re-examine the matter taking into account the Court of First Instance's reasoning in paragraph 162 of Case T-394/03 Angeletti v Commission; and (iv) to comment on the potential application of Article 87 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities(5) ("Regulation 2342/2002").

1.5 In its further opinion, the Commission stated that it reacted quickly and correctly in 1991 when the irregularity was noticed. Between 1992 and 1995, the Commission sent six reminders to the complainant. Between 1995 and 2003, the Commission did not follow up the matter. After checking all the old recovery orders following the entry into effect of the new Financial Regulation on 1 January 2003, the Commission resumed its follow-up of this file and sent the complainant a letter of notice.

In fact, the new Financial Regulation does not provide for a limitation period as regards the recovery of unduly paid sums.

The Commission repeated that the delays in the present file are mainly due to the complainant and his lack of cooperation. Therefore, the Commission took the view that its rapid reaction in 1991 and the numerous reminders do not constitute a breach of the respect of a reasonable time period, as defined by the Court of First Instance in Case T-394/03 Angeletti v Commission.

The Commission, however, noted that the complainant currently lives in Canada. In these circumstances, the foreseeable cost of the enforcement of the recovery order would exceed the amount of the debt. Therefore, the Commission has decided to forego the recovery of the debt, in accordance with Article 87 of Regulation 2342/2002.

1.6 The Ombudsman notes that the complainant was first informed that he would have to repay an amount of EUR 8 350.85 on 6 May 1991. Subsequently, the Commission confirmed its decision to recover the unduly paid sums on: 31 July 1991, 13 September 1991, 15 June 1992, 21 October 1992, 8 February 1993, 16 June 1993, 15 June 1994, 7 June 1995, 26 and 27 June 2003. On 25 August 2005, the Commission decided to proceed with the enforcement of the recovery decision, corresponding to a total amount of EUR 16 204.45, which was composed of the original amount of EUR 8 350.85, plus EUR 7 853.60 in interest, if no payment were to be made within 15 days. This decision was confirmed on 7 September 2005.

1.7 The Ombudsman notes that Article 84 of Regulation 2342/2002 requires the initiation "without delay (...) [of] the procedure for effecting recovery by any means offered by the law" (emphasis added). He understands that this requirement is designed, inter alia, to promote the sound management of Community finances and was established in the interest of the Community. He further notes that there is no specific provision time-barring the enforcement of a recovery decision.

The Ombudsman takes the view that the Commission quickly took measures to recover the unduly paid sums after it became aware that the complainant was no longer entitled to the orphan’s pension. However, he also notes that the Commission admitted to not having followed up the matter between 1995 and 2003 and that it resumed its follow-up when the new Financial Regulation entered into force on 1 January 2003.

The Ombudsman recalls that, according to the case-law of the Community Courts, "the obligation to comply with a reasonable time-limit in administrative procedures is a general principle of Community law"(6). In this context, the Ombudsman considers that while it cannot be excluded that the Commission was entitled to recover the amounts unduly paid, and to charge interest for the delays attributable to the complainant, it was not necessarily in conformity with principles of good administration also to charge interest for delays attributable to the Commission, namely the delay from 1995 until 2003.

However, given that the Commission has decided to forego the recovery of the debt on the ground that the foreseeable cost of the enforcement of the recovery order would exceed the amount of the debt, the Ombudsman considers that there are no grounds for further inquiries into this complaint.

2 Conclusion

For the reasons explained above, the Ombudsman considers that there are no grounds for further inquiries into this complaint. The Ombudsman therefore closes the case.

The President of the Commission will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Article 2(4) of the Statute of the Ombudsman applies even to cases in which the facts came to the attention of the complainant at a time when the institution of the European Ombudsman and the right to lodge a complaint with the Ombudsman had not yet been established.

(2) Case T-394/03 Angelleti v Commission, judgment of 11 April 2006, not yet reported, at paragraph 162, which states the following:

"L’obligation d’observer un délai raisonnable dans la conduite des procédures administratives constitue un principe général de droit communautaire dont la juridiction communautaire assure le respect et qui est, d’ailleurs, repris, comme une composante du droit à une bonne administration, par l’article 41, paragraphe 1, de la charte. Toutefois, la violation du principe de respect du délai raisonnable ne justifie l’annulation d’une décision prise à l’issue d’une procédure administrative en matière de concurrence qu’en tant qu’elle emporterait également une violation des droits de la défense de l’entreprise concernée. En effet, lorsqu’il n’est pas établi que l’écoulement excessif du temps a affecté la capacité des personnes concernées de se défendre effectivement, le non-respect du principe de délai raisonnable est sans incidence sur la validité de la procédure administrative."

(3) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 357, p. 1). Article 87 deals with the waiving of recovery of an established amount receivable.

(4) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1).

(5) See note 4.

(6) Case T-394/03 Angelleti v Commission, judgment of 11 April 2006, not yet reported, paragraph 162.