# Official Journal C 40/2020

| | ISSN 1977-091X |
| --- | --- |
| Official Journal
  of the European Union | C 40 |
| | |
| English edition | Information and Notices | Volume 636 February 2020 |

ISSN 1977-091X

Official Journal

of the European Union

C 40

English edition

Information and Notices

Volume 636 February 2020

---

| Contents | page |
| --- | --- |
| | IV   Notices |
| | NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES |
| | European Commission |
| 2020/C 40/01 | Euro exchange rates — 5 February 2020 | 1 |
| | NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA |
| | EFTA Surveillance Authority |
| 2020/C 40/02 | Decision No 085/19/COL of 4 December 2019 to open a formal investigation into potential state aid granted to the Remiks Group related to waste handling services (Case 84370) Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues | 2 |
| 2020/C 40/03 | Decision No 86/19/COL of 5 December 2019 to open a formal investigation into alleged state aid granted to Gagnaveita Reykjavíkur Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues | 16 |

Contents

page

IV   Notices

NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

2020/C 40/01

Euro exchange rates — 5 February 2020

1

NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA

EFTA Surveillance Authority

2020/C 40/02

Decision No 085/19/COL of 4 December 2019 to open a formal investigation into potential state aid granted to the Remiks Group related to waste handling services (Case 84370) Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues

2

2020/C 40/03

Decision No 86/19/COL of 5 December 2019 to open a formal investigation into alleged state aid granted to Gagnaveita Reykjavíkur Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues

16

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| | V   Announcements |
| --- | --- |
| | COURT PROCEEDINGS |
| | EFTA Court |
| 2020/C 40/04 | Efta court Judgment of the Court of 13 November 2019 in Case E-2/19 | 33 |
| | PROCEDURES RELATING TO THE IMPLEMENTATION OF THE COMMON COMMERCIAL POLICY |
| | European Commission |
| 2020/C 40/05 | Notice of the impending expiry of certain anti-dumping measures | 34 |
| | PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY |
| | European Commission |
| 2020/C 40/06 | Prior notification of a concentration (Case M.9714 — Viacom/beIN/Miramax) Candidate case for simplified procedure (
  1
  ) | 35 |
| 2020/C 40/07 | Prior notification of a concentration (Case M.9719 — Fairfax Financial Holdings Limited/OMERS Administration Corporation/Riverstone Barbados Limited) Candidate case for simplified procedure (
  1
  ) | 37 |
| | OTHER ACTS |
| | European Commission |
| 2020/C 40/08 | Notification of the approval of a standard amendment to a product specification for a name in the wine sector, as referred to in Article 17(2) and (3) of Commission Delegated Regulation (EU) 2019/33 | 38 |
| 2020/C 40/09 | Notice to undertakings intending to place hydrofluorocarbons in bulk on the market in the European Union in 2021 | 47 |

V   Announcements

COURT PROCEEDINGS

EFTA Court

2020/C 40/04

Efta court Judgment of the Court of 13 November 2019 in Case E-2/19

33

PROCEDURES RELATING TO THE IMPLEMENTATION OF THE COMMON COMMERCIAL POLICY

European Commission

2020/C 40/05

Notice of the impending expiry of certain anti-dumping measures

34

PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY

European Commission

2020/C 40/06

Prior notification of a concentration (Case M.9714 — Viacom/beIN/Miramax) Candidate case for simplified procedure (
  1
  )

1

35

2020/C 40/07

Prior notification of a concentration (Case M.9719 — Fairfax Financial Holdings Limited/OMERS Administration Corporation/Riverstone Barbados Limited) Candidate case for simplified procedure (
  1
  )

1

37

OTHER ACTS

European Commission

2020/C 40/08

Notification of the approval of a standard amendment to a product specification for a name in the wine sector, as referred to in Article 17(2) and (3) of Commission Delegated Regulation (EU) 2019/33

38

2020/C 40/09

Notice to undertakings intending to place hydrofluorocarbons in bulk on the market in the European Union in 2021

47

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| | |
| --- | --- |
| | (1)   Text with EEA relevance. |

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(1)   Text with EEA relevance.

1

| EN | |
| --- | --- |

EN

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IV Notices

NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

| 6.2.2020 | EN | Official Journal of the European Union | C 40/1 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/1

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Euro exchange rates (1)

5 February 2020

(2020/C 40/01)

1 euro =

| | Currency | Exchange rate |
| --- | --- | --- |
| USD | US dollar | 1,1023 |
| JPY | Japanese yen | 120,94 |
| DKK | Danish krone | 7,4728 |
| GBP | Pound sterling | 0,84444 |
| SEK | Swedish krona | 10,5450 |
| CHF | Swiss franc | 1,0717 |
| ISK | Iceland króna | 138,10 |
| NOK | Norwegian krone | 10,1173 |
| BGN | Bulgarian lev | 1,9558 |
| CZK | Czech koruna | 25,055 |
| HUF | Hungarian forint | 335,76 |
| PLN | Polish zloty | 4,2491 |
| RON | Romanian leu | 4,7734 |
| TRY | Turkish lira | 6,5975 |
| AUD | Australian dollar | 1,6299 |
| CAD | Canadian dollar | 1,4644 |
| HKD | Hong Kong dollar | 8,5572 |
| NZD | New Zealand dollar | 1,7006 |
| SGD | Singapore dollar | 1,5202 |
| KRW | South Korean won | 1 302,97 |
| ZAR | South African rand | 16,2246 |
| CNY | Chinese yuan renminbi | 7,6858 |
| HRK | Croatian kuna | 7,4568 |
| IDR | Indonesian rupiah | 15 036,47 |
| MYR | Malaysian ringgit | 4,5382 |
| PHP | Philippine peso | 55,961 |
| RUB | Russian rouble | 69,0320 |
| THB | Thai baht | 34,133 |
| BRL | Brazilian real | 4,6614 |
| MXN | Mexican peso | 20,4923 |
| INR | Indian rupee | 78,4330 |

Currency

Exchange rate

USD

US dollar

1,1023

JPY

Japanese yen

120,94

DKK

Danish krone

7,4728

GBP

Pound sterling

0,84444

SEK

Swedish krona

10,5450

CHF

Swiss franc

1,0717

ISK

Iceland króna

138,10

NOK

Norwegian krone

10,1173

BGN

Bulgarian lev

1,9558

CZK

Czech koruna

25,055

HUF

Hungarian forint

335,76

PLN

Polish zloty

4,2491

RON

Romanian leu

4,7734

TRY

Turkish lira

6,5975

AUD

Australian dollar

1,6299

CAD

Canadian dollar

1,4644

HKD

Hong Kong dollar

8,5572

NZD

New Zealand dollar

1,7006

SGD

Singapore dollar

1,5202

KRW

South Korean won

1 302,97

ZAR

South African rand

16,2246

CNY

Chinese yuan renminbi

7,6858

HRK

Croatian kuna

7,4568

IDR

Indonesian rupiah

15 036,47

MYR

Malaysian ringgit

4,5382

PHP

Philippine peso

55,961

RUB

Russian rouble

69,0320

THB

Thai baht

34,133

BRL

Brazilian real

4,6614

MXN

Mexican peso

20,4923

INR

Indian rupee

78,4330

---

(1)  Source: reference exchange rate published by the ECB.

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NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA

EFTA Surveillance Authority

| 6.2.2020 | EN | Official Journal of the European Union | C 40/2 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/2

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Decision No 085/19/COL of 4 December 2019 to open a formal investigation into potential state aid granted to the Remiks Group related to waste handling services (Case 84370)

Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues

(2020/C 40/02)

By means of the above referenced Decision, reproduced in the authentic language on the pages following this summary, the EFTA Surveillance Authority notified the Norwegian authorities of its decision to initiate proceedings pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure.

| EFTA Surveillance Authority |
| --- |
| Registry |
| Rue Belliard 35 |
| 1040 Bruxelles/Brussel |
| BELGIQUE/BELGIË |
| registry@eftasurv.int |

EFTA Surveillance Authority

Registry

Rue Belliard 35

1040 Bruxelles/Brussel

BELGIQUE/BELGIË

registry@eftasurv.int

The comments will be communicated to the Norwegian authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

Summary

Procedure

| (1) | The Authority received a complaint from the trade organisation ‘Norsk Industri’ on 16 August 2016. |
| --- | --- |

(1)

| (2) | Following requests, the Authority received information from the Norwegian authorities on 5 October 2016, 28 February, 20 March, 22 August, 31 October, and 20 November 2017, and 5 March 2018. |
| --- | --- |

(2)

Description of the measures

| (3) | The alleged aid beneficiaries are Remiks Miljøpark AS, Remiks Næring AS and Remiks Produksjon AS. |
| --- | --- |

(3)

| (4) | Remiks Miljøpark AS is owned 99.99 % by Tromsø municipality. Remiks Miljøpark AS has 100% ownership of Remiks Næring AS and Remiks Produksjon AS. |
| --- | --- |

(4)

| (5) | Remiks Miljøpark AS also has 100 % ownership of Remiks Huholdning AS. This company, however, exclusively performs services for Tromsø municipality, and is not active on the market. Remiks Husholdning AS’s purchases are imputable to the municipality. |
| --- | --- |

(5)

| (6) | From the beginning of 2010 until 1 February 2017, Tromsø municipality purchased waste collection services from Remiks Næring AS, for its own industrial waste. |
| --- | --- |

(6)

| (7) | From the beginning of 2010 and still ongoing, Tromsø municipality has, based on its indirect control, instructed Remiks Husholdning AS to collect the household waste in Tromsø municipality. From 1 February, and still ongoing, Tromsø municipality has instructed Remiks Husholdning AS to also collect Tromsø municipality’s own industrial waste. Remiks Husholdning AS conducts these services on behalf of the municipality on a self-cost basis, meaning it is compensated based on the full costs, not including profits. Remiks Husholdning AS undertakes the collection of the waste, but purchases the necessary waste treatment services from its sister company Remiks Produksjon AS. |
| --- | --- |

(7)

| (8) | In 2010 and 2012, in connection with the establishment of the Remiks Group, Tromsø municipality transferred capital, debt, movables and real estate to the parent company Remiks Miljøpark AS. |
| --- | --- |

(8)

| (9) | The Decision concerns three measures: (i) Tromsø municipality’s purchase of waste collection services from Remiks Næring AS, (ii) Remiks Husholdning AS’ purchase of waste treatment services from Remiks Produksjon AS, and (iii) transactions from Tromsø municipality to the Remiks Group in 2010 and 2012. |
| --- | --- |

(9)

Assessment of the measures

| (10) | For measures (i) and (ii) above, the Authority has doubts as to whether Tromsø municipality and Remiks Husholdning AS, respectively, have paid market price for the services purchased. For measure (iii), the authority has doubts as to whether the transactions from Tromsø municipality to the Remiks Group took place on market terms, in line with the market economy operator principle (‘MEOP’). |
| --- | --- |

(10)

| (11) | If the measures constitute state aid, the obligation under Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, to notify the aid to the Authority before putting it into effect, has not been respected. The state aid would therefore be unlawful. |
| --- | --- |

(11)

| (12) | The Norwegian authorities have not provided arguments substantiating that the measures, to the extent that they constitute state aid, could be considered compatible with the functioning of the EEA Agreement. The Authority therefore has doubts as to the compatibility of all three measures. |
| --- | --- |

(12)

Decision No 085/19/COL of 4 December 2019 to open a formal investigation into potential state aid granted to the Remiks Group related to waste handling services

1.   Summary

| (1) | The EFTA Surveillance Authority (the ‘Authority’) wishes to inform Norway that, having assessed a complaint relating to (i) Tromsø municipality’s purchase of waste collection services from Remiks Næring AS, (ii) Remiks Husholdning AS’ purchase of waste treatment services from Remiks Produksjon AS, and (iii) transactions from Tromsø municipality to the Remiks Group in 2010 and 2012 (the ‘measures’), the Authority has doubts as to whether the measures constitute state aid within the meaning of Article 61(1) of the EEA Agreement, and as to the compatibility of the measures with the EEA Agreement. Therefore, the Authority is required to open a formal investigation procedure (1). |
| --- | --- |

(1)

| (2) | The complainant has also submitted a separate complaint about alleged violations of the public procurement rules. This decision, however, concerns the state aid complaint only, and remains without prejudice to the ongoing investigation concerning public procurement handled by the Authority’s Internal Market Affairs Directorate (2). |
| --- | --- |

(2)

| (3) | The Authority has based its decision on the following considerations. |
| --- | --- |

(3)

2.   Procedure

| (4) | By letter dated 16 August 2016, Norsk Industri, the Federation of Norwegian Industries, (the ‘complainant’) lodged a complaint against the measures (3). |
| --- | --- |

(4)

| (5) | The Norwegian authorities submitted comments to the complaint on 5 October 2016 (4). The Authority requested further information from the Norwegian authorities on 18 January 2017 (5), which was provided by letters dated 28 February (6) and 20 March 2017 (7). |
| --- | --- |

(5)

| (6) | The Authority provided the complainant with a preliminary view on the complaint by letter dated 24 May 2017 (8). The Authority received further information from the complainant on 22 June 2017 (9), and from the Norwegian Authorities on 22 August 2017 (10). |
| --- | --- |

(6)

| (7) | By letter dated 31 August 2017, the Authority requested further information from the Norwegian authorities (11). By letters dated 31 October and 20 November 2017, the Norwegian authorities replied to the information request (12). |
| --- | --- |

(7)

| (8) | By letter dated 16 January 2018, the Authority requested further information from the Norwegian authorities (13), and the Norwegian authorities provided information by letter dated 5 March 2018 (14). |
| --- | --- |

(8)

| (9) | The complainant sent additional information by emails of 14 December 2016; 15 September and 13 November 2017; and 12 January, 31 January and 22 May 2018 (15). |
| --- | --- |

(9)

3.   Background

3.1   
  Historical development

| (10) | In Norway, waste handling services are regulated by the Pollution Control Act (16). The Act makes a distinction between household waste, which is all waste from the municipalities’ households, and industrial waste, which is the waste from public and private enterprises. |
| --- | --- |

(10)

| (11) | Up until 2009, Tromsø municipality organised its waste management services in-house through municipal units and enterprises. In 2009, the municipal council decided to organise the municipality’s waste management in a group of limited liability companies (17). This was done to put an ‘arm’s length’ between the municipality and the activities exposed to competition (18). |
| --- | --- |

(11)

| (12) | In June 2009, the municipal council converted the municipal enterprise Tromsø Miljøpark KF (19), which had previously performed waste management services for Tromsø municipality, into Remiks Miljøpark AS (20). In December 2009, three subsidiaries were established under Remiks Miljøpark AS (21): Remiks Husholdning AS (‘Remiks Husholdning’), Remiks Næring AS (‘Remiks Næring’) and Remiks Produksjon AS (‘Remiks Produksjon’). Collectively the companies are referred to as the ‘Remiks Group’. |
| --- | --- |

(12)

3.2   
  Transactions involving the Remiks Group in 2010 and 2012

| (13) | On 23 June 2010, Tromsø municipal council made the formal decision to transfer the capital and liabilities that were left in the municipal enterprises Tromsø Miljøpark KF and Remiks Tromsø KF to Remiks Miljøpark AS (22). The transactions involved movables, capital, liabilities, and real estate, including the waste handling facility Remiks Miljøpark (the same name as the parent company) where the Remiks Group companies have their business. The assets were converted into share capital in Remiks Miljøpark AS (23). |
| --- | --- |

(13)

| (14) | In 2012, Tromsø municipal council decided to transfer real estate and a loan to Remiks Miljøpark AS, in addition to adjusting the value of the real estate transferred in 2010 (24). In both the preparatory paper (25) and the decision (26), Tromsø municipality specified a requirement for a 9 % return on the investment. |
| --- | --- |

(14)

3.3   
  The current company structure

| (15) | Per November 2019, the Remiks Group is organised as follows (27):






  — | Remiks Miljøpark AS is the parent company in the Remiks Group. It is owned 99,99 % by Tromsø municipality and 0,01 % by Karlsøy municipality (28). It provides services and rents out property to its subsidiaries. |
| --- | --- | --- |

(15)

—

Remiks Miljøpark AS is the parent company in the Remiks Group. It is owned 99,99 % by Tromsø municipality and 0,01 % by Karlsøy municipality (28). It provides services and rents out property to its subsidiaries.

| — | Remiks Husholdning is owned 100 % by Remiks Miljøpark AS. Until 2017, it only collected household waste for Tromsø municipality. As of 1 February 2017, it also collectes Tromsø municipality’s own industrial waste. |
| --- | --- |

—

Remiks Husholdning is owned 100 % by Remiks Miljøpark AS. Until 2017, it only collected household waste for Tromsø municipality. As of 1 February 2017, it also collectes Tromsø municipality’s own industrial waste.

| — | Remiks Næring is owned 100 % by Remiks Miljøpark AS. Remiks Næring specialises in the collection of industrial waste, and offers such services on the market. Until 1 February 2017, it had an agreement with Tromsø municipality for the collection of Tromsø municipality’s own industrial waste. |
| --- | --- |

—

Remiks Næring is owned 100 % by Remiks Miljøpark AS. Remiks Næring specialises in the collection of industrial waste, and offers such services on the market. Until 1 February 2017, it had an agreement with Tromsø municipality for the collection of Tromsø municipality’s own industrial waste.

| — | Remiks Produksjon is owned 100 % by Remiks Miljøpark AS. It provides waste treatment services on the market, primarily to its sister companies. |
| --- | --- |

—

Remiks Produksjon is owned 100 % by Remiks Miljøpark AS. It provides waste treatment services on the market, primarily to its sister companies.

| (16) | Below is an illustration of the Remiks Group’s structure: |
| --- | --- |

(16)

Image 1

3.4   
  Household waste

| (17) | The Norwegian Pollution Control Act, section 27a, first paragraph, defines household waste as waste from private households, including large objects such as furniture, etc. |
| --- | --- |

(17)

| (18) | Under the Pollution Control Act, sections 29 and 30, the municipalities are obliged to collect and have facilities to treat household waste (29). The costs associated with the waste management are to be covered by a fee, levied on the inhabitants (30). The municipal waste fee are to be calculated based on a self-cost principle; covering the total costs of collecting and handling the waste on behalf of the municipality, without generating a profit for the municipality, in accordance with the Waste Regulation, chapter 15 (31). |
| --- | --- |

(18)

| (19) | When Tromsø municipality reorganised its waste handling services and established the Remiks Group in 2010, by way of its control in Remiks Husholdning it instructed Remiks Husholdning to collect the household waste on behalf of the municipality, based on the self-cost principle. Remiks Husholdning collects and sorts the waste. However, it purchases the waste treatment services, consisting of incineration, depositing and recycling, from its sister company Remiks Produksjon. |
| --- | --- |

(19)

3.5   
  Industrial waste

| (20) | The Norwegian Pollution Control Act, section 27a, second paragraph, defines industrial waste as waste from public and private enterprises and institutions. |
| --- | --- |

(20)

| (21) | The Norwegian Pollution Control Act does not oblige the municipalities to organise the collection or handling of industrial waste. Any operator can therefore offer these services on the market. However, all producers of industrial waste are obliged to ensure the proper disposal and handling of their waste. Tromsø municipality, as a producer of industrial waste, is therefore obliged to ensure the proper collection and treatment of its own industrial waste, produced by the different municipal units (kindergartens, hospitals, nursing homes, municipal offices, etc.) (32). |
| --- | --- |

(21)

| (22) | Before 2010, Tromsø municipality ensured the collection of its own industrial waste through a municipal enterprise (33). When Tromsø municipality reorganised its waste handling services and established the Remiks Group, Remiks Næring took over the collection of the municipality’s own industrial waste (34). Therefore, the agreements for the services were not tendered out or renegotiated. From 2010, Remiks Næring merely continued to provide the same services to the municipality as the municipal enterprise had done before the reorganisation. The only thing that changed was the invoicing system, from internal and centralised to external and decentralised. This meant that each municipal unit (municipal offices, kindergarten, etc.) paid for the service from their budget, and Remiks Næring treated them as individual customers (35). |
| --- | --- |

(22)

| (23) | Because of this continuation of the collection services, Remiks Næring and Tromsø municipality never entered into a formal contract for the waste collection services (36). The Norwegian authorities have described the arrangement as an unwritten framework agreement where each municipal unit decided its need for waste collection, and was invoiced separately (37). The Authority will refer to the arrangement between Tromsø municipality and Remiks Næring, regarding the collection of industrial waste, simply as an agreement. |
| --- | --- |

(23)

| (24) | In 2016, Tromsø municipality decided to terminate the agreement with Remiks Næring, and concluded a new framework agreement with Remiks Husholdning for the collection of the municipality’s industrial waste, starting 1 February 2017. The agreement was awarded directly, and based on a self-cost principle, meaning that the compensation covers the full costs, but no profits (38). |
| --- | --- |

(24)

| (25) | Remiks Husholdning foresaw a total price for the services in 2017 of approximately NOK 8,2 million. This was NOK 3,2 million less than the combined total price all the individual municipal units paid to Remiks Næring in 2016 (39). |
| --- | --- |

(25)

4.   Measures covered by the complaint

| (26) | The complainant has complained about three separate measures: |
| --- | --- |

(26)

| (27) | First, alleged overpayment under the agreement between Tromsø municipality and Remiks Næring for collection of industrial waste for the period running from 2010 until 1 February 2017. |
| --- | --- |

(27)

| (28) | Second, alleged overpayment in relation to Remiks Husholdning’s purchase of waste treatment services from its sister company Remiks Produksjon. This agreement has been in force since the establishment of Remiks Husholdning in 2010 and is ongoing. |
| --- | --- |

(28)

| (29) | Third, certain transactions from Tromsø municipality to the Remiks Group in 2010 and 2012, which allegedly were not conducted on market terms. |
| --- | --- |

(29)

5.   Presence of state aid

5.1   
  Introduction

| (30) | Article 61(1) of the EEA Agreement stipulates that:
  ‘Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties be incompatible with the functioning of this Agreement.’ |
| --- | --- |

(30)

‘Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties be incompatible with the functioning of this Agreement.’

| (31) | The qualification of a measure as aid within the meaning of this provision therefore requires the following cumulative conditions to be met: (i) the measure must be granted by the State or through state resources; (ii) it must confer an advantage on an undertaking; (iii) favour certain undertakings (selectivity); and (iv) threaten to distort competition and affect trade. |
| --- | --- |

(31)

5.2   
  Presence of state resources

5.2.1   Introduction

| (32) | For the measure to constitute aid, it must be granted by the State or through state resources. State resources include all resources of the public sector, including resources of intra-state entities (decentralised, federated, regional or other) (40). |
| --- | --- |

(32)

| (33) | The transfer of state resources may take many forms, such as direct grants, loans, guarantees, direct investment in the capital of companies and benefits in kind. A positive transfer of funds does not have to occur; waiving revenue that would otherwise have been paid to the state constitutes a transfer of state resources (41). |
| --- | --- |

(33)

5.2.2   Tromsø municipality’s purchase of industrial waste collection services

| (34) | The remuneration Tromsø municipality paid to Remiks Næring for the collection of industrial waste came from the budget of Tromsø municipality, as does the remuneration which Remiks Husholdning is currently receiving for the same services. The remuneration therefore constitutes state resources. |
| --- | --- |

(34)

5.2.3   Remiks Husholdning’s purchase of waste treatment services from Remiks Produksjon

| (35) | The notion of state aid as expressed in Article 61(1) of the EEA Agreement is to be interpreted widely, therefore it covers not only aid granted directly via the state budget but also compulsory contributions imposed by state legislation. Measures financed through parafiscal charges or compulsory contributions imposed by the State and managed and apportioned in accordance with the provisions of public rules imply a transfer of state resources, even if not administered by the public authorities (42). |
| --- | --- |

(35)

| (36) | Remiks Husholdning is financed through the waste fee, which is fixed in accordance with the principles laid down in section 34 of the Pollution Control Act and chapter 15 of the Waste Regulation. The fee is collected by the municipality and disbursed via the municipal budget (43). Thus, the public authorities determine both the size and use of the fee. Further, its legal basis and the way it is collected indicates that it is under the permanent control of public authorities. The fee must therefore be considered to constitute state resources. This Assessment is in line with the Authority’s conclusion in its decision on the financing of municipal waste collectors in Norway in 2013 (44). |
| --- | --- |

(36)

| (37) | Further, it must be considered whether Remiks Husholdning’s purchase of waste treatment services from Remiks Produksjon is imputable to Tromsø municipality. That is, whether Tromsø municipality must be regarded as having been involved in the adoption of the measures (45). |
| --- | --- |

(37)

| (38) | Remiks Husholdning is indirectly owned by Tromsø municipality and subject to public law, such as the public procurement rules (46). The purchase of waste treatment services from Remiks Produksjon is conducted under the control and instruction of Tromsø municipality, in accordance with the Pollution Control Act. Furthermore, as Remiks Husholdning has been granted an exclusive right to collect the household waste by Tromsø municipality it is not subject to competition on the market, but rather operating under a monopoly (47). |
| --- | --- |

(38)

| (39) | Based on this, Remiks Husholdning’s purchase of waste treatment services from Remiks Produksjon appears imputable to Tromsø municipality, so as to constitute state resources for the purposes of Article 61(1) EEA. |
| --- | --- |

(39)

5.2.4   The transactions involving the Remiks Group in 2010 and 2012

| (40) | If public authorities or public undertakings provide goods or services at a price below market rates, or invest in an undertaking in a manner that is inconsistent with the market economy operator (‘MEO’) principle, this implies foregoing state resources (as well as the granting of an advantage) (48). |
| --- | --- |

(40)

| (41) | Therefore, if the transactions from Tromsø municipality to the Remiks Group in 2010 and 2012 were not conducted on market terms, state resources within the meaning of Article 61(1) of the EEA might have been involved. |
| --- | --- |

(41)

5.3   
  Undertaking

| (42) | Only advantages granted to ‘undertakings’ are subject to state aid law. The concept of an undertaking covers any entity that engages in an economic activity regardless of its status and the way it is financed. Hence, the public or private status of an entity, or the fact a company is partly or wholly publicly owned, has no bearing on whether or not the entity is an ‘undertaking’ (49). |
| --- | --- |

(42)

| (43) | An activity is economic in nature where it consists in offering goods and services on a market (50). The assessment of the activity must be based on the factual evidence, and the question is whether there is a market for the services concerned (51). In this regard, it is relevant to consider whether the entities receive compensation for the services, at what level, and whether they face competition from other undertakings (52). |
| --- | --- |

(43)

| (44) | Remiks Næring has, since its establishment in 2010, been providing services for collection of industrial waste for remuneration in competition with other undertakings. Based on this, Remiks Næring appears to engage in economic activity so as to constitute an undertaking. |
| --- | --- |

(44)

| (45) | Remiks Produksjon offers waste treatment services. The services are offered on the market for remuneration and in competition with other providers. Remiks Produksjon thus appears to engage in economic activity so as to constitute an undertaking. |
| --- | --- |

(45)

| (46) | In relation to the transfers from Tromsø municipality to the Remiks Group in 2010 and 2012, the Group must be considered to form one economic unit (53). An entity which, owning controlling shareholdings in a company, actually exercises that control by involving itself directly or indirectly in the management thereof must be regarded as taking part in the economic activity carried on by the controlled undertaking (54). |
| --- | --- |

(46)

| (47) | The subsidiaries in the Remiks Group are fully owned by Remiks Miljøpark AS, and the Authority does not have any indications that Remiks Miljøpark AS is not involved in the management of its fully owned subsidiaries. The Authority has preliminarily concluded that both Remiks Næring and Remiks Produksjon undertake economic activity (see immediately above). With this, it is also the Authority’s preliminary conclusion that the Remiks Group, as one economic unit, constitutes an undertaking for the purposes of the application of state aid rules, in so far as it is engaged in the economic activities of Remiks Næring and Remiks Produksjon (55). |
| --- | --- |

(47)

5.4   
  Advantage

5.4.1   Introduction

| (48) | The qualification of a measure as state aid requires that it confers an advantage on the recipient. An advantage, within the meaning of Article 61(1) of the EEA Agreement, is any economic benefit that an undertaking could not have obtained under normal market conditions (56). |
| --- | --- |

(48)

| (49) | The measure constitutes an advantage not only if it confers positive economic benefits, but also in situations where it mitigates charges normally borne by the budget of the undertaking. This covers all situations in which economic operators are relieved of the inherent costs of their economic activities (57). |
| --- | --- |

(49)

| (50) | Economic transactions carried out by public bodies are considered not to confer an advantage on the counterpart of the agreement, and therefore not to constitute aid, if they are carried out in line with normal market conditions (58). This is assessed pursuant to the MEO principle (59). Therefore, when public authorities purchase a service, it is generally sufficient, to exclude the presence of an advantage, that they pay market price. |
| --- | --- |

(50)

| (51) | Whether a transaction is in line with market conditions can be established on the basis of a generally accepted, standard assessment methodology, relying on the available objective, verifiable and reliable data, which should be sufficiently detailed and should reflect the economic situation at the time at which the transaction was decided, taking into account the level of risk and future expectations (60). |
| --- | --- |

(51)

5.4.2   Tromsø municipality’s purchase of waste collection services from Remiks Næring

5.4.2.1   Introduction

| (52) | According to the MEO principle, the decision to carry out a transaction must have been taken on the basis of economic evaluations comparable to those which, in similar circumstances, a rational MEO (with characteristics similar to those of the public body concerned) would have carried out to determine the profitability or economic advantage of the transaction (61). When examining compliance with the principle it is only the information known at the time of the decision which is relevant (62). |
| --- | --- |

(52)

| (53) | The purchase of the services through a competitive tender is only one of several methods for ensuring that a transaction does not confer an advantage within the meaning of Article 61(1) of the EEA Agreement. To establish whether a transaction is in line with market conditions, that transaction can be assessed in the light of the terms on which comparable transactions carried out by comparable private operators have taken place in comparable situations (benchmarking) (63) or through a qualified financial assessment (64). |
| --- | --- |

(53)

| (54) | Below, the Authority examines the different lines of reasoning that the complainant has brought forward in support of its assertion that Remiks Næring has been overcompensated. |
| --- | --- |

(54)

5.4.2.2   Benchmarking

| (55) | The complainant alleges that Tromsø municipality has paid disproportionally more than Bodø municipality for similar waste collection services in the same period. |
| --- | --- |

(55)

| (56) | The complainant states that Tromsø municipality in 2016 paid to Remiks Næring five times what Bodø municipality paid to Retura Iris AS for collection of industrial waste. Both Tromsø and Bodø are municipalities in the North of Norway, located by the coast, and with a road network interrupted by fjords. The complainant argues that the two municipalities are comparable in size and population density. While there are 5 100 people working in Tromsø municipality at 160 municipal locations, there are 3 100 people working in Bodø municipality, at 100 locations. On that basis, the complainant argues that the price paid in Tromsø should not exceed a price which is proportionally higher (approximately 60–65 % higher) than that paid in Bodø for similar services (65). |
| --- | --- |

(56)

| (57) | The Norwegian authorities argue that the agreements in Tromsø and Bodø are different in both size and nature, and that the agreement with Bodø municipality therefore cannot serve as an appropriate benchmark. The municipality of Tromsø has paid a fixed price for waste collection services, based on the size of the bins, regardless of the actual weight. Thus, Remiks Næring carried the risk of the municipality disposing of more waste than budgeted for. The fixed price also covered additional services such as picking up waste that had fallen outside of the bins and additional bags placed next to the bins – in addition to educating the public, raising climate and environmental awareness (66). The municipality of Bodø had an agreement where it paid a price based on the actual weight of waste collected, which means the municipality carried the risk of disposing of more waste than budgeted for. Thus, the scope of and risk allocation under the two agreements are different. |
| --- | --- |

(57)

| (58) | Further, the Norwegian authorities argue that the difference in geography, the population density, and municipal locations, including the number of municipal employees, justify different prices for the collection of industrial waste in Tromsø and Bodø. |
| --- | --- |

(58)

| (59) | Based on the above, it is the Authority’s preliminary conclusion that benchmarking against Bodø municipality is not an appropriate way to evaluate the market price for the waste collection services (67). |
| --- | --- |

(59)

5.4.2.3   Negotiating a better price

| (60) | The complainant argues that the municipality of Tromsø is the largest purchaser of waste collection services in the area concerned, and that it therefore should have been able to negotiate a better price (68). |
| --- | --- |

(60)

| (61) | An advantage, within the meaning of Article 61(1) of the EEA Agreement, is any economic benefit, which an undertaking could not have obtained under normal market conditions (69). To establish whether a transaction complies with market conditions, the transaction can be assessed in the light of the terms under which comparable transactions carried out by a comparable private operator would have taken place in a comparable situation (70). |
| --- | --- |

(61)

| (62) | The Norwegian authorities have provided documentation indicating that a number of private undertakings have purchased comparable products at the same or a higher price than Tromsø municipality (71). However, it is not clear whether the list includes the majority of Remiks Næring’s other customers, or only a smaller selection. The Authority invites the Norwegian authorities to provide further information on the proportion of other customers that have purchased comparable products to a price equal to or higher that paid by Tromsø municipality. |
| --- | --- |

(62)

5.4.2.4   Increase in remuneration during the contract period

| (63) | The complainant further points out that the total compensation paid to Remiks Næring for the relevant services increased from NOK 7,7 million in 2010 to NOK 11,4 million in 2016, so almost 50 % over six years. |
| --- | --- |

(63)

| (64) | The Norwegian authorities have provided documentation showing that the number of inhabitants and municipal employees has increased in the same period, and that the municipality has made several investments in new municipal buildings and units, which has led to an increase in the production of waste. The increase in remuneration to Remiks Næring is also mirrored in a corresponding increase in operating expenditure (72). |
| --- | --- |

(64)

| (65) | The Authority, however, has doubts as to whether the information provided can explain a 50 % increase in price over a period of six years. The Authority therefore invites the Norwegian authorities to provide further information on the basis for the increases in the total remuneration paid. |
| --- | --- |

(65)

5.4.2.5   Difference compared to the price budgeted by Remiks Husholdning for 2017

| (66) | As of 1 February 2017, Tromsø municipality terminated the agreement with Remiks Næring, and instructed Remiks Husholdning to collect the municipal industrial waste on an in-house basis, at a price not exceeding the costs (self-cost). Remiks Husholdning estimated budget for 2017 was NOK 8,2 million, which is NOK 3,2 million less than the NOK 11,4 million that Remiks Næring received for the services in 2016. |
| --- | --- |

(66)

| (67) | The complainant argues that, provided the costs for the waste collection services were the same in 2016 and 2017, Remiks Næring would have had a profit of NOK 3,2 million for the services it provided in 2016. This would entail a margin on these services of 30 %, which is considerably higher than the market standard, which the complainant estimates at 0–8 % (73). |
| --- | --- |

(67)

| (68) | The Norwegian authorities argue that the services provided by Remiks Næring under the 2016 agreement and the services provided by Remiks Husholdning under the 2017 agreement are materially different. Under the agreement with Remiks Næring, Tromsø municipality had a fixed price agreement whereby Remiks Næring carried the risk of the municipality disposing of more waste than budgeted for (74). Under the self-cost agreement with Remiks Husholdning, Tromsø municipality entered into an agreement based on the actual weight disposed, which means that the municipality carries the risk of disposing of more waste than budgeted for. The Norwegian authorities argue that the allocation of risk under the two agreements is thus not comparable, and justifies different prices. |
| --- | --- |

(68)

| (69) | Further, the Norwegian authorities argue that Remiks Husholdning has been able to take advantage of synergies and efficiency gains when coordinating the collection of industrial waste with the collection of household waste, leading to lower overall costs. It is also argued that Remiks Husholdning is currently at its most efficient, and therefore able to take full advantage of its resources. In the view of the Norwegian authorities, this justifies the difference in price between the remuneration paid to Remiks Næring in 2016 and Remiks Husholdning’s budget for 2017. |
| --- | --- |

(69)

| (70) | While the Norwegian authorities have provided explanations seeking to justify the difference in remuneration in 2016 and 2017, the Authority has not been provided with documentation underlying these explanations. The Authority therefore invites the Norwegian authorities to provide documentation evidencing the efficiency gains and synergies said to justify the difference. |
| --- | --- |

(70)

5.4.2.6   Conclusion

| (71) | Based on the above, the Norwegian authorities have not at present time provided sufficient evidence showing that the price paid to Remiks Næring for collection of industrial waste, complies with the MEO principle. |
| --- | --- |

(71)

| (72) | In light of the above, and in particular in light of the absence of sufficient evidence supporting that the price paid for the collection of industry waste in the period from 2010 to 1 February 2017 was determined in line with normal market conditions, the Authority has formed the preliminary view that Remiks Næring may have received an advantage, within the meaning of Article 61(1) of the EEA Agreement. |
| --- | --- |

(72)

5.4.3   Remiks Husholdning’s purchase of waste treatment services from Remiks Produksjon

| (73) | The Norwegian authorities argue that it is impossible for Remiks Husholdning to purchase waste treatment services from any other undertaking than Remiks Produksjon. The reason being that for Remiks Husholdning to purchase waste treatment services from such a third party, the waste that goes through Remiks Husholdning’s optical sorting machine would have to be transported out of Remiks Miljøpark, through Remiks Produksjon’s business area. Remiks Produksjon has not consented to allowing third parties to enter its business area, let alone transport waste through it. This explains why Remiks Husholdning has been purchasing waste treatment services from Remiks Produksjon without tendering out the services (75). |
| --- | --- |

(73)

| (74) | The complainant intimates that the purchase of these services, without a tender, has led to Remiks Husholdning paying a price above market price for waste treatment services. |
| --- | --- |

(74)

| (75) | The Norwegian authorities argue that the services Remiks Husholdning purchase from Remiks Produksjon are provided on market terms and in accordance with the arm’s length principle in the Limited Liability Companies Act, section 3-9 (76). |
| --- | --- |

(75)

| (76) | In determining an appropriate price for Remiks Husholdning’s purchase of waste treatment services from Remiks Produksjon, the two parties looked at the price Remiks Næring paid to Remiks Produksjon for waste treatment services. Remiks Husholdning and Remiks Næring considered that the services Remiks Husholdning purchased were comparable in type and volume to those purchased by Remiks Næring, and that the costs for treating household and industrial waste are similar. |
| --- | --- |

(76)

| (77) | The Authority is, however, not convinced that the prices paid by another company in the same group is an appropriate benchmark for establishing market price. |
| --- | --- |

(77)

| (78) | In light of the above, and in particular in light of the absence of evidence supporting that the compensation paid to Remiks Produksjon did not lead to overcompensation, the Authority has formed the preliminary view that Remiks Produksjon may have received an advantage within the meaning of Article 61(1) of the EEA Agreement. |
| --- | --- |

(78)

| (79) | The Authority invites the Norwegian authorities to provide documentation to substantiate that the compensation paid to Remiks Produksjon in line with normal market conditions (77). |
| --- | --- |

(79)

5.4.4   Transactions to the Remiks Group in 2010 and 2012

| (80) | The complainant argues that Tromsø municipality did not require a sufficient return on the transactions from Tromsø municipality to the Remiks Group in 2010 and 2012. |
| --- | --- |

(80)

| (81) | With the establishment of the Remiks Group in 2010, Tromsø municipality transferred (a) capital, (b) debt, (c) movables and (d) real estate to the Remiks Group (78). The assets were converted into share capital. The preparatory paper drafted for the purpose of the transactions (79) underlined the importance of complying with the MEO principle. However, it is not clear how the municipality actually ensured compliance with the principle. |
| --- | --- |

(81)

| (82) | In 2012, Tromsø municipality transferred (a) real estate and (b) debt to Remiks Miljøpark AS, in addition to (c) adjusting the value of the real estate transferred in 2010 (80). The Tromsø municipal board decided to require a 9 % return. The preparatory paper prepared for the purpose of the transactions underlined the need to determine an appropriate level of return on the basis of the MEO principle. The preparatory paper included a discussion on whether the fact that only 40 % of the Remiks Group’s activities are conducted in a competitive market, while the remaining 60 % are activities for which the municipality cannot obtain a profit, is relevant for the MEO principle, but does not seem to reach a conclusion on this point (81). The preparatory paper found a 9 % return appropriate (82), but did not set out the economic assessment explaining why. |
| --- | --- |

(82)

| (83) | The complainant further argues that the 9 % level of return set in 2012 was determined based on only 40 % of the Remiks Group’s turnover originating from the group’s commercial activities (Remiks Næring and Remiks Produksjon). According to the complainant, the division between commercial and non- commercial activity shifted, and in 2016, 58 % of the turnover was linked to the commercial activities in Remiks Næring and Remiks Produksjon (83). Allegedly, as the conditions for setting the relevant rate of return changed, Tromsø municipality should have adjusted the level of return (84). |
| --- | --- |

(83)

| (84) | Whether a transaction complies with the MEO principle must be examined on an ex ante basis, having regard to the information available at the time the transactions were decided. The relevant evidence is the information which was available, and the developments which were foreseeable, at the time when the investment decision was made (85). |
| --- | --- |

(84)

| (85) | The question is therefore whether, based on the information available at the time, a rational market economy operator (with characteristics similar to Tromsø municipality) would have carried out similar transactions. |
| --- | --- |

(85)

| (86) | In relation to the transactions referred to in paragraph (81) above, the Authority invites the Norwegian authorities to provide further information on the transfers and how these comply with the MEO principle. |
| --- | --- |

(86)

| (87) | In relation to the transactions referred to in paragraph (82) above, the Authority invites the Norwegian authorities to provide documentation for, and further elaborate on, the assessments forming the basis for an assessment of compliance with the MEO principle, and the relevant level of return. |
| --- | --- |

(87)

5.5   
  Selectivity

| (88) | To be characterised as state aid within the meaning of Article 61(1) of the EEA Agreement, the measure must also be selective in that it favours ‘certain undertakings or the production of certain goods’. Not all measures which favour economic operators fall under the notion of aid, only those which grant an advantage in a selective way to certain undertakings, categories of undertakings or to certain economic sectors. |
| --- | --- |

(88)

| (89) | The purchase of services from Remiks Næring and Remiks Produksjon are specific transactions benefitting the two undertakings respectively. |
| --- | --- |

(89)

| (90) | Similarly, the transfers to the Remiks Group are specific transactions benefitting the company group. |
| --- | --- |

(90)

| (91) | Accordingly, the alleged measures must be considered selective in the sense of Article 61(1) of the EEA Agreement. |
| --- | --- |

(91)

5.6   
  Effect on trade and distortion of competition

| (92) | In order to constitute state aid within the meaning of Article 61(1) of the EEA Agreement, the measures must be liable to distort competition and affect trade between EEA States. |
| --- | --- |

(92)

| (93) | Measures granted by the State are considered liable to distort competition when they are liable to improve the position of the recipient compared to other undertakings with which it competes. A distortion of competition within the meaning of Article 61(1) of the EEA Agreement is generally found to exist when the State grants a financial advantage to an undertaking in a liberalised sector where there is, or could be, competition (86). |
| --- | --- |

(93)

| (94) | Public support may be liable to distort competition even if it does not help the recipient undertaking to expand or gain market share. It is enough that the aid allows it to maintain a stronger competitive position than it would have had if the aid had not been provided (87). |
| --- | --- |

(94)

| (95) | To the extent that the relevant measures have not been carried out in line with normal market conditions, they have conferred an advantage on the relevant undertakings which may have strengthened the undertakings’ position compared to other undertakings competing with them. |
| --- | --- |

(95)

| (96) | The measures must also be liable to affect trade between EEA States. Where state aid strengthens the position of an undertaking compared with other undertakings competing in intra-EEA trade, this is assumed to have effect on trade between EEA States (88). |
| --- | --- |

(96)

| (97) | The Authority has previously found that public support to waste collection services in Norway is liable to distort competition and affect trade between EEA States (89). Waste collection and treatment is increasingly an international industry. In 2017, Norway exported 1,7 million tons of waste (90). The practice of tendering out waste services also means that undertakings from other EEA States can compete for waste handling contracts in other municipalities (91). |
| --- | --- |

(97)

| (98) | The competitive situation is also highlighted in one of the preparatory papers in relation to the establishment of the Remiks Group in 2010. The paper notes an increasing number of undertakings competing on the markets for collection and handling of industrial waste, and highlights that the competition includes both national companies and companies with international owners (92). |
| --- | --- |

(98)

| (99) | Thus the Authority cannot exclude that the measures are liable to distort competition and affect trade within the EEA. |
| --- | --- |

(99)

5.7   
  Conclusion

| (100) | Based on the information provided by the Norwegian authorities and the complainant, the Authority cannot exclude that the measures described above may entail state aid within the meaning of Article 61(1) of the EEA Agreement. |
| --- | --- |

(100)

6.   Procedural requirements

| (101) | Pursuant to Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (‘Protocol 3’): ‘The EFTA Surveillance Authority shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. [...] The State concerned shall not put its proposed measures into effect until the procedure has resulted in a final decision.’ |
| --- | --- |

(101)

| (102) | The Norwegian authorities did not notify the measures before putting them into effect. The Authority therefore concludes that, if the measures constitute state aid, the Norwegian authorities will not have respected their obligations pursuant to Article 1(3) of Part I of Protocol 3. |
| --- | --- |

(102)

7.   Compatibility of the aid measure

| (103) | The Norwegian authorities have not provided any arguments substantiating why the measures, if they were to constitute state aid, should be considered compatible with the functioning of the EEA Agreement. The Authority has also not identified any clear grounds for compatibility. |
| --- | --- |

(103)

| (104) | Thus, if the measures constitute state aid, the Authority has doubts as to their compatibility with the functioning of the EEA Agreement |
| --- | --- |

(104)

8.   Conclusion

| (105) | As set out above, the Authority has doubts as to whether the measures constitute state aid within the meaning of Article 61(1) of the EEA Agreement, and as to their compatibility with the functioning of the EEA Agreement. |
| --- | --- |

(105)

| (106) | Consequently, and in accordance Article 4(4) of Part II of Protocol 3, the Authority hereby opens the formal investigation procedure provided for in Article 1(2) of Part I of Protocol 3. The decision to open a formal investigation procedure is without prejudice to the final decision of the Authority, which may conclude that the measures do not constitute state aid, or are compatible with the functioning of the EEA Agreement. |
| --- | --- |

(106)

| (107) | The Authority, acting under the procedure laid down in Article 1(2) of Part I of Protocol 3, invites the Norwegian authorities to submit, by 6 January 2020, their comments and to provide all documents, information and data needed for the assessment of the measures in light of the state aid rules. |
| --- | --- |

(107)

| (108) | The Norwegian authorities are requested to immediately forward a copy of this decision to the Remiks Group. |
| --- | --- |

(108)

| (109) | If this letter contains confidential information which should not be disclosed to third parties, please inform the Authority by 13 December 2019, identifying the confidential elements and the reasons why the information is considered to be confidential. In doing so, please consult the Authority’s Guidelines on Professional Secrecy in State Aid Decisions (93). If the Authority does not receive a reasoned request by that deadline, you will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter on the Authority’s Internet: http://www.eftasurv.int/state-aid/state-aid-register/. |
| --- | --- |

(109)

For the EFTA Surveillance Authority

Bente ANGELL-HANSEN

President

Responsible College Member

Frank J. BÜCHEL

College Member

Högni KRISTJÁNSSON

College Member

Carsten ZATSCHLER

Countersigning as Director,

Legal and Executive Affairs

---

(1)  Reference is made to Article 4(4) of Part II of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.

1

(2)  Case No 78085.

2

(3)  Document No 814858.

3

(4)  Document No 821154.

4

(5)  Document No 840687.

5

(6)  Document No 844198.

6

(7)  Document No 848555.

7

(8)  Document No 854974.

8

(9)  Document No 862433.

9

(10)  Document No 870978.

10

(11)  Document No 870978.

11

(12)  Documents No 880582 and 884931.

12

(13)  Document No 882703.

13

(14)  Document No 901145.

14

(15)  Documents No 831575, 873959, 882172, 896066, 895954 and 914528.

15

(16)  Forurensningsloven, LOV-1981-03-13-6.

16

Forurensningsloven

(17)  Attachments 2, 3 and 4b to letter dated 3.5.18, Documents No 901215, 901211 and 901203; Tromsø municipality’s letter dated 31 October 2017, Document No 880582, and Attachment 7 to the letter, Document No 880592.

17

(18)  Preparatory papers from Tromsø municipality’s administration to the municipality council, Attachment 2 to letter dated 5.3.18, Document No 901215.

18

(19)  A municipal enterprise (in Norwegian: kommunalt foretak, shortened KF) is an administrative branch of the central municipality, and not a separate legal entity. Municipal enterprises are regulated by the Local Government Act chapter 11.

19

kommunalt foretak

(20)  Tromsø municipality’s letter, dated 31 October 2017, Document No 880582, and Attachments 6 and 7 to the letter, Documents No 880590 and 880592.

20

(21)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145, and Attachment 4 to the letter, Document No 901219, and Tromsø municipality’s letter dated 31 October 2017, Document No 880582 and Attachment 7 to the letter, Document No 880592.

21

(22)  Attachment 8a to Tromsø municipality’s letter dated 5 March 2018, Document No 901189. The transfers were decided on in 2010, but backdated to the establishment of Remiks Miljøpark AS in 2009.

22

(23)  Attachments 4, 4c and 8a to Tromsø municipality’s letter dated 5 March 2018, Documents No 901219, 901205 and 901189.

23

(24)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145, and attachments 8, 8b, 8c, 8d and 9 to the letter, Documents No 901183, 901181, 901177, 901179 and 901175.

24

(25)  In Norwegian: saksfremlegg.

25

saksfremlegg

(26)  Attachment 9 to the letter from Tromsø municipality, dated 5 March 2018, Document No 901175.

26

(27)  Based on information obtained at www.purehelp.no 21 November 2019.

27

(28)  The 0,01 % ownership by Karlsøy municipality seems to be related to intentions that Tromsø and Karlsøy would cooperate on waste handling, but this seems not to have materialised. See letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

28

(29)  This means that any private operator needs an explicit permission from the municipality, in order to provide the service.

29

(30)  The Pollution Control Act, section 34. The fees can be secured through a statutory charge pursuant to the Mortgage Act (panteloven, LOV-1980-02-08-2).

30

panteloven

(31)  The Waste Regulation (avsfallsforskriften, FOR-2004-06-01-930), chapter 15.

31

avsfallsforskriften

(32)  The Pollution Control Act, section 32, first paragraph.

32

(33)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

33

(34)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

34

(35)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

35

(36)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

36

(37)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145, and letter of 31 October 2017, Document No 880582.

37

(38)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145, and attachment 16 to the letter, Document No 901161.

38

(39)  This is based on calculations conducted by the complainant in letter from the complainant dated 22.6.17, Document No 862433.

39

(40)  See the Authority’s Guidelines on the notion of state aid (‘NoA’) (OJ L 342, 21.12.2017, p. 35), and EEA Supplement No 82, 21 December 2017, p. 1, para. 48.

40

(41)  NoA, para. 51.

41

(42)  See NoA, para. 58; Decision No 306/09/COL of 8 July 2009 on the Norwegian Broadcasting Corporation, section 1.2.1, and judgment in Italy v Commission, 173/73, EU:C:1974:71, para. 16.

42

Italy

Commission

(43)  The fifth paragraph of section 34 of the Pollution Control Act.

43

(44)  Decision No 91/13/COL of 27 February 2013, on the financing of municipal waste collectors, para. 26.

44

(45)  Judgment in France v Commission, C-482/99, EU:C:2002:294, para. 52.

45

France

Commission

(46)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145.

46

(47)  Letter from Tromsø municipality, dated 5 March 2018, Document No 901145. See also NoA, para. 43.

47

(48)  NoA, para. 52.

48

(49)  Judgment in Congregación de Escuelas Pías Provincia Betania, C-74/16, EU:C:2017:496, para. 42.

49

Congregación de Escuelas Pías Provincia Betania

(50)  NoA, section 2.1.

50

(51)  Judgment in Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven v Commission, T-696/17, EU:T:2019:652, para. 56.

51

Havenbedrijf Antwerpen and Maatschappij van de Brugse Zeehaven

Commission

(52)  Case E-29/15 Sorpa [2016] EFTA Ct. Rep. 825, paras 51–64.

52

Sorpa

(53)  NoA, para. 11.

53

(54)  Judgment in AceaElectrabel Produzione v Commission, C-480/09 P, EU:C:2010:787, para. 49.

54

AceaElectrabel Produzione

Commission

(55)  NoA, para. 11.

55

(56)  NoA, para. 66.

56

(57)  NoA, para. 68.

57

(58)  Judgment in SFEI and others, EU:C:1996:285, C-39/94, paras 60–62.

58

SFEI and others

(59)  NoA, para. 76.

59

(60)  NoA, para. 101.

60

(61)  NoA, para. 79.

61

(62)  NoA, para. 78.

62

(63)  NoA, paras 98–100.

63

(64)  NoA, paras 101–105.

64

(65)  The Complaint, dated 15 August 2016, Document No 814858, and Annexes IV–VII to the complaint, Documents No 818909–818911.

65

(66)  Letter from Remiks Group, dated 30 October 2017, Document No 880602.

66

(67)  See also the Authority’s letter dated 24 May 2017, Document No 854974.

67

(68)  Letter from the complainant, dated 15 December 2016, Document No 831575.

68

(69)  NoA, para. 66.

69

(70)  NoA, para. 98.

70

(71)  Letter from Remiks Næring, dated 29 September 2016, Document No 821156.

71

(72)  Letter from Tromsø Municipality, dated 5 March 2018, Document No 901145.

72

(73)  Letter from the complainant, dated 13 November 2017, Document No 882862.

73

(74)  Further explained in section 7.4.2.2.

74

(75)  Letter from Tromsø municipality, dated 5.3.18, Document No 901145.

75

(76)  Lov om aksjeselskaper, LOV-1997-06-13-44.

76

Lov om aksjeselskaper

(77)  NoA, para. 74.

77

(78)  Attachment 8a to letter dated 5 March 2018, Document No 901189.

78

(79)  Attachments 4, 4a, 4b and 4c to the letter from Tromsø municipality dated 5 March 2018, Documents No 901219, 901213, 901203 and 901205.

79

(80)  Attachment 9 to letter dated 5 March 2018, Document No 901175.

80

(81)  The same assessment is included in the preparatory paper in relation to the 2010 transfer, Attachment 4 to the letter from Tromsø municipality dated 5 March 2018, Document No 901219.

81

(82)  Attachments 8, 8b, 8c, 8d to letter dated 5.3.18, Documents No 901183, 901181, 901177 and 901197.

82

(83)  Note that some of the revenues in Remiks Produksjon stem from treating household waste from Remiks Husholdning. The complainant has not explained whether or how this affects the calculations.

83

(84)  The complainant’s letter dated 22 May 2018, Document No 914528.

84

(85)  Judgment in Commission v EDF, C-124/10 P, EU:C:2012:318, paras 83–85 and 105; judgment in France v Commission, C-482/99, EU:C:2002:294, paras 71–72.

85

Commission

EDF

France

Commission

(86)  NoA, para. 187.

86

(87)  NoA, para. 189.

87

(88)  Judgment in Eventech, C-518/13, EU:C:2015:9, para. 66.

88

Eventech

(89)  Decision No 91/13/COL of 27 February 2013, on the financing of municipal waste collectors, para. 41.

89

(90)  Report from the Nordic Competition Authorities, Competition in the waste management sector, section 3.2.4:

90

https://konkurransetilsynet.no/wp-content/uploads/2018/08/Nordic-Report-2016-Waste-Management-Sector.pdf

(91)  Judgment in Altmark, C-280/00, EU:C:2003:415, paras 78–79.

91

Altmark

(92)  Preparatory paper 29 April 2009, attachment 2 to letter dated 5 March 2018, Document 901215. The Authority’s office translation.

92

(93)  OJ L 154, 8.6.2006, p. 27 and EEA Supplement No 29, 8 June 2006, p. 1.

93

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| 6.2.2020 | EN | Official Journal of the European Union | C 40/16 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/16

---

Decision No 86/19/COL of 5 December 2019 to open a formal investigation into alleged state aid granted to Gagnaveita Reykjavíkur

Invitation to submit comments pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice on state aid issues

(2020/C 40/03)

By means of the above referenced Decision, reproduced in the authentic language on the pages following this summary, the EFTA Surveillance Authority notified the Icelandic authorities of its decision to initiate proceedings pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice concerning the abovementioned measure.

Interested parties may submit comments on the measure in question within one month of the date of publication to:

| EFTA Surveillance Authority |
| --- |
| Registry |
| Rue Belliard 35 |
| 1040 Bruxelles/Brussel |
| BELGIQUE/BELGIË |
| registry@eftasurv.int |

EFTA Surveillance Authority

Registry

Rue Belliard 35

1040 Bruxelles/Brussel

BELGIQUE/BELGIË

registry@eftasurv.int

The comments will be communicated to the Icelandic authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

Summary

Procedure

On 26 October 2016, the Authority received a complaint from Icelandic telecommunications company Síminn hf. concerning alleged state aid granted by Orkuveita Reykjavíkur (‘OR’) to its subsidiary Gagnaveita Reykjavíkur (‘GR’). The Authority received additional information and comments from the complainant by letters and emails dated 23 November 2016, 16 January 2017, 28 March 2017, 1 January 2018, 20 April 2018, 21 September 2018, 26 March 2019 and 13 September 2019.

Following requests, the Authority received information from the Icelandic authorities by letters dated 7 February 2017, 22 June 2017, 25 May 2018 and 4 June 2019.

Description of the measures

The complaint concerns OR’s investments in broadband from 1999, when GR’s predecessor Lina.Net was established, until today. However, the complaint predominantly concerns the period from 1 January 2007 onwards, following the establishment of GR. In particular, the complaint concerns alleged state aid granted by OR to GR through various means, such as capital injections and lending that was not on market terms.

OR was established on 1 January 1999 as a public undertaking with the decision of the City Council of Reykjavík to merge the operations of the electricity and heat utilities owned by the city. OR is owned by three Icelandic municipalities; (i) the City of Reykjavík (93.5%), (ii) the municipality of Akranes (5.5%), and (iii) the municipality of Borgarbyggð (1%). Five members of OR’s board of directors are appointed by the City Council of Reykjavík, and one is appointed by the Municipality Council of Akranes

GR is a telecommunications company established in 2007. GR was established as an independent legal entity in order to comply with requirements from the Icelandic Post and Telecom Administration (‘PTA’) on separation between the competitive and non-competitive operations of OR. GR is fully owned by OR. The purpose of GR, according to its articles of association, is the operation of a telecommunications and data transmission network.

GR is a registered operator (data transmission and service) under the Electronic Communications Act No 81/2003 (‘the EC Act’). Article 36 of the EC Act is meant to ensure that competitive telecommunication operations are not subsidised through income from operations that are protected by exclusive rights or by other means.

In accordance with Article 36 of the EC Act, the PTA ensures that revenues stemming from non-competitive sectors do not subsidise operations in the competitive sector of telecommunications. Therefore, the PTA is entrusted with scrutinising OR’s investments in the telecommunications market and the business relations between GR and OR. Such investigations can start at the PTA’s own initiative or through complaints from interested parties. GR is also obligated to notify specific measures to the PTA.

From 2006 until 2019, the PTA has adopted nine formal decisions regarding the financial separation of OR and GR. The PTA’s investigations included a review of GR’s business plan, which has to be renewed annually, in accordance with actual financial data. In its review, the PTA for example checks whether the rate of return for the investor (OR) is in conformity with the telecom market in general, and looks at the capital structure and whether prices are on market terms between OR and GR.

In three cases, the PTA has established concrete infringements of Article 36 of the EC Act. In two of those cases, the PTA ordered that the measures be clawed back and in the third case the PTA did not order any clawback of the advantages

The Icelandic authorities maintain that in all its relations with GR, OR has acted in accordance with the market economy operator (‘MEO’) test and that no aid has been granted to GR. In that regard, the Icelandic authorities highlight that all of the measures complained of concerning the financial relations between OR and GR, have been assessed by the PTA on the basis of Article 36 of the EC Act. According to the Icelandic authorities, the test applied by the PTA is comparable to the criterion applied by the Authority, when determining whether a measure is on market terms (i.e. the MEO test). The Icelandic authorities also noted that the Authority has already dismissed allegations by the complainant as regards OR’s investments in Lina.net in its Decision No 300/11/COL of 5 October 2011.

Assessment of the measures

In light of inter alia the legal status of OR, the company’s partnership agreement and the composition of its Board, the Authority is unable to exclude that the measures are imputable to the State, and that they entail the transfer of state resources if and to the extent they confer advantages on GR.

Moreover, although GR does not sell its own services over its fibre optic network, it offers neutral and open network access to all interested telecommunication providers. The Authority considers that the provision of network access for a fixed price to third-party service providers constitutes an economic activity, and that GR therefore appears to operate as an undertaking within the meaning of Article 61(1) of the EEA Agreement.

It is the Authority’s preliminary view, considering the decisional practice of the PTA under Article 36 of the EC Act on the financing of GR and the level of scrutiny involved in the assessment of the various measures, that the test applied by the PTA under Article 36 generally ensures that all transactions between GR and OR, or other related companies, are on market terms. The PTA’s approach may not be identical to the MEO assessment that would be carried out by the Authority under the EEA state aid rules, but it nonetheless ensures the same outcome, i.e. it prevents transactions that are not on market terms. Therefore, at this stage the Authority is of the preliminary view that the PTA provides an assessment equivalent to the Authority’s MEO assessment.

Where the PTA finds ex post infringements of Article 36 of the EC Act, i.e. where it has found that a particular transaction was not on market terms, it has the power, to instruct the parties to eliminate any potential advantage through the adoption of relevant measures. However, for the PTA to order the clawback of an advantage, the incompatible measure must be clearly defined and incontestable, e.g. a particular monetary sum, a condition in a loan agreement, etc. Moreover, when the PTA has ordered the clawback of advantages granted to GR it has not required those advantaged to be recovered with interest.

There are three examples of the PTA having established concrete infringements of Article 36 of the EC Act. In two of those cases, the PTA ordered that the measures be clawed back, and in the third case the PTA did not order any clawback of the advantages. The Authority found that the measures assessed by the PTA in those cases had conferred advantages upon GR which it would not have obtained under normal market conditions. Moreover, those advantages had not been fully clawed back from GR.

Therefore, it is the Authority’s preliminary view that GR has obtained an advantage within the meaning of Article 61(1) of the EEA Agreement by; (i) not paying market interest on an advantage it obtained through a temporary suspension of interest payments, (ii) receiving funds indirectly from OR for the layout of a fibre optic cable network in Ölfus Municipality, (iii) receiving short-term lending from OR, and (iv) through the inclusion of a condition in GR’s loan agreements with private lenders on OR’s continued majority ownership in GR.

The Authority’s preliminary view is that these measures are selective as they are individual measures addressed only to GR. Furthermore, it appears that the measures are liable to distort competition and affect trade within the EEA.

If the measures constitute state aid, the obligation, contained in Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, to notify the aid to the Authority before putting it into effect has not been respected. Such state aid would be unlawful.

The Icelandic authorities have not provided arguments substantiating that the measures, to the extent that they constitute state aid, could be considered compatible with the functioning of the EEA Agreement. The Authority therefore has doubts as to the compatibility of all four measures.

Decision No 86/19/COL of 5 December 2019 to open a formal investigation into alleged state aid granted to Gagnaveita Reykjavíkur

1   Summary

| (1) | The EFTA Surveillance Authority (‘the Authority’) wishes to inform the Icelandic authorities that some measures covered by the complaint related to Gagnaveita Reykjavíkur (‘GR’) might entail state aid within the meaning of Article 61(1) of the EEA Agreement. Furthermore, the Authority has doubts concerning the compatibility of these measures with the functioning of the EEA Agreement. Therefore, the Authority is required to open a formal investigation procedure into these measures (*) (1). |
| --- | --- |

(1)

| (2) | The Authority has based its decision on the following considerations. |
| --- | --- |

(2)

2   Procedure

| (3) | By a letter dated 26 October 2016 (2), Síminn hf. (‘the complainant’) made a complaint regarding alleged state aid granted by Orkuveita Reykjavíkur (‘OR’) to its subsidiary GR. By letter dated 7 November 2016, the Authority acknowledged receipt of the complaint (3). By email of 23 November 2016, the complainant submitted further information (4). |
| --- | --- |

(3)

| (4) | By letter dated 28 November 2016 (5), the Authority forwarded the complaint and the additional information received to the Icelandic authorities, and invited them to submit information and observations. By email dated 16 January 2017, the Authority received additional information from the complainant (6). By letter dated 7 February 2017, the Icelandic authorities submitted their comments to the Authority (7).The complainant submitted further information by email of 28 March 2017 (8). |
| --- | --- |

(4)

| (5) | On 7 June 2017, the Authority discussed the complaint with the Icelandic authorities at the annual package meeting in Reykjavík. On 22 June 2017, the Icelandic authorities provided the Authority with copies of various decisions of the Post and Telecom Administration in Iceland (‘PTA’), concerning the financing of GR (9). |
| --- | --- |

(5)

| (6) | On 25 September 2017, the Authority met with the complainant, at its request, in Reykjavík. On 1 January 2018, the complainant submitted further comments (10). |
| --- | --- |

(6)

| (7) | By letter dated 13 March 2018 (11), the Authority informed the complainant about its preliminary assessment that the financing of GR did not raise concerns concerning potential state aid within the meaning of Article 61(1) of the EEA Agreement. By letter dated 20 April 2018 (12), the complainant submitted its response to the Authority’s preliminary assessment. |
| --- | --- |

(7)

| (8) | By letter dated 27 April 2018 (13), the Authority forwarded the complainant’s response and additional information received to the Icelandic authorities, and invited them to submit their observations. By letter dated 25 May 2018 (14), the Icelandic authorities submitted their comments. |
| --- | --- |

(8)

| (9) | On 6 June 2018, the Authority discussed the complaint with the Icelandic authorities and received a presentation from the PTA at the annual package meeting in Reykjavík (15). By letter dated 21 September 2018 (16), the complainant submitted further information. |
| --- | --- |

(9)

| (10) | By letter dated 26 March 2019 (17), the Authority received additional information concerning new developments from the complainant. On 29 April 2019, the Authority requested additional information and clarifications from the Icelandic authorities (18). By letter dated 4 June 2019 (19), the Icelandic authorities replied to the information request and provided the requested information and clarifications. Finally, the complainant submitted additional comments and information by letter dated 13 September 2019 (20).The complaint |
| --- | --- |

(10)

2.1   
  The complainant - Síminn hf.

| (11) | The complainant is a telecommunications company which provides communication solutions to private and corporate clients in Iceland. It offers a range of services, such as: (i) mobile services on its 2G/3G/4G network, (ii) fixed line telephony, (iii) fixed broadband, and (iv) television. The complainant also offers communications and IT solutions for companies of all sizes. The complainant’s subsidiary, Míla ehf., owns and operates a telecommunications network covering the entire country, which builds mostly on fibre optic cables, but also on copper lines and microwave connections. Míla sells its services at a wholesale level to companies with a telecommunications licence in Iceland. |
| --- | --- |

(11)

2.2   
  Scope of the complaint

| (12) | The complaint concerns OR’s investments in fixed broadband from 1999, when GR’s predecessor Lina.Net was established, until today. However, the complaint predominantly concerns the period from 1 January 2007 onwards, following the establishment of GR. In particular, the complaint concerns alleged state aid granted by OR to GR through various means, such as capital injections and lending that was not on market terms. |
| --- | --- |

(12)

| (13) | Moreover, the complaint concerns the terms of loans GR has obtained from [...]. According to the complainant, the interest rates on GR’s loans are not on market terms that reflect the credit risk inherent in an undertaking such as GR, with a very high debt to EBITDA ratio (21). The complainant maintains that the interest rates offered to GR are directly connected to its ownership, as no market lender would have offered GR such rates without a direct link to its public ownership. |
| --- | --- |

(13)

2.3   
  Arguments brought forward by the complainant

| (14) | The complainant maintains, in general terms, that GR’s activities represent a political rather than a commercial project. It alleges that the company has been operated with a view to enhance competition on the telecommunications market, and that a private investor would not have acted in the same way as OR, when providing loans and capital injections to GR. The complainant moreover alleges that OR has provided GR with several capital injections and loans to finance their operations, which have not been on market terms, as well as more favourable access to OR infrastructure than other market players could receive. |
| --- | --- |

(14)

| (15) | According to the complainant, a major part of the alleged unlawful state aid has been in the form of interest rates for loans granted by OR to GR, which have not corresponded to market terms. Furthermore, after the majority of GR’s loans were gradually replaced by loans financed by private lenders (with full replacement at the end of 2017), the interest rates have continued to not correspond to normal market conditions, as OR has provided lenders with a guarantee that it would maintain its majority ownership of GR. The complainant considers that this must be considered as state aid that is incompatible with the functioning of the EEA Agreement. |
| --- | --- |

(15)

| (16) | The complainant puts forward that the assessment performed by the PTA under Article 36 of the Electronic Communications Act is substantially different from the assessment conducted by the Authority under the state aid rules. According to the complainant, the application of the said rule by the PTA has consisted in assessing the return on equity. It seems that PTA has not made a detailed comparison with other market investors. The focus has rather been on assessing the financing generally, concentrating on whether the measures provide a direct loss for OR, as opposed to assessing whether the financing would have been provided by an investor operating on the market. |
| --- | --- |

(16)

3   Description of the measures

3.1   
  Background

3.1.1   OR – Orkuveita Reykjavíkur

| (17) | OR was established on 1 January 1999 as a public undertaking with the decision of the City Council of Reykjavík to merge the operations of the electricity and heat utilities owned by the city. A year later, the water utility was also incorporated into the new company. The company was operated on the basis of Regulation No 793/1998, issued by the Ministry of Industry and the City Council of Reykjavik, with reference to legislative Act No 38/1940 on the Reykjavik Heating Utility, and the Power Act No 58/1967. OR currently provides the following services through its three subsidiaries: electricity (Orka Náttúrunar), geothermal water for heating, cold water, sewage services (Veitur) and fibre-optic data connections (GR). |
| --- | --- |

(17)

| (18) | On 1 December 2001, OR merged with a utility company owned by several small municipalities in the western part of Iceland. After the merger, the City of Reykjavík owns 93,5 % of the company, the municipality of Akranes owns 5,5 % and the municipality of Borgarbyggð 1 %. Five members of the board of directors are appointed by the City Council of Reykjavík and one is appointed by the Municipality Council of Akranes (22). OR currently operates as a public partnership company, sameignarfélag (23), on the basis of Act No 136/2013 on OR (24) and Regulation No 297/2006 (25). |
| --- | --- |

(18)

3.1.2   GR – Gagnaveita Reykjavíkur

| (19) | GR is a telecommunications company established in 2007 as an independent legal entity, in order to comply with the requirements of the PTA on separation between the competitive and non-competitive operations of OR. GR is fully owned by OR. The purpose of GR, according to its articles of association, is the operation of a telecommunication and data transmission network. It provides wholesale access to its fibre optic network, for a number of retail service providers that operate in the residential and businesses markets with different fixed broadband and data transmission services. GR also offers services on the household market, where it charges end-users directly for the use of the access network. |
| --- | --- |

(19)

| (20) | OR began investing in the telecommunications market in 1999, when it established the subsidiary Lina.Net, with the purpose of providing general telecommunication services with emphasis on data transmission and internet connections in urban areas in Iceland. Its operations were later expanded into the setting up of an electronic telecommunications network using fibre optic cables. The Authority investigated several capital injections into Lina.Net during the years 1999–2001 in its Decision No 300/11/COL and found that they were in line with the actions of a private investor such that no state aid was granted (26). |
| --- | --- |

(20)

| (21) | Lina.Net invested considerable sums in its fibre optic networks and, since 2007, GR has continued to expand the network. In total, the investments between 2002 and 2010 amounted to around ISK 8 billion. |
| --- | --- |

(21)

3.2   National legal basis

| (22) | GR is a registered operator (data transmission and service) (27) under the Electronic Communications Act No 81/2003. Article 36 of the Electronic Communications Act, on separation of concession activities from electronic communications activities, provides:
  ‘Electronic communications undertakings or consolidations operating public communications networks or publicly available electronic communications services, which enjoy special or exclusive rights in sectors other than electronic communications, must keep their electronic communications activities financially separate from other activities as if they were two separate undertakings. Care shall be taken to ensure that competitive operations are not subsidised by activities enjoying exclusive rights or protected activities’. (emphasis added) |
| --- | --- |

(22)

‘Electronic communications undertakings or consolidations operating public communications networks or publicly available electronic communications services, which enjoy special or exclusive rights in sectors other than electronic communications, must keep their electronic communications activities financially separate from other activities as if they were two separate undertakings. Care shall be taken to ensure that competitive operations are not subsidised by activities enjoying exclusive rights or protected activities’. (emphasis added)

| (23) | According to the legislative proposal (frumvarp) of the Electronic Communications Act, Article 36 is meant to ensure that competitive telecommunication operations are not subsidised through income from operations that are protected by exclusive rights or by other means (28).The proposal also makes it clear that the provision is applicable regardless of the undertaking’s market share and regardless of whether the telecommunications operations are carried out within the same undertaking or by a separate legal entity which it controls (29). |
| --- | --- |

(23)

3.3   The PTA’s monitoring role

3.3.1   General

| (24) | The PTA operates according to the Act on Post and Telecom Administration No 69/2003, which implements the provisions of the EU’s regulatory framework for electronic communications (30). As a supervisory authority, the PTA, inter alia, ensures, in accordance with Article 36 of the Electronic Communications Act, that revenues stemming from non-competitive sectors do not subsidise operations in the competitive telecommunications sector. Therefore, the PTA is entrusted with scrutinising OR’s investments in the telecommunications market and the business relations between GR and OR. Such investigations can start at the PTA’s own initiative or through complaints from interested parties. GR is also obligated to notify specific measures, such as increase in share capital (31), to the PTA to obtain prior approval and interested parties can be parties to such cases, if they demonstrate that they have a legitimate interest in the result of the case (32). |
| --- | --- |

(24)

| (25) | An interested party can challenge decisions of the PTA before the Rulings Committee for Electronic Communications and Postal Affairs (33). This includes decisions taken on the basis of Article 36 of the Electronic Communications Act (34). |
| --- | --- |

(25)

| (26) | The following is a brief summary of the PTA’s main decisional practice concerning OR’s investments in the telecommunications market and the business relations between GR and OR to which the complainant has referred. |
| --- | --- |

(26)

3.3.2   OR’s purchase of the fibre-optic network from Lina.Net

| (27) | In October 2002, OR purchased the fibre-optic network from Lina.Net for ISK 1 758 811 899. In early 2003, after the enactment of the Electronic Communications Act, the PTA sent OR an inquiry regarding how the company intended to fulfil the conditions for separation of activities stipulated by Article 36 of the Electronic Communications Act (35). |
| --- | --- |

(27)

| (28) | In the ensuing PTA procedure, the PTA requested two expert reports , from the two consultancies KPMG and Rafhönnun (36), on the fair market value of the Lina.Net fibre-optic network (37). Both reports concluded that there was no indication that the purchase price was below market value. Moreover, the audit firm KPMG analysed certain parts of the operational and financial separation (38). The PTA accepted the results of the expert reports. |
| --- | --- |

(28)

3.3.3   The establishment and financing of GR as a separate legal entity

| (29) | As part of the aforementioned procedure, the PTA required OR to submit a business plan for the operations of the fibre-network and telecommunication services, demonstrating an adequate rate of return on the investment. KPMG performed a due diligence review of the business plan and determined that the rate of return on the investment was appropriate. Moreover, the PTA instructed OR to fulfil the following conditions (39):






  (i) | Separation of accounts. The PTA instructed OR to establish a separate entity, entrusted with the telecommunications operations, which should keep separate accounts in line with established corporate practices. |
| --- | --- | --- |

(29)

(i)

Separation of accounts. The PTA instructed OR to establish a separate entity, entrusted with the telecommunications operations, which should keep separate accounts in line with established corporate practices.

| (ii) | Prepare a foundation balance sheet (stofnefnahagsreikningur), comprising the telecommunication assets (valued at an appropriate market price) as well as the liabilities that stemmed from the financing of the telecom operations of OR (with the reservation that if the terms were more favourable than market terms, the new entity would have to compensate OR for any difference). |
| --- | --- |

(ii)

Prepare a foundation balance sheet (stofnefnahagsreikningur), comprising the telecommunication assets (valued at an appropriate market price) as well as the liabilities that stemmed from the financing of the telecom operations of OR (with the reservation that if the terms were more favourable than market terms, the new entity would have to compensate OR for any difference).

| (iii) | Arm’s-length terms should apply to all dealings between the new entity and OR. |
| --- | --- |

(iii)

Arm’s-length terms should apply to all dealings between the new entity and OR.

| (30) | On 1 January 2007, in accordance with instructions of the PTA described above, OR established the private limited liability company GR as a new legal entity. |
| --- | --- |

(30)

| (31) | On 8 March 2007, a framework agreement was concluded between OR and GR, setting out the terms of the investment and the opening balance sheet of GR. OR transferred assets to GR. GR provided payment in the form of a loan and issuing share capital to OR. The interest rate to be paid by GR to OR on its loan principal over a payback period of [...] years was based on the [...] plus a margin of [...] basis points, and was linked to the exchange rates of several foreign currencies. According to the consulting firm Deloitte, the loan agreement contained normal market practice terms, comparable to agreements concluded between private undertakings, as regards the event of default, the provision of information to the lender, and other covenants. Deloitte submitted a declaration in accordance with Article 5 of the Act on Private Limited Companies No 138/1994 (40), dated 7 March 2007, on the value of the assets, and concluded that they had been valued at a fair price. The terms of the loans were also reviewed and approved by the PTA (41). |
| --- | --- |

(31)

| (32) | On 21 May 2010, the PTA issued Decision No 14/2010, concerning the financial separation between OR and GR. In its Decision, the PTA confirmed that GR had to obtain prior approval from the PTA for any increase in share capital on behalf of OR or related companies. The PTA also noted that it would only approve such measures if they were on arm’s-length terms and if they did not entail the subsidisation of competitive operations (42). |
| --- | --- |

(32)

| (33) | Following the financial crisis in Iceland in 2008, the ISK devalued considerably, and GR became unable to fulfil its commitments under the loan agreement. An agreement was made with OR on temporary suspension of interest payments. The PTA was informed and subsequently intervened. The PTA required that the suspension of payments be revoked on the grounds that it did not comply with the required arm’s-length terms (43). GR complied and paid instalments and accrued interests in full. |
| --- | --- |

(33)

3.3.4   GR’s rate of return and the share capital increase of December 2008

| (34) | In December 2008, OR increased its share of GR’s capital. On 22 December 2010, the PTA adopted Decision No 39/2010, concerning the share capital increase and GR’s rate of return on capital. |
| --- | --- |

(34)

| (35) | With this Decision, the PTA noted that the operations of GR went according to the initial business plan in the year 2007. GR’s equity ratio was approximately 52 % at the end of 2007 and the company made a profit of ISK 120 million that year. The financial crisis of 2008 hit the company hard and in spite of increasing operating revenues, the losses of 2008 were close to ISK 3 billion, almost solely attributable to the devaluation of the ISK, which caused the debt of the company to increase. |
| --- | --- |

(35)

| (36) | To urgently restore the viability of GR, OR decided to increase the share capital before the end of 2008. The capital was increased by ISK 1,2 billion, setting an equity ratio of 23 %. The PTA Decision states that in absence of the share capital increase, ‘practically all equity would have been wiped out’, due to the financial collapse and sharp devaluation of the operating currency whilst the liabilities were all linked to foreign currency rates (44). |
| --- | --- |

(36)

| (37) | Furthermore, the PTA observed that in 2008 OR and GR had contacted private lenders with the intention to finance further investment in ongoing projects (45). The financial markets, however, were completely frozen by the end of the year. The Icelandic authorities maintain that, as an investor, OR inevitably had to invest further, in order to protect its significant initial investment (46). |
| --- | --- |

(37)

| (38) | The PTA highlighted that OR’s decision to increase the share capital had to be considered not only from its perspective as GR’s owner, but also as GR’s largest creditor. The PTA noted that creditors of several telecommunication companies had acquired them following the financial crisis, and either converted debts to equity or restructured loans. Moreover, the PTA found that GR’s updated business plans convincingly demonstrated a satisfactory level of profitability for a telecommunication company in a competitive market, within a reasonable timeframe, and that there was a normal correlation between the profitability and the owner’s contribution (47). |
| --- | --- |

(38)

3.3.5   The conversion of debt into equity in 2014

| (39) | Like many companies in Iceland, GR needed to reorganize its financial affairs after the financial crisis of 2008. OR’s application for permission to increase the share capital of GR in July and August 2013 was the subject of PTA’s Decision No 2/2014 of 24 March 2014. The reorganisation involved: (i) a conversion of ISK 3,5 billion of debt into equity, and (ii) that GR would enter the financial markets to refinance all remaining debt owed to OR. Finally, OR intended to dispose of a large portion of its shares post-refinancing. |
| --- | --- |

(39)

| (40) | The PTA accepted that the debt conversion would not increase the total financing of GR by OR, since it only changed the composition of the financing. The PTA also recognised that the conversion would change the equity ratio of GR from 22 % to 52 %, thereby leaving the ratio at the same level as GR’s main competitor, Míla (48). The PTA also assessed the initial business plan of GR, and determined that it was credible. The cash flow analysis demonstrated that if the devaluation of the operating currency had not hit the company in 2008, there would not have been a need for refinancing. Moreover, the PTA’s financial analysis confirmed that the rate of return for the investor and the weighted average cost of capital (WACC) of GR were in conformity with the general benchmark set by the PTA (49). |
| --- | --- |

(40)

| (41) | Míla intervened in the procedure before the PTA. The PTA rejected all the objections from Míla. The PTA adopted its Decision No 2/2014 on 24 March 2014, and the debt conversion was finalized in early April 2014. In June 2014, Míla initiated a court case against the PTA, GR and OR, requesting the courts to annul the PTA’s decision (50). The District Court of Reykjavík dismissed the case on 26 February 2015, and the Supreme Court confirmed the ruling of the District Court by judgment of 27 March 2015 (51). |
| --- | --- |

(41)

3.3.6   The implementation of GR’s financial separation for 2016–2017

| (42) | On 20 March 2019, the PTA adopted Decision No 3/2019, concerning the implementation of GR’s financial separation for 2016–2017, and whether it was in compliance with Article 36 of the Electronic Communications Act (52). |
| --- | --- |

(42)

| (43) | The PTA concluded that the financial separation between OR and GR had been in accordance with Article 36 of the Electronic Communications Act in the years 2016 and 2017, except for short-term lending to GR from a shared cash pool by OR and GR. The PTA found that these loan arrangements between OR and GR infringed an earlier PTA decision from 13 November 2006, as well as PTA Decision No 14/2010, since there was no loan agreement concluded between OR and GR reflecting the conditions that prevailed on the market for such loans (53). |
| --- | --- |

(43)

| (44) | The PTA also commented on conditions in GR’s loan agreements with private lenders, relating to OR’s continuing majority ownership of GR. The loan agreements in question had included special conditions that if the ownership of OR in GR went below 50% then the lender was authorised to demand repayment, terminate the loan agreement, or declare the loan immediately due. Such a provision has been included in GR’s loan agreements with private lenders since OR’s loan financing of GR was replaced by private lenders, starting in 2014 and eventually being completely replaced by the end of 2017 (54). |
| --- | --- |

(44)

| (45) | The PTA noted that by including these provisions, private lenders connected the ownership of OR to the loan agreements, in order to minimise the probability of default (55). The PTA considered that such arrangements could lead to more advantageous loan terms and more access to loan capital than other comparable telecommunication undertakings and, therefore, distort competition (56). Moreover, the PTA considered that this provision in the loan agreements constituted a connection between OR and GR that was not in accordance with the financial separation imposed in order to ensure that the two acted as unrelated parties (57). |
| --- | --- |

(45)

| (46) | The PTA concluded that measures were required to ensure an efficient financial separation between OR and GR, in accordance with Article 36 of the Electronic Communications Act. The PTA decided that:






  a) | OR’s lending to GR from a shared cash pool, without a loan agreement reflecting market conditions, infringed the PTA Decision of 13 November 2006 and, therefore, also Article 36 of the Electronic Communications Act. |
| --- | --- | --- |

(46)

a)

OR’s lending to GR from a shared cash pool, without a loan agreement reflecting market conditions, infringed the PTA Decision of 13 November 2006 and, therefore, also Article 36 of the Electronic Communications Act.

| b) | GR’s debt from the shared cash pool was not to, at any given time, exceed ISK [...]. |
| --- | --- |

b)

GR’s debt from the shared cash pool was not to, at any given time, exceed ISK [...].

| c) | GR was to obtain prior authorisation from the PTA for any loans from OR, or any other undertaking within the company group. GR shall submit an application to the PTA along with the necessary documents, e.g. a draft loan agreement, an appropriate business plan, a calculation of the profitability requirements, as well key social security numbers and the acceptance of other landers. Such a credit increase was to be in line with standard separation of accounts, and was to entail that competitive operations are not subsidised by activities enjoying exclusive rights. |
| --- | --- |

c)

GR was to obtain prior authorisation from the PTA for any loans from OR, or any other undertaking within the company group. GR shall submit an application to the PTA along with the necessary documents, e.g. a draft loan agreement, an appropriate business plan, a calculation of the profitability requirements, as well key social security numbers and the acceptance of other landers. Such a credit increase was to be in line with standard separation of accounts, and was to entail that competitive operations are not subsidised by activities enjoying exclusive rights.

| d) | New loan agreements with private lenders could not contain a provision stipulating that if the ownership of OR in GR goes below 50 % then the lender is authorised to declare the loan immediately due. |
| --- | --- |

d)

New loan agreements with private lenders could not contain a provision stipulating that if the ownership of OR in GR goes below 50 % then the lender is authorised to declare the loan immediately due.

| (47) | On 4 October 2019, following an appeal from GR, the Rulings Committee for Electronic Communications issued Ruling No 2/2019, confirming the decision of the PTA. |
| --- | --- |

(47)

3.3.7   Other cases

| (48) | In addition to the decisions referred to above, the PTA adopted a decision in 2013, under Article 36 of the Electronic Communications Act, to temporarily allow GR to extend its loan agreement with OR (58). |
| --- | --- |

(48)

| (49) | Moreover, in 2014, Míla complained to the PTA about certain measures relating to an agreement GR had concluded with Ölfus Municipality, which included funds indirectly deriving from OR. The funds had initially been paid by OR into the Ölfus Revegetation Fund (‘ÖRF’) in connection with OR’s geothermal power plant project in the municipality. OR had joint control of the ÖRF together with representatives from the municipality. In 2014, the ÖRF decided to use its funds to finance GR’s rollout of a fiber optic network in Ölfus Municipality. After assessing the measures, the PTA found that they were contrary to Article 36 of the Electronic Communications Act, and instructed GR to undertake certain measures to ensure that it did not obtain an advantage from the funds deriving from OR (59). |
| --- | --- |

(49)

4   Comments by the Icelandic authorities

| (50) | The Icelandic authorities point out that the Authority has already dismissed allegations by the complainant as regards OR’s investments in Lina.Net in its Decision No 300/11/COL of 5 October 2011 (60). |
| --- | --- |

(50)

| (51) | The Icelandic authorities maintain that in all its relations with GR, OR has acted in accordance with the market economy operator (‘MEO’) test, and that no aid has been granted to GR. In that regard, the Icelandic authorities highlight that all of the measures complained of concerning the financial relations between OR and GR, have been assessed by the PTA on the basis of Article 36 of the Electronic Communications Act. According to the Icelandic authorities, the test applied by the PTA is comparable to the criterion applied by the Authority when determining whether a measure is on market terms (i.e. the MEO test). |
| --- | --- |

(51)

| (52) | The Icelandic authorities have confirmed that GR’s current investments are financed with cash provided by its operating activities and loans from [...]. According to the Icelandic authorities, these loans do not constitute state aid in any way, and nor do they indicate that state aid has been extended to GR by its owner, as it is clear that the loans from [...] to GR were solely based on commercial motives. They state that the loans are fully in line with normal market terms. |
| --- | --- |

(52)

5   Presence of state aid

| (53) | Article 61(1) of the EEA Agreement reads as follows:
  ‘[...] any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.’ |
| --- | --- |

(53)

‘[...] any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.’

| (54) | The qualification of a measure as aid within the meaning of this provision therefore requires the following cumulative conditions to be met: (i) the measure must be granted by the state or through state resources; (ii) it must confer an advantage on an undertaking; (iii) favour certain undertakings (selectivity); and (iv) be liable to distort competition and affect trade. |
| --- | --- |

(54)

5.1   
  Presence of state resources

| (55) | The measure must be granted by the state or through state resources. The transfer of state resources may take many forms, such as direct grants, loans, guarantees, direct investment in the capital of companies and benefits in kind. A positive transfer of funds does not have to occur; foregoing state revenue is sufficient. Waiving revenue which would otherwise have been paid to the state constitutes a transfer of state resources. |
| --- | --- |

(55)

| (56) | The state, for the purpose of Article 61(1) of the EEA Agreement, covers all bodies of the public administration, from the central government to the city or the lowest administrative level. Resources of public undertakings may also constitute state resources within the meaning of Article 61(1) of the EEA Agreement because the state is capable of directing the use of these resources (61). For the purposes of state aid law, transfers within a public group may also constitute state aid if, for example, resources are transferred from the parent company to its subsidiary (62). However, the measure must be imputable to the state. |
| --- | --- |

(56)

| (57) | The mere fact that a measure is taken by a public undertaking is not per se sufficient to consider it imputable to the state. However, it does not need to be demonstrated that, in a particular case, the public authorities specifically incited the public undertaking to take the measure in question (63). Therefore, the imputability to the state of a measure taken by a public undertaking may be inferred from a set of indicators arising from the circumstances of the case and the context in which the measure was taken (64). Among the relevant indicators set out by the Court of Justice are:






  — | the fact that the body in question could not take the contested decision without taking into account the requirements of the public authorities; |
| --- | --- | --- |

(57)

—

the fact that the body in question could not take the contested decision without taking into account the requirements of the public authorities;

| — | the nature of the undertaking’s activities and the extent to which the activities were exercised on the market in normal conditions of competition with private operators; |
| --- | --- |

—

the nature of the undertaking’s activities and the extent to which the activities were exercised on the market in normal conditions of competition with private operators;

| — | the intensity of the supervision exercised by the public authorities over the management of the undertaking, and the degree of control which the state has over the public undertaking; and |
| --- | --- |

—

the intensity of the supervision exercised by the public authorities over the management of the undertaking, and the degree of control which the state has over the public undertaking; and

| — | any other indicator showing an involvement by the public authorities in the adoption of the measure, or the unlikelihood of their not being involved, having regard to the compass of the measure, its content or the conditions which it contains. |
| --- | --- |

—

any other indicator showing an involvement by the public authorities in the adoption of the measure, or the unlikelihood of their not being involved, having regard to the compass of the measure, its content or the conditions which it contains.

| (58) | The Authority will therefore need to assess, in light of the aforementioned indicators, whether OR, in its dealings with GR, was acting as an autonomous entity, free of any influence from its owners, or whether its actions are imputable to the Icelandic authorities, i.e. the City of Reykjavík and the municipalities of Akranes and Borgarbyggð. |
| --- | --- |

(58)

| (59) | As noted in paragraph (18) above, OR operates as a public partnership company on the basis of Act No 136/2013 on OR (65) and Regulation No 297/2006 (66). OR is therefore distinct from private companies which are subject to ordinary company law. OR’s annual accounts are also reflected in the City of Reykjavík’s consolidated financial statements (67). |
| --- | --- |

(59)

| (60) | The Board of OR consists of six members, five appointed by the Reykjavík City Council and one by the Municipality Council of Akranes. Currently, three board members are politicians who also serve as either City Council or Municipal Council representatives. According to OR’s partnership agreement, the Board is responsible for the company’s affairs between owner’s meetings and should monitor the company’s direction, organisation and that its operations are in good shape and in accordance with the ownership policy. The Board sets an overall policy and future vision for OR and adopts decisions concerning major matters within the limit of the ownership policy. Before adopting unusual or important decisions or policy decisions, the Board must consult with the owners of OR. The same applies to similar decisions regarding subsidiaries (such as GR). The Board is also responsible for recruiting OR’s Director, drafting his/her job description and his/her eventual employment termination (68). |
| --- | --- |

(60)

| (61) | OR produces and sells electricity in a liberalised market open to competition. The company also has legal obligations to provide utility services (heating and water) and carries out other projects in the municipalities of its owners as well as other municipalities (69). Those utility services have since 2014 been carried out by OR’s subsidiary, Veitur, in order to comply with the Electricity Act, which prohibits cross subsidisation between utility activities, as well as between activities enjoying exclusive rights and competitive operations (70). According to OR’s ownership policy, the company’s administrative practices shall reflect professionalism, efficiency, prudence, transparency and responsibility. The Board is responsible for adopting the company’s policies concerning dividends, risk management, purchasing, etc. (71). |
| --- | --- |

(61)

| (62) | Although it appears that OR’s owners have taken steps to separate its public utility services and its competitive operations, in order to ensure that the latter are operated in line with commercial practices on the market, with OR’s management being somewhat autonomous in its decision making process, there are nevertheless elements to indicate that the public authorities may influence the company’s strategy and decisions. As noted above, the Board sets OR’s policies in various fields and must approve the company’s major decisions, which in some instances requires consulting with OR’s owners. It appears that many of the measures complained of concern major investments, loan guarantees and loan transactions between OR and GR, which may have been subject to the Board’s scrutiny and approval. The Board, as noted above, is politically appointed, and currently half of the board members also serve as City or Municipal Council representatives. This arrangement has been evaluated by the Enquiry Committee on Orkuveita Reykjavíkur, which in its 2012 report noted that this arrangement could lead to a lack of professional knowledge and experience on the Board, and that its work could be characterised by political conflict and disunity (72). |
| --- | --- |

(62)

| (63) | In light of the legal status of OR, the composition of its Board and the general circumstances described above, the Authority is unable to exclude that the measures are imputable to the State and that they entail the transfer of state resources, if and to the extent they confer advantages on GR. |
| --- | --- |

(63)

| (64) | Against this background, the Icelandic authorities are invited to comment on the issue of imputability. |
| --- | --- |

(64)

5.2   
  Conferral of an advantage on an undertaking

5.2.1   General

| (65) | The qualification of a measure as state aid requires that it confers an advantage on the recipient. An advantage, within the meaning of Article 61(1) of the EEA Agreement, is any economic benefit, which an undertaking could not have obtained under normal market conditions. |
| --- | --- |

(65)

5.2.2   Does GR constitute an undertaking?

| (66) | The EU Courts have consistently defined undertakings as entities engaged in an economic activity, regardless of their legal status and the way in which they are financed (73). Consequently, the public or private status of an entity or the fact that an entity is partly or wholly publicly owned has no bearing as to whether or not that entity is an ‘undertaking’ within the meaning of state aid law (74). |
| --- | --- |

(66)

| (67) | Economic activities are activities consisting of offering goods or services on a market (75). Conversely, entities that are not commercially active in the sense that they are not offering goods or services on a given market do not constitute undertakings. A single entity may carry out a number of activities, both economic and non-economic, provided that it keeps separate accounts for the different funds that it receives, so as to exclude any risk of cross-subsidisation of its economic activities by means of public funds received for its non-economic activities (76). |
| --- | --- |

(67)

| (68) | As described in paragraph (19) above, GR was established on 1 January 2007, and its role is to provide Icelandic households and businesses access to high quality services on an open access network (77). GR operates a telecommunications and data transmission network and it provides wholesale access to its fibre optic network for a number of retail service providers that operate in supplying homes and businesses with different fixed broadband and data transmission services. GR also offers services on the household market, where it charges end-users directly for the use of the access network. |
| --- | --- |

(68)

| (69) | Although GR does not sell its own services in the retail market, it offers neutral and open network access to all interested telecommunications providers. The Authority considers that the provision of network access for a fixed price to third-party service providers and households constitutes an economic activity. Consequently, GR appears to operate as an undertaking within the meaning of Article 61(1) of the EEA Agreement (78). |
| --- | --- |

(69)

| (70) | Any advantage involved in the transactions between OR and GR will therefore have been conferred upon an undertaking. |
| --- | --- |

(70)

5.2.3   PTA’s monitoring and decisional practice

| (71) | The measures complained of, concerning the financial relations between OR and GR, have, as described in Section 3.3 above, all been assessed by the PTA on the basis of Article 36 of the Electronic Communications Act. |
| --- | --- |

(71)

| (72) | The Icelandic authorities maintain that the test applied by the PTA is comparable to the test applied by the Authority when determining whether a measure is on market terms (i.e. the MEO test). |
| --- | --- |

(72)

| (73) | It is the Authority’s preliminary view, considering the decisional practice of the PTA under Article 36 of the Electronic Communications Act on the financing of GR and the level of scrutiny involved in the assessment of the various measures, that the test applied by the PTA under Article 36 generally ensures that all transactions between GR and OR, or other related companies, are on market terms. |
| --- | --- |

(73)

| (74) | The PTA’s approach may not be identical to the MEO assessment that would be carried out by the Authority under the EEA state aid rules, but it nonetheless ensures the same outcome, i.e. it prevents transactions that are not on market terms. Therefore, at this stage the Authority is of the preliminary view that the PTA provides an assessment similar to the Authority’s MEO assessment. The enforcement of Article 36 of the Electronic Communications Act by the PTA thus appears to effectively prevent GR from obtaining an advantage from its dealings with OR and when infringements are found the PTA has the competence to order the clawback of any advantages. However, there are instances where the PTA has either not ordered the full clawback of advantages with interest, or not ordered clawback at all. |
| --- | --- |

(74)

| (75) | An advantage, within the meaning of Article 61(1) of the EEA Agreement, is any economic benefit which an undertaking would not have obtained under normal market conditions, i.e. in the absence of state intervention, thereby placing it in a more favourable position than its competitors (79). |
| --- | --- |

(75)

| (76) | Generally, when examining this question, the Authority applies the MEO test (80), whereby the conduct of states or public authorities, when selling or leasing assets, is compared to that of private economic operators (81). |
| --- | --- |

(76)

| (77) | The purpose of the MEO test is to assess whether the state has granted an advantage to an undertaking by not acting like a private market economy operator with regard to a certain transaction, e.g. loan agreements or the sale of asset (82). In order to fulfil the test, the public authority must disregard public policy objectives and instead focus on the single objective of obtaining a market rate of return or profit on its investments and a market price for the sale or lease of assets (83). This assessment must take into account any special rights or obligations attached to the asset concerned, in particular those that could affect the market value. |
| --- | --- |

(77)

| (78) | It follows from this test that an advantage is present whenever a state makes funds available to an undertaking, which, in the normal course of events, would not be provided by a private investor applying ordinary commercial criteria and disregarding other considerations of a social, political or philanthropic nature (84). |
| --- | --- |

(78)

| (79) | The PTA, as described above, has examined the strategy and financial prospect of the relevant measures, in order to determine whether the financing of the operations of GR has been carried out in line with normal market conditions. In its assessment, the PTA has considered independent expert reports and drawn comparisons with other, private operators in the same market. The PTA’s assessment is normally carried out on an ex ante basis. However, there are also examples of the PTA having carried out an ex post assessment of the financial separation between OR and GR, as well as individual measures. |
| --- | --- |

(79)

| (80) | More precisely, from 2006 until 2019, the PTA adopted nine formal decisions regarding the financial separation of OR and GR. The PTA did not make formal comments for the years 2013–2015. The PTA’s investigations included a review of GR’s business plan, which must be renewed annually, in accordance with actual financial data. In its review, the PTA e.g. checks whether the rate of return for the investor (OR) is in conformity with the telecom market in general, and looks at the capital structure and whether transactions between OR and GR are on market terms. |
| --- | --- |

(80)

| (81) | GR has been obliged to submit to the PTA, on an annual basis, detailed operational and economic information, together with its revised business plans and profitability requirements. Whenever necessary, the PTA has requested additional data and has assessed whether the operations were in line with market terms and, if not, whether there was a reason for taking action. |
| --- | --- |

(81)

| (82) | In a letter from the PTA to the complainant, dated 6 September 2018, the PTA confirmed that it does not have legal powers to perform a cost analysis of the prices OR sets for renting out its facilities. The complainant has argued that because of this, the PTA’s assessment of the financial separation cannot replace that of the Authority, when assessing possible state aid. |
| --- | --- |

(82)

| (83) | It is the preliminary view of the Authority that even though the PTA does not have the legal basis to perform a cost analysis of OR’s prices, the PTA has other ways to ensure that OR’s pricing practices for renting out facilities are on market terms. Article 36 of the Electronic Communications Act obliges OR to ensure equality in pricing when renting out facilities to related and unrelated companies. Furthermore, OR is obliged to ensure that competitive operations are not subsidised by activities enjoying exclusive rights or protected activities. The PTA then enforces these obligations. As the PTA explains in its letter to the complainant, it did in fact open an investigation into OR pricing practices for renting out facilities, and concluded that OR’s pricing was in full conformity with Article 36 of the Electronic Communications Act (85). |
| --- | --- |

(83)

| (84) | The PTA has found that in order to ensure that the effectiveness of Article 36 of the Electronic Communications Act is guaranteed, the concept of ‘subsidy’ should be understood in a broad sense, so as to include any measures from OR, both direct and indirect, which potentially provide GR with an advantage that its competitors on the market do not enjoy. The PTA has also noted that its monitoring role, pursuant to Article 36, is comparable to the Authority’s, when it comes to assessing whether an advantage within the meaning of Article 61(1) of the EEA Agreement is present (86). |
| --- | --- |

(84)

| (85) | It is the Authority‘s preliminary view that there is an efficient system in place in Iceland that entails an assessment similar to the MEO test. Consequently, Article 36 of the Electronic Communications Act sets up a system under which the PTA can ensure that GR’s operations are not subsidised through income from OR’s operations. |
| --- | --- |

(85)

| (86) | It follows from the test that an advantage is present whenever OR makes funds available to GR, which, in the normal course of events, would not be provided by a private investor applying ordinary commercial criteria. The PTA can conduct a formal investigation on its own initiative or based on a complaint. If a transaction is not in conformity with Article 36 of the Electronic Communications Act, the PTA can instruct the parties to eliminate any advantage through the adoption of relevant measures set forth in an administrative decision by the PTA. The decisions are challengeable before the Rulings Committee for Electronic Communications and Postal Affairs and the Courts. |
| --- | --- |

(86)

| (87) | The Icelandic authorities have explained that the PTA’s monitoring role is primarily focused on an ex ante assessment of GR’s business plans, financing, profitability requirements, loan arrangements, etc., with the PTA imposing conditions and obligations when necessary in order to ensure financial separation between OR and GR, and that the latter’s competitive operations are not subsidised by the mother company (87). |
| --- | --- |

(87)

| (88) | Where the PTA ex post finds an infringement of Article 36 of the Electronic Communications Act, i.e. where it finds that a particular transaction was not on market terms, it can instruct the parties to eliminate any potential advantage through the adoption of relevant measures. The advantage is then recovered from the beneficiary in accordance with national law (88). |
| --- | --- |

(88)

| (89) | However, for the PTA to order an advantage clawed back, the incompatible measure must be clearly defined and be incontestable, e.g. a particular monetary sum, a condition in a loan agreement, etc. (89). Moreover, when the PTA has ordered advantages granted to GR to be clawed back, it has not required those advantages to be recovered with interest. |
| --- | --- |

(89)

| (90) | As described in Section 4.3 above, there are three examples of the PTA having established concrete infringements of Article 36 of the Electronic Communications Act. In two of those cases, the PTA ordered that the measures be clawed back. In the third case, the PTA did not order any clawback. |
| --- | --- |

(90)

| (91) | The first case, described in paragraph (33) above, concerned a temporary suspension of interest payments on loans provided by OR to GR (90). The PTA concluded that this temporary suspension had been in breach of the requirement imposed by the PTA concerning arm’s-length terms in transactions between OR and GR. Moreover, the PTA found that the suspension of interest payments had provided GR with an advantageous subsidy. Considering the facts of this case, the nature of transactions, as well as the PTA’s assessment, the Authority is also of the preliminary view that the measure provided GR with an advantage that it would not have obtained under normal market conditions. |
| --- | --- |

(91)

| (92) | The PTA ordered GR to pay back the suspended interest payments, however, it did not order the company to pay back interest on those suspended payments (91). In order to effectively recover an unlawful advantage at national level, the beneficiary must be ordered to pay interest for the whole of the period in which it benefitted from that aid. The interest must at least be equivalent to that which would have been applied if the beneficiary had had to borrow the amount on the market at the time (92). Although GR has paid back the market interest it was obliged to pay in the first place, it has not been required to pay back market interest on the advantage it obtained through the temporary suspension of interest payments. Therefore, the full advantage has not been adequately clawed back. |
| --- | --- |

(92)

| (93) | The second case, briefly described in paragraph (49) above, concerned funds deriving from OR and used to finance GR’s fiber optic cable project in Ölfus Municipality (93). The PTA concluded that the transfer of funds from ÖRF (but deriving from OR) to GR had amounted to a cross-subsidy between OR’s protected geothermal activities and GR’s competitive operations. Having considered the facts of the case and the PTA’s assessment, the Authority takes the preliminary view that ÖRF’s financing of the fibre optic cable network was not on market terms and therefore provided GR with an advantage. |
| --- | --- |

(93)

| (94) | The PTA ordered GR to undertake appropriate measures to repay the funds it received from ÖRF, although it did not stipulate how GR should go about this. Nevertheless, the PTA suggested that GR could either repay the funds to Ölfus Municipality or that the municipality could obtain an appropriate share in the project proportional to its investment. The Authority does not have information concerning how GR reacted to the PTA’s proposals and which measures it adopted following the decision. At this stage, it is therefore not clear to the Authority whether the advantage has been fully clawed back from GR. |
| --- | --- |

(94)

| (95) | Finally, in its latest decision concerning the implementation of GR’s financial separation for 2016–2017 (see Section 4.3.6 above), the PTA found two infringements of Article 36 of the Electronic Communications Act (94):






  (i) | The first infringement concerned OR’s lending to GR from a shared cash pool, without a loan agreement reflecting market conditions. |
| --- | --- | --- |

(95)

(i)

The first infringement concerned OR’s lending to GR from a shared cash pool, without a loan agreement reflecting market conditions.

| (ii) | The second infringement concerned conditions in GR’s loan agreements with private lenders relating to OR’s continuing majority ownership of GR. Such provisions had been included in GR’s loan agreements with private lenders, since OR’s loan financing of GR was replaced by private lenders, starting in 2014 and eventually being completely replaced at the end of 2017. The PTA found that by including these provisions, private lenders connected the ownership of OR to the loan agreements, in order to minimise the probability of default (95). The PTA considered that such arrangements could lead to more advantageous loan terms and more access to loan capital than other comparable telecommunications undertakings and, therefore, distort competition (96). |
| --- | --- |

(ii)

The second infringement concerned conditions in GR’s loan agreements with private lenders relating to OR’s continuing majority ownership of GR. Such provisions had been included in GR’s loan agreements with private lenders, since OR’s loan financing of GR was replaced by private lenders, starting in 2014 and eventually being completely replaced at the end of 2017. The PTA found that by including these provisions, private lenders connected the ownership of OR to the loan agreements, in order to minimise the probability of default (95). The PTA considered that such arrangements could lead to more advantageous loan terms and more access to loan capital than other comparable telecommunications undertakings and, therefore, distort competition (96).

| (96) | The Authority, considering the benchmarks applied by the PTA and its detailed assessment of these measures, takes the preliminary view that these two measures provided GR with an advantage that it would not have obtained under normal market conditions. Due to proportionality considerations, the PTA did not order the clawback of the aforementioned advantages. |
| --- | --- |

(96)

5.2.4   Preliminary conclusions

| (97) | Based on the above considerations, it is the Authority’s preliminary view that GR has obtained an advantage within the meaning of Article 61(1) of the EEA Agreement, which it could not have obtained under normal market conditions, by: (i) not paying market interest on the advantage it obtained through a temporary suspension of interest payments, (ii) receiving funds indirectly from OR for the layout of a fibre optic cable network in Ölfus Municipality, (iii) receiving short-term lending from OR, and (iv) through the inclusion of a condition in GR’s loan agreements with private lenders on OR’s continued majority ownership in GR. |
| --- | --- |

(97)

5.3   
  Selectivity

| (98) | To be characterised as state aid within the meaning of Article 61(1) of the EEA Agreement, the measure must also be selective in that it favours ‘certain undertakings or the production of certain goods’. Not all measures which favour economic operators fall under the notion of aid, but only those which grant an advantage in a selective way to certain undertakings, categories of undertakings or to certain economic sectors. |
| --- | --- |

(98)

| (99) | The potential aid measures at issue, i.e. (i) not paying market interest on the advantage GR obtained through a temporary suspension of interest payments, (ii) receipt of funds indirectly from OR for the layout of a fibre optic cable network in Ölfus Municipality, (iii) short-term lending from OR to GR, and (iv) the inclusion of a condition in GR’s loan agreements with private lenders on OR’s continued majority ownership in GR, are individual measures addressed only to GR. The measures therefore appear to be selective within the meaning of Article 61(1) of the EEA Agreement. |
| --- | --- |

(99)

5.4   
  Effect on trade and distortion of competition

| (100) | The measures must be liable to distort competition and affect trade between the Contracting Parties to the EEA Agreement. |
| --- | --- |

(100)

| (101) | According to CJEU case law, it is not necessary to establish that the aid has a real effect on trade between the Contracting Parties to the EEA Agreement and that competition is actually being distorted, but only to examine whether the aid is liable to affect such trade and distort competition (97). Furthermore, it is not necessary that the aid beneficiary itself is involved in intra-EEA trade. Even a public subsidy granted to an undertaking, which provides only local or regional services and does not provide any services outside its state of origin, may nonetheless have an effect on trade if such internal activity can be increased or maintained as a result of the aid, with the consequence that the opportunities for undertakings established in other Contracting Parties are reduced (98). |
| --- | --- |

(101)

| (102) | GR is active in deploying a fibre network infrastructure in a market which can be entered directly or through financial involvement by participants from other EEA States. In general, the markets for electronic communications services (including the wholesale and the retail broadband markets) are open to trade and competition between operators and service providers across the EEA. |
| --- | --- |

(102)

| (103) | Therefore, it is the Authority’s preliminary view that the measures are liable to distort competition and affect trade between the Contracting Parties to the EEA Agreement. |
| --- | --- |

(103)

5.5   
  Conclusion

| (104) | Based on the information provided by the Icelandic authorities and the complainant, the Authority has formed the preliminary view that the measures, i.e. (i) not paying market interest on the advantage GR obtained through a temporary suspension of interest payments, (ii) receipt of funds indirectly from OR for the layout of a fibre optic cable network in Ölfus Municipality, (iii) short-term lending from OR to GR, and (iv) the inclusion of a condition in GR’s loan agreements with private lenders on OR’s, fulfil all criteria in Article 61(1) of the EEA Agreement and therefore constitute state aid. |
| --- | --- |

(104)

6   Procedural requirements

| (105) | Pursuant to Article 1(3) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (‘Protocol 3’): ‘The EFTA Surveillance Authority shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. .... The State concerned shall not put its proposed measures into effect until the procedure has resulted in a final decision.’ |
| --- | --- |

(105)

| (106) | The Icelandic authorities did not notify the potential aid measures to the Authority. It is therefore the Authority’s preliminary view that the Icelandic authorities have not respected their obligations pursuant to Article 1(3) of Part I of Protocol 3. The granting of the potential aid therefore appears to be unlawful. |
| --- | --- |

(106)

7   Compatibility

| (107) | Having reached a preliminary conclusion that the measures might constitute unlawful aid, the Authority must assess whether they would be compatible with the functioning of the EEA Agreement. |
| --- | --- |

(107)

| (108) | The Authority can declare state aid compatible with the functioning of the EEA Agreement under its Articles 59(2) and 61(3)(c) provided that certain compatibility conditions are fulfilled. |
| --- | --- |

(108)

| (109) | It is for the Icelandic authorities to invoke possible grounds for compatibility and to demonstrate that the conditions for compatibility are met (99). However, the Icelandic authorities have not provided any arguments substantiating why the measures should be considered compatible with the functioning of the EEA Agreement. In particular, no arguments supporting the conclusion that the aid is targeted at a well-defined objective of common interest have been presented. Furthermore, the Icelandic authorities have not presented evidence suggesting that GR has been entrusted with a public service obligation. The Authority has also not identified any clear grounds for compatibility. |
| --- | --- |

(109)

| (110) | To the extent that the measures constitute state aid, the Authority therefore has doubts as to their compatibility with the functioning of the EEA Agreement |
| --- | --- |

(110)

8   Conclusion

| (111) | As set out above, the Authority has formed the preliminary view that the measures fulfil all criteria in Article 61(1) of the EEA Agreement and therefore appear to constitute state aid. The Authority furthermore has doubts as to whether the measures are compatible with the functioning of the EEA Agreement. |
| --- | --- |

(111)

| (112) | Consequently, and in accordance with Article 4(4) of Part II of Protocol 3, the Authority hereby opens the formal investigation procedure provided for in Article 1(2) of Part I of Protocol 3. The decision to open a formal investigation procedure is without prejudice to the final decision of the Authority, which may conclude that the measures do not constitute state aid or are compatible with the functioning of the EEA Agreement. |
| --- | --- |

(112)

| (113) | The Authority, acting under the procedure laid down in Article 1(2) of Part I of Protocol 3, invites the Icelandic authorities to submit, by 6 January 2020 their comments and to provide all documents, information and data needed for the assessment of the measures in light of the state aid rules. |
| --- | --- |

(113)

| (114) | The Icelandic authorities are requested to immediately forward a copy of this decision to OR. |
| --- | --- |

(114)

| (115) | If this letter contains confidential information which should not be disclosed to third parties, please inform the Authority by 13 December 2019, identifying the confidential elements and the reasons why the information is considered to be confidential. In doing so, please consult the Authority’s Guidelines on Professional Secrecy in State Aid Decisions (100). If the Authority does not receive a reasoned request by that deadline, the Icelandic authorities will be deemed to agree to the disclosure to third parties and to the publication of the full text of the letter on the Authority’s Internet: http://www.eftasurv.int/state-aid/state-aid-register/ and in the Official Journal of the European Union and the EEA Supplement thereto. |
| --- | --- |

(115)

| (116) | Finally, the Authority will inform interested parties by publishing a meaningful summary of it in the Official Journal of the European Union and the EEA Supplement thereto. All interested parties will be invited to submit their comments within one month of the date of such publication. The comments will be communicated to the Icelandic authorities. |
| --- | --- |

(116)

For the EFTA Surveillance Authority

Bente ANGELL-HANSEN

President

Responsible College Member

Frank J. BÜCHEL

College Member

Högni KRISTJÁNSSON

College Member

Carsten ZATSCHLER

Countersigning as Director,

Legal and Executive Affairs

---

(*)  The information in square brackets is covered by the obligation of professional secrecy.

*

(1)  Reference is made to Article 4(4) of Part II of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.

1

(2)  Document No 825150, and Annexes 1–43 (Document Nos 825151, 825152, 825152, 825153 and 825156).

2

(3)  Document No 825249.

3

(4)  Document No 827877.

4

(5)  Document No 828509.

5

(6)  Document No 835622 and three attachments (Document Nos 835623, 835624 and 835625).

6

(7)  Document Nos 840228 and 840229, and Annex 1 (Document No 840230).

7

(8)  Document No 850420.

8

(9)  Document No 862626 and eight attachments (Document Nos 862628, 862635, 862639, 862641, 862645, 862648, 862651 and 862655).

9

(10)  Document No 892188.

10

(11)  Document No 882024.

11

(12)  Document No 910552 and Annexes 1 and 2 (Document No 910554).

12

(13)  Document No 911001.

13

(14)  Document No 915072.

14

(15)  Document No 919903.

15

(16)  Document Nos 931137, 931138 and 931139.

16

(17)  Document No 1060941.

17

(18)  Document No 1066345.

18

(19)  Document No 1073306 and Annexes 1–5 (Document Nos 1073308, 1073310, 1073312, 1073314 and 1073316).

19

(20)  Document No 1087462 and Annexes 1–5 (Document Nos 1087456–1087460).

20

(21)  Earnings before interest, tax, depreciation and amortization (EBITDA) is a measure of a company’s operating performance.

21

(22)  https://www.or.is/um-or/skipulag-og-stjornhaettir/stjorn/.

22

(23)  https://www.rsk.is/fyrirtaekjaskra/leit/kennitala/5512983029.

23

(24)  https://www.althingi.is/lagas/nuna/2013136.html.

24

(25)  https://www.reglugerd.is/reglugerdir/allar/nr/297-2006.

25

(26)  OJ C 10, 12.1.2012, p. 6 and EEA Supplement No 2, 12 January 2012, p. 4.

26

(27)  Based on a general authorisation to operate telecommunication networks and services in accordance with Art. 4 of The Electronic Communications Act No 81/2003, see https://www.pfs.is/english/telecom-affairs/registration-and-licences/.

27

(28)  Submitted to Parliament in the 128 parliamentary session 2002–2003; http://www.althingi.is/altext/128/s/0960.html.

28

(29)  Ibid.

29

(30)  The framework is made up of a package of primarily five Directives and two Regulations: Framework Directive 2002/21/EC (OJ L 108, 24.4.2002, p. 33); Access Directive 2002/19/EC (OJ L 108, 24.4.2002, p. 7); Better Regulation Directive 2009/140/EC (OJ L 337, 18.12.2009, p. 37); Authorisation Directive 2002/20/EC (OJ L 108, 24.4.2002, p. 21); the Universal Service Directive 2002/22/EC (OJ L 108, 24.4.2002, p. 51); the Regulation on Body of European Regulators for Electronic Communications (BEREC) (OJ L 337, 18.12.2009, p. 1); and the Regulation on roaming on public mobile communications networks (OJ L 172, 30.6.2012, p. 10).

30

(31)  PTA Decision No 14/2010 of 21 May 2010.

31

(32)  PTA Decision No 20/2013 of 10 October 2013.

32

(33)  Article 13 of the Act on The Post and Telecom Administration No 69/2003.

33

(34)  See for example Ruling of the Ruling Committee of 17 July 2006 in Case No 8/2006.

34

(35)  PTA Decision of 13 November 2006, p. 1.

35

(36)  Attachments contained in Document No 862628.

36

(37)  PTA Decision of 13 November 2006, p. 5.

37

(38)  PTA Decision of 13 November 2006, p. 16.

38

(39)  PTA Decision of 13 November 2006, p. 15–23.

39

(40)  Article 5 of the Act (available in English here) concerns the special provisions that a Memorandum of Association should contain. According to section 5 in paragraph 2 there should be attached to the Memorandum of Association a report containing ‘a declaration to the effect that the specific valuables correspond at least to the agreed remuneration, including the nominal value of the shares to be issued plus a conceivable surcharge on account of overprice; the remuneration must not exceed the amount at which these valuables may be credited in the Company’s accounts’.

40

(41)  PTA Decision No 32/2008 of 30 December 2008.

41

(42)  PTA Decision No 14/2010 of 21 May 2010, p. 15.

42

(43)  PTA Decision No 25/2010 of 7 September 2010.

43

(44)  PTA Decision No 39/2010 of 22 December 2010, p. 21.

44

(45)  PTA Decision No 39/2010 of 22 December 2010, p. 21.

45

(46)  Document No 840229, p. 8.

46

(47)  PTA Decision No 39/2010 of 22 December 2010, p. 24 and 26.

47

(48)  PTA Decision No 2/2014 of 24 March 2014, p. 35.

48

(49)  PTA Decision No 2/2014 of 24 March 2014, p. 40–42.

49

(50)  According to Article 13, paragraph 4, of the Act on the Post and Telecom Administration No 69/2003, a party can decide to avoid the Ruling Committee and appeal a decision of the PTA directly to the District Court within 3 months from the time they are aware of the decision.

50

(51)  Supreme Court of Iceland judgment of 27 March 2015 in Case No 219/2015.

51

(52)  PTA Decision No 3/2019 of 20 March 2019.

52

(53)  PTA Decision No 3/2019 of 20 March 2019, paragraphs 372–373.

53

(54)  PTA Decision No 3/2019 of 20 March 2019, paragraph 375.

54

(55)  PTA Decision No 3/2019 of 20 March 2019, paragraph 353.

55

(56)  PTA Decision No 3/2019 of 20 March 2019, paragraph 353.

56

(57)  PTA Decision No 3/2019 of 20 March 2019, paragraph 354.

57

(58)  PTA Decision No 26/2013 of 1 November 2013.

58

(59)  PTA Decision No 11/2015 of 2 June 2015.

59

(60)  Reply from the Icelandic authorities, dated 7 February 2017, pages 2 and 3. Document No 840228.

60

(61)  The Authority’s Guidelines on the notion of state aid (‘NoA’) (OJ L 342, 21.12.2017, p. 35), and EEA Supplement No 82, 21 December 2017, p. 1, paragraph 49.

61

(62)  Judgment in SFEI and others, C-39/94, EU:C:1996:285, paragraph 62.

62

SFEI and others

(63)  NoA, paragraph 41.

63

(64)  Judgment in France v Commission (Stardust Marine), C-482/99, EU:C:2002:294, paragraph 55.

64

France

Commission (Stardust Marine)

(65)  https://www.althingi.is/lagas/nuna/2013136.html.

65

(66)  https://www.reglugerd.is/reglugerdir/allar/nr/297-2006.

66

(67)  See for example: https://reykjavik.is/sites/default/files/ymis_skjol/skjol_utgefid_efni/city_of_ reykjavik_-_financial_statements_2018.pdf.

67

(68)  https://www.or.is/um-or/skipulag-og-stjornhaettir/stjorn/. .

68

(69)  See Article 2 of OR’s ownership policy: https://www.or.is/um-or/skipulag-og-stjornhaettir/eigendastefna/,

69

(70)  Article 16 of the Electricity Act No 65/2003.

70

(71)  See Article 6 of OR’s ownership policy: https://www.or.is/um-or/skipulag-og-stjornhaettir/eigendastefna/. .

71

(72)  See Report of the Enquiry Committee on Orkuveita Reykjavíkur, page 73, https://rafhladan.is/handle/10802/5777.

72

(73)  Judgments in Pavlov and others, C-180/98 to C-184/98, EU:C:2000:428, paragraph 74, and Cassa di Risparmio di Firenze and others, C-222/04, EU:C:2006:8, paragraph 107; Case E-5/07 Private Barnehagers Landsforbund [2008] EFTA Ct. Rep. 62, paragraph 78.

73

Pavlov and others

Cassa di Risparmio di Firenze and others

Private Barnehagers Landsforbund

(74)  Judgment in Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe, C-74/16, EU:C:2017:496, paragraph 42.

74

Congregación de Escuelas Pías Provincia Betania

Ayuntamiento de Getafe

(75)  Judgment in Cassa di Risparmio di Firenze and Others, C-222/04, EU:C:2006:8, paragraph 108; and Case E-29/15 Sorpa [2016] EFTA Ct. Rep. 825, paragraph 72.

75

Cassa di Risparmio di Firenze and Others

Sorpa

(76)  Judgment in Congregación de Escuelas Pías Provincia Betania, C-74/16, EU:C:2017:496, paragraph 51.

76

Congregación de Escuelas Pías Provincia Betania

(77)  See https://www.ljosleidarinn.is/gagnaveita-reykjavikur.

77

(78)  See the Authority’s Decision No 444/13/COL, The Deployment of a Next Generation Access network in the municipality of Skeiða- and Gnúpverjahreppur (OJ C 66, 6.3.2014, p. 6) and EEA Supplement No 82, 21 December 2017, p. 1, paragraph 56.

78

The Deployment of a Next Generation Access network in the municipality of Skeiða- and Gnúpverjahreppur

(79)  Judgments in SFEI and Others, C-39/94, EU:C:1996:285, paragraph 60, and Spain v Commission, C-342/96, EU:C:1999:210, paragraph 41.

79

SFEI and Others

Spain

Commission

(80)  NoA, chapter 4.2.

80

(81)  For the application of the MEO test, see Case E-12/11 Asker Brygge [2008] EFTA Ct. Rep. 536, and judgment in Land Burgenland, C-214/12 P, C-215/12 P and C-223/12 P, EU:C:2013:682.

81

Asker Brygge

Land Burgenland

(82)  NoA, paragraph 133.

82

(83)  Judgment in Land Burgenland, C-214/12 P, C-215/12 P and C-223/12 P, EU:C:2013:682.

83

Land Burgenland

(84)  See for example, the Opinion of Advocate-General Jacobs in Spain v Commission, C-278/92, C-279/92 and C-280/92, EU:C:1994:112, paragraph 28. See also judgments in Belgium v Commission, 40/85, EU:C:1986:305, paragraph 13, France v Commission, 301/87, EU:C:1990:67, paragraphs 39–40, and Italy v Commission, 303/88, EU:C:1991:136, paragraph 24.

84

Spain

Commission

Belgium

Commission

France

Commission

Italy

Commission

(85)  Document No 931139.

85

(86)  PTA Decision No 3/2019 of 20 March 2019, paragraphs 338–340.

86

(87)  Document No 1073308.

87

(88)  Judgment in Eesti Pagar, C-349/17, EU:C:2019:172, paragraph 89.

88

Eesti Pagar

(89)  Document No 1073308.

89

(90)  PTA Decision No 25/2010 of 7 September 2010.

90

(91)  PTA Decision No 25/2010 of 7 September 2010.

91

(92)  Judgment in Eesti Pagar, C-349/17, EU:C:2019:172, paragraph 142.

92

Eesti Pagar

(93)  PTA Decision No 11/2015 of 2 June 2015.

93

(94)  PTA Decision No 3/2019 of 20 March 2019.

94

(95)  PTA Decision No 3/2019 of 20 March 2019, paragraph 353.

95

(96)  PTA Decision No 3/2019 of 20 March 2019, paragraph 353.

96

(97)  Case E-6/98 Norway v ESA [1999] EFTA Ct. Rep. 76.

97

Norway

ESA

(98)  See for example judgments in Eventech, C-518/13, EU:C:2015:9, paragraph 66, Libert and others, C-197/11 and C-203/11, EU:C:2013:288, paragraph 77, Friulia Venezia Giulia, T-288/97, EU:T:2001:115, paragraph 41.

98

Eventech

Libert and others

Friulia Venezia Giulia

(99)  Judgment in Italy v Commission, C-364/90, EU:C:1993:157, paragraph 20.

99

Italy

Commission

(100)  OJ L 154, 8.6.2006, p. 27 and EEA Supplement No 29, 8 June 2006, p. 1.

100

---

V Announcements

COURT PROCEEDINGS

EFTA Court

| 6.2.2020 | EN | Official Journal of the European Union | C 40/33 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/33

---

EFTA COURT JUDGMENT OF THE COURT

of 13 November 2019

in Case E-2/19

D and E

(Free movement of persons – Sectoral adaptations for Liechtenstein – Right of residence – Derived right of residence for family members – Directive 2004/38/EC)

(2020/C 40/04)

In Case E-2/19, D and E – REQUEST to the Court under Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice by the Administrative Court of the Principality of Liechtenstein (Verwaltungsgerichtshof des Fürstentums Liechtenstein) concerning the interpretation of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, as adapted to the Agreement on the European Economic Area, the Court, composed of Páll Hreinsson, President (Judge-Rapporteur), Bernd Hammermann and Ola Mestad (ad hoc), Judges, gave judgment on 13 November 2019, the operative part of which is as follows:

The sectoral adaptations to Annexes V and VIII to the EEA Agreement, in particular Point III thereof, do not deprive the family member of an EEA national, who has a valid residence permit and is residing in Liechtenstein, of the right to accompany or join the EEA national in Liechtenstein on the basis of Article 7(1)(d) of Directive 2004/38/EC, even though the residence permit that the EEA national in Liechtenstein holds was not granted on the basis of the system provided for in the sectoral adaptations.

---

PROCEDURES RELATING TO THE IMPLEMENTATION OF THE COMMON COMMERCIAL POLICY

European Commission

| 6.2.2020 | EN | Official Journal of the European Union | C 40/34 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/34

---

Notice of the impending expiry of certain anti-dumping measures

(2020/C 40/05)

1.   As provided for in Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1), the Commission gives notice that, unless a review is initiated in accordance with the following procedure, the anti-dumping measures mentioned below will expire on the date mentioned in the table below.

2.   Procedure

Union producers may lodge a written request for a review. This request must contain sufficient evidence that the expiry of the measures would be likely to result in a continuation or recurrence of dumping and injury. Should the Commission decide to review the measures concerned, importers, exporters, representatives of the exporting country and Union producers will then be provided with the opportunity to amplify, rebut or comment on the matters set out in the review request.

3.   Time limit

Union producers may submit a written request for a review on the above basis, to reach the European Commission, Directorate-General for Trade (Unit H-1), CHAR 4/39, B-1049 Brussels Belgium (2) at any time from the date of the publication of the present notice but no later than three months before the date mentioned in the table below.

4.   This notice is published in accordance with Article 11(2) of Regulation (EU) 2016/1036.

| Product | Country(ies) of origin or exportation | Measures | Reference | Date of expiry (3) |
| --- | --- | --- | --- | --- |
| Certain grain-oriented flat-rolled products of silicon-electrical steel | The People’s Republic of China
  Japan
  The Republic of Korea
  The Russian Federation
  The United States of America | Anti-dumping duty | Commission Implementing Regulation (EU) 2015/1953 of 29 October 2015 imposing a definitive anti-dumping duty on imports of certain grain-oriented flat-rolled products of silicon-electrical steel originating in the People’s Republic of China, Japan, the Republic of Korea, the Russian Federation and the United States of America
  (OJ L 284, 30.10.2015, p. 109) | 31.10.2020 |

Product

Country(ies) of origin or exportation

Measures

Reference

Date of expiry (3)

Certain grain-oriented flat-rolled products of silicon-electrical steel

The People’s Republic of China

Japan

The Republic of Korea

The Russian Federation

The United States of America

Anti-dumping duty

Commission Implementing Regulation (EU) 2015/1953 of 29 October 2015 imposing a definitive anti-dumping duty on imports of certain grain-oriented flat-rolled products of silicon-electrical steel originating in the People’s Republic of China, Japan, the Republic of Korea, the Russian Federation and the United States of America

(OJ L 284, 30.10.2015, p. 109)

31.10.2020

---

(1)  OJ L 176, 30.6.2016, p. 21.

(2)  TRADE-Defence-Complaints@ec.europa.eu

(3)  The measure expires at midnight of the day mentioned in this column

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PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY

European Commission

| 6.2.2020 | EN | Official Journal of the European Union | C 40/35 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/35

---

Prior notification of a concentration

(Case M.9714 — Viacom/beIN/Miramax)

Candidate case for simplified procedure

(Text with EEA relevance)

(2020/C 40/06)

1.

This notification concerns the following undertakings:

| — | Viacom International Inc. (‘Viacom’, USA), belonging to ViacomCBS Inc., |
| --- | --- |

—

Viacom International Inc. (‘Viacom’, USA), belonging to ViacomCBS Inc.,

| — | beIN Media Group, LLC (‘beIN’, Qatar), belonging to beIN Corporation, |
| --- | --- |

—

beIN Media Group, LLC (‘beIN’, Qatar), belonging to beIN Corporation,

| — | MMX Media Finance, LLC (‘Miramax’, USA), currently solely controlled by beIN. |
| --- | --- |

—

MMX Media Finance, LLC (‘Miramax’, USA), currently solely controlled by beIN.

Viacom and beIN acquire within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation joint control of Miramax.

The concentration is accomplished by way of purchase of shares.

2.

| — | for Viacom: global media and entertainment company, |
| --- | --- |

—

for Viacom: global media and entertainment company,

| — | for beIN: entertainment company active, inter alia, in the sports media business, |
| --- | --- |

—

for beIN: entertainment company active, inter alia, in the sports media business,

| — | for Miramax: entertainment company producing and distributing films and television shows. |
| --- | --- |

—

for Miramax: entertainment company producing and distributing films and television shows.

3.

Pursuant to the Commission Notice on a simplified procedure for treatment of certain concentrations under the Council Regulation (EC) No 139/2004 (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice.

4.

Observations must reach the Commission not later than 10 days following the date of this publication. The following reference should always be specified:

M.9714 — Viacom/beIN/Miramax

Observations can be sent to the Commission by email, by fax, or by post. Please use the contact details below:

Email: COMP-MERGER-REGISTRY@ec.europa.eu

Fax +32 22964301

Postal address:

| European Commission |
| --- |
| Directorate-General for Competition |
| Merger Registry |
| 1049 Bruxelles/Brussel |
| BELGIQUE/BELGIË |

European Commission

Directorate-General for Competition

Merger Registry

1049 Bruxelles/Brussel

BELGIQUE/BELGIË

---

(1)  OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’).

1

(2)  OJ C 366, 14.12.2013, p. 5.

2

---

| 6.2.2020 | EN | Official Journal of the European Union | C 40/37 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/37

---

Prior notification of a concentration

(Case M.9719 — Fairfax Financial Holdings Limited/OMERS Administration Corporation/Riverstone Barbados Limited)

Candidate case for simplified procedure

(Text with EEA relevance)

(2020/C 40/07)

1.

This notification concerns the following undertakings:

| — | Fairfax Financial Holdings Limited (‘FFHL’, Canada), |
| --- | --- |

—

Fairfax Financial Holdings Limited (‘FFHL’, Canada),

| — | Kingston Infrastructure Holdings Inc. (‘Kingston’, Canada), controlled by OMERS Administration Corporation (‘OMERS’, Canada), |
| --- | --- |

—

Kingston Infrastructure Holdings Inc. (‘Kingston’, Canada), controlled by OMERS Administration Corporation (‘OMERS’, Canada),

| — | Riverstone Barbados Limited (‘Riverstone’, Barbados). |
| --- | --- |

—

Riverstone Barbados Limited (‘Riverstone’, Barbados).

FFHL and Kingston acquire within the meaning of Article 3(1)(b) and Article 3(4) of the Merger Regulation joint control of the whole of Riverstone.

The concentration is accomplished by way of purchase of shares.

2.

| — | FFHL is a holding company engaged in property and casualty insurance and reinsurance and associated investment management. |
| --- | --- |

—

FFHL is a holding company engaged in property and casualty insurance and reinsurance and associated investment management.

| — | OMERS is the administrator of the Ontario Minicipal Employees Retirement System Primary Pension Plan and trustee of the pension funds. It manages a diversified global portfolio of stocks and bonds as well as real estate, private equity and infrastructure investments. |
| --- | --- |

—

OMERS is the administrator of the Ontario Minicipal Employees Retirement System Primary Pension Plan and trustee of the pension funds. It manages a diversified global portfolio of stocks and bonds as well as real estate, private equity and infrastructure investments.

| — | Riverstone carries out the management of run-off insurance businesses and portfolios. |
| --- | --- |

—

Riverstone carries out the management of run-off insurance businesses and portfolios.

3.

Pursuant to the Commission Notice on a simplified procedure for treatment of certain concentrations under the Council Regulation (EC) No 139/2004 (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice.

4.

Observations must reach the Commission not later than 10 days following the date of this publication. The following reference should always be specified:

M.9719 — FFHL / OMERS / Riverstone

Observations can be sent to the Commission by email, by fax, or by post. Please use the contact details below:

Email: COMP-MERGER-REGISTRY@ec.europa.eu

Fax +32 22964301

Postal address:

| European Commission |
| --- |
| Directorate-General for Competition |
| Merger Registry |
| 1049 Bruxelles/Brussel |
| BELGIQUE/BELGIË |

European Commission

Directorate-General for Competition

Merger Registry

1049 Bruxelles/Brussel

BELGIQUE/BELGIË

---

(1)  OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’).

1

(2)  OJ C 366, 14.12.2013, p. 5.

2

---

OTHER ACTS

European Commission

| 6.2.2020 | EN | Official Journal of the European Union | C 40/38 |
| --- | --- | --- | --- |

6.2.2020

EN

Official Journal of the European Union

C 40/38

---

Notification of the approval of a standard amendment to a product specification for a name in the wine sector, as referred to in Article 17(2) and (3) of Commission Delegated Regulation (EU) 2019/33

(2020/C 40/08)

This notice is published in accordance with Article 17(5) of Commission Delegated Regulation (EU) 2019/33 (1)

COMMUNICATION OF APPROVAL OF A STANDARD AMENDMENT

‘Coteaux d’Ancenis’

PDO-FR-A0928-AM01

Date of communication: 12 November 2019

DESCRIPTION OF AND REASONS FOR THE APPROVED AMENDMENT

1.   Geographical area

The text concerning the geographical area has been amended as follows: ‘All steps in production take place in the geographical area approved by the Institut national de l’origine et de la qualité [National Origin and Quality Institute] at the meeting of the competent national committee on 28 September 2011. As at the date of approval of this specification by the competent national committee, this area comprises the territory of the following communes, based on the 2018 Official Geographical Code:

| — | Department of Loire-Atlantique: Ancenis, Carquefou, Le Cellier, Couffé, Divatte-sur-Loire (the territory of the delegated commune of Barbechat only), Ligné, Loireauxence (the territory of the delegated commune of Varades only), Mauves-sur-Loire, Mésanger, Montrelais, Oudon, Saint-Géréon, Thouaré-sur-Loire and Vair-sur-Loire. |
| --- | --- |

—

Department of Loire-Atlantique: Ancenis, Carquefou, Le Cellier, Couffé, Divatte-sur-Loire (the territory of the delegated commune of Barbechat only), Ligné, Loireauxence (the territory of the delegated commune of Varades only), Mauves-sur-Loire, Mésanger, Montrelais, Oudon, Saint-Géréon, Thouaré-sur-Loire and Vair-sur-Loire.

| — | Department of Maine-et-Loire: Mauges-sur-Loire (the territory of the delegated commune of La Chapelle-Saint-Florent only), Orée d’Anjou (the territory of the delegated communes of Bouzillé, Champtoceaux, Drain, Landemont, Liré and La Varenne only). |
| --- | --- |

—

Department of Maine-et-Loire: Mauges-sur-Loire (the territory of the delegated commune of La Chapelle-Saint-Florent only), Orée d’Anjou (the territory of the delegated communes of Bouzillé, Champtoceaux, Drain, Landemont, Liré and La Varenne only).

Maps of this geographical area can be found on the website of the National Origin and Quality Institute.’

This is an editorial change: the new list of administrative entities reflects mergers and other administrative zoning changes that have taken place since the specification was approved. For greater legal certainty, the list is now referenced to the latest version of the Official Geographical Code, updated yearly by the National Institute of Statistics and Economic Studies (INSEE).

Finally, in the interests of better public information, the product specification now states that maps of the geographical area can be found on the National Origin and Quality Institute’s website.

Point 6 of the single document (Demarcated geographical area) has been amended accordingly.

2.   Demarcated parcel area

In Chapter I, Section IV(2), the word ‘demarcated’ has been replaced by the word ‘production’;

This is an editorial change which does not amend the demarcated area.

The single document is not affected by this amendment.

3.   Area in immediate proximity

In Chapter I, Section IV(3), the list of communes has been replaced by:

| — | Department of Loire-Atlantique: La Boissière-du-Doré, La Chapelle-Heulin, Divatte-sur-Loire (the territory of the delegated commune of La Chapelle-Basse-Mer only), Gorges, Haute-Goulaine, Le Landreau, Le Loroux-Bottereau, Maisdon-sur-Sèvre, Mouzillon, La Remaudière, Saint-Julien-de-Concelles and Vallet. |
| --- | --- |

—

Department of Loire-Atlantique: La Boissière-du-Doré, La Chapelle-Heulin, Divatte-sur-Loire (the territory of the delegated commune of La Chapelle-Basse-Mer only), Gorges, Haute-Goulaine, Le Landreau, Le Loroux-Bottereau, Maisdon-sur-Sèvre, Mouzillon, La Remaudière, Saint-Julien-de-Concelles and Vallet.

| — | Department of Maine-et-Loire: Montrevault-sur-Èvre (the territory of the delegated communes of Puiset-Doré and Saint-Rémy-en-Mauges only), Orée d’Anjou (the territory of the delegated communes of Saint-Laurent-des-Autels and Saint-Sauveur-de-Landemont only) and Sèvremoine (the territory of the delegated commune of Tillières only). |
| --- | --- |

—

Department of Maine-et-Loire: Montrevault-sur-Èvre (the territory of the delegated communes of Puiset-Doré and Saint-Rémy-en-Mauges only), Orée d’Anjou (the territory of the delegated communes of Saint-Laurent-des-Autels and Saint-Sauveur-de-Landemont only) and Sèvremoine (the territory of the delegated commune of Tillières only).

This is an editorial change: the new list of administrative entities reflects mergers and other administrative zoning changes that have taken place since the specification was approved.

Point 9 of the single document (Further conditions) has been amended accordingly.

4.   Vine varieties

The red and rosé wines may now be produced with cabernet franc as a secondary variety.

Cabernet franc is a grape variety traditionally grown in the area and used to make ‘Coteaux d’Ancenis’, which brings a certain structure to the wine without affecting its distinctive characteristics. This helps to assure production, as cabernet franc is less sensitive to frost than gamay and less susceptible to fungal diseases.

The single document is not affected by this amendment.

5.   Blending

| — | In Chapter I, the following point has been added to Section V:






  ‘2° | - rules on the proportion of varieties to be planted |
| --- | --- | --- |

—

In Chapter I, the following point has been added to Section V:

‘2°

- rules on the proportion of varieties to be planted

The secondary variety must not account for more than 10% of the varieties planted.

Vine variety compliance, for the colour in question, must be assessed on all the parcels of the holding producing wines covered by the registered designation of origin.’

| — | In Chapter I, the following has been added to Section IX:






  ‘a) | – Blending of varieties |
| --- | --- | --- |

—

In Chapter I, the following has been added to Section IX:

‘a)

– Blending of varieties

The red and rosé wines are made by blending grapes or wines in the same proportions as those laid down for the planting of vine varieties.’

With the addition of cabernet franc, a rule had to been added under ‘Vine varieties’ and ‘Blending’ that limits the proportion of this variety to 10%.

The single document is not affected by this amendment.

6.   Packaging

In Section IX(2) the length of time for which the results of tests carried out on batches of packaged wine must be kept has been increased from 6 months to 12 months in the interests of better compliance checking.

The single document is not affected by this amendment.

7.   Circulation between authorised warehouses

Section IX(4)(b) of Chapter 1, which stated the date on which wines could begin circulating between authorised warehouse-keepers, has been deleted.

The single document is not affected by this amendment.

8.   Link with the geographical area

The text has been revised to update the number of communes covered (16 instead of 22).

Point 8 of the single document (Link with the geographical area) has been amended accordingly.

9.   Transitional measure

The transitional measures that have expired have been deleted from the specification.

The single document is not affected by this amendment.

10.   Labelling

A new point has been added to section XII: ‘c) The name of a smaller geographical unit may appear on the labels of wines covered by the registered designation of origin, provided that:

| — | it is a registered location; |
| --- | --- |

—

it is a registered location;

| — | it appears on the harvest declaration. |
| --- | --- |

—

it appears on the harvest declaration.

The name of the registered location must be printed in letters that are no larger, in height, width or thickness, that half the size of the letters spelling the designation of origin. It must appear in the same visual field as the registered designation of origin.’

Point 9 of the single document (further conditions) has been amended accordingly.

11.   Advance declaration of parcel assignment

In Chapter II, Section I(1), the five-year limit on the validity of tacit renewals has been removed. This is to avoid any problems that could arise from a failure to remember. Tacit renewals now continue to be valid until the operator notifies a change.

The single document is not affected by this amendment.

12.   Claim declaration

The deadline for submitting a claim declaration is now 31 December instead of 10 December.

The single document is not affected by this amendment.

13.   Prior declaration of a transaction relating to unpackaged wine

In Chapter II, Section II(3), first paragraph, the word ‘first’ has been added before the word ‘transaction’ and the words ‘of the first batch of the year in question or the first placing on the market for sale to the consumer’ have been added after the word ‘transaction’.

The single document is not affected by this amendment.

14.   Prior declaration of packaging

In Chapter II, Section II(4), the following indent has been added:

| ‘ – | the expected date of packaging’ |
| --- | --- |

‘ –

the expected date of packaging’

The single document is not affected by this amendment.

15.   Declaration of declassification

In Chapter II, Section II(6), the words ‘within a month’ have been replaced by ‘at the latest by 15 December’

The single document is not affected by this amendment.

16.   Vineyard register

Section II(1) of Chapter II, has been amended to read:

| ‘ 1° | - Vineyard register






  a) | All operators who grow vines suitable for the production of wines covered by the registered designation of origin must, before 1 June in the year of harvest, complete a register indicating the parcels that they no longer wish to use for the production of such wines and where they do not wish to apply the production conditions governing vineyards that are used to produce such wines.
  The protection and management body may ask operators to provide them with a copy of the register. |
| --- | --- | --- |

‘ 1°

- Vineyard register

a)

All operators who grow vines suitable for the production of wines covered by the registered designation of origin must, before 1 June in the year of harvest, complete a register indicating the parcels that they no longer wish to use for the production of such wines and where they do not wish to apply the production conditions governing vineyards that are used to produce such wines.

The protection and management body may ask operators to provide them with a copy of the register.

| b) | All operators affected by one or more transitional measures must be able to provide the protection and management body and the authorised inspection body with an inventory of the parcels concerned, indicating:






  — | the land register reference of the parcel; |
| --- | --- | --- |

b)

All operators affected by one or more transitional measures must be able to provide the protection and management body and the authorised inspection body with an inventory of the parcels concerned, indicating:

—

the land register reference of the parcel;

| — | the transitional measure in question.’ |
| --- | --- |

—

the transitional measure in question.’

The single document is not affected by this amendment.

17.   Storehouse register

In Chapter II, Section II(2) the term ‘logbook’ has been replaced by ‘register’ and it is now stated that declassifications are entered in the register.

The single document is not affected by this amendment.

18.   Compliance checklist

Chapter III has been revised to ensure consistency across the checklists included in the different product specifications for Pays nantais wines.

The single document is not affected by this amendment.

SINGLE DOCUMENT

1.   Name of product

Coteaux d’Ancenis

2.   Type of geographical indication

PDO – Protected Designation of Origin

3.   Category of grapevine product

| 1. | Wine |
| --- | --- |

1.

Wine

4.   Description of the wine(s)

Red wines

The wines are still red wines.

The analytical characteristics of the wines are as follows:

| — | Minimum natural alcoholic strength by volume: 10.5% for red wines |
| --- | --- |

—

Minimum natural alcoholic strength by volume: 10.5% for red wines

| — | Total maximum alcoholic strength by volume after enrichment: 12.5% for red wines |
| --- | --- |

—

Total maximum alcoholic strength by volume after enrichment: 12.5% for red wines

| — | Total acidity: between 57.1 and 102.1 milliequivalents per litre for red wines |
| --- | --- |

—

Total acidity: between 57.1 and 102.1 milliequivalents per litre for red wines

| — | Maximum volatile acid content: 13.3 milliequivalents per litre for red wines |
| --- | --- |

—

Maximum volatile acid content: 13.3 milliequivalents per litre for red wines

| — | Fermentable sugar content (glucose and fructose): not more than 3 g per litre for red wines |
| --- | --- |

—

Fermentable sugar content (glucose and fructose): not more than 3 g per litre for red wines

| — | Maximum malic acid content: not more than 0.3 g per litre for red wines. Malolactic fermentation is completed for the red wines. |
| --- | --- |

—

Maximum malic acid content: not more than 0.3 g per litre for red wines. Malolactic fermentation is completed for the red wines.

The total sulphur dioxide content and the total actual alcoholic strength of the red wines follow the rules laid down in EU legislation.

The red wines are bright in colour, with tints ranging from cherry red to garnet red. The nose is frequently dominated by red fruit aromas, sometimes combined with hints of spice. They generally possess elegant tannins that give them a smooth, tender quality together with a certain freshness.

| General analytical characteristics |
| --- |
| Maximum total alcoholic strength (in % volume) | |
| Minimum actual alcoholic strength (in % volume) | |
| Minimum total acidity | |
| Maximum volatile acidity (in milliequivalents per litre) | |
| Maximum total sulphur dioxide (in milligrams per litre) | |

General analytical characteristics

Maximum total alcoholic strength (in % volume)

Minimum actual alcoholic strength (in % volume)

Minimum total acidity

Maximum volatile acidity (in milliequivalents per litre)

Maximum total sulphur dioxide (in milligrams per litre)

White wines

The wines are still white wines.

The analytical characteristics of the wines are as follows:

| — | Minimum natural alcoholic strength by volume: 11.5% for white wines |
| --- | --- |

—

Minimum natural alcoholic strength by volume: 11.5% for white wines

| — | Total maximum alcoholic strength by volume after enrichment: 13.5% for white wines |
| --- | --- |

—

Total maximum alcoholic strength by volume after enrichment: 13.5% for white wines

| — | Total acidity: between 57.1 and 112.3 milliequivalents per litre for white wines |
| --- | --- |

—

Total acidity: between 57.1 and 112.3 milliequivalents per litre for white wines

| — | Fermentable sugar content (glucose and fructose): between 20 g and 40 g per litre for white wines |
| --- | --- |

—

Fermentable sugar content (glucose and fructose): between 20 g and 40 g per litre for white wines

The white wines, opulently yellow in colour, generally develop intense aromatic notes reminiscent of ripe or exotic fruit. The rules governing their analytical characteristics generally guarantee the fine balance these wines have on the palate: the fullness bestowed by the fermentable sugars counterbalances the freshness typical of Loire wines.

| General analytical characteristics |
| --- |
| Maximum total alcoholic strength (in % volume) | |
| Minimum actual alcoholic strength (in % volume) | 10 |
| Minimum total acidity | |
| Maximum volatile acidity (in milliequivalents per litre) | 13.3 |
| Maximum total sulphur dioxide (in milligrams per litre) | |

General analytical characteristics

Maximum total alcoholic strength (in % volume)

Minimum actual alcoholic strength (in % volume)

10

Minimum total acidity

Maximum volatile acidity (in milliequivalents per litre)

13.3

Maximum total sulphur dioxide (in milligrams per litre)

Rosé wines

The wines are still rosé wines.

Their analytical characteristics are as follows:

| — | Minimum natural alcoholic strength by volume: 10% for rosé wines |
| --- | --- |

—

Minimum natural alcoholic strength by volume: 10% for rosé wines

| — | Total maximum alcoholic strength by volume after enrichment: 12% for rosé wines |
| --- | --- |

—

Total maximum alcoholic strength by volume after enrichment: 12% for rosé wines

| — | Total acidity: between 57.1 and 102.1 milliequivalents per litre for rosé wines |
| --- | --- |

—

Total acidity: between 57.1 and 102.1 milliequivalents per litre for rosé wines

| — | Maximum volatile acidity: 10.2 milliequivalents per litre for rosé wines |
| --- | --- |

—

Maximum volatile acidity: 10.2 milliequivalents per litre for rosé wines

| — | Fermentable sugar content (glucose and fructose): not more than 4 g per litre for rosé wines |
| --- | --- |

—

Fermentable sugar content (glucose and fructose): not more than 4 g per litre for rosé wines

The total sulphur dioxide content and the total actual alcoholic strength of the rosé wines follow the rules laid down in EU legislation.

The rosé wines are light in colour, ranging from pale pink to salmon pink. Their fine, subtle aromas have a certain freshness and generally manifest themselves in the form of fruity notes. These wines are characteristically light and fresh on the palate, with a touch of liveliness.

| General analytical characteristics |
| --- |
| Maximum total alcoholic strength (in % volume) | |
| Minimum actual alcoholic strength (in % volume) | |
| Minimum total acidity | |
| Maximum volatile acidity (in milliequivalents per litre) | |
| Maximum total sulphur dioxide (in milligrams per litre) | |

General analytical characteristics

Maximum total alcoholic strength (in % volume)

Minimum actual alcoholic strength (in % volume)

Minimum total acidity

Maximum volatile acidity (in milliequivalents per litre)

Maximum total sulphur dioxide (in milligrams per litre)

5.   Pine-making practices

a.   Essential oenological practices

Cultivation method

The minimum planting density of the vines is 6 000 plants per hectare.

The distance between rows is not more than 1.60 m and the distance between plants in the same row is between 0.90 m and 1.10 m.

The vines are pruned with a maximum of 12 buds per plant:

| — | either by short pruning (Cordon de Royat, goblet pruning, fan pruning); |
| --- | --- |

—

either by short pruning (Cordon de Royat, goblet pruning, fan pruning);

| — | or single Guyot pruning. |
| --- | --- |

—

or single Guyot pruning.

Pruning is done before 31 May in the year of harvest.

At the fruit set stage, the number of fruit-bearing branches for the year per plant is not more than 10.

Specific oenological practice

The use of oenological charcoal when making the rosé wines is forbidden, whether alone or mixed in a preparation.

Reductive methods of enrichment are permitted for the red wines, with the maximum partial concentration rate set at 10% in relation to the volumes used.

After enrichment, the wines’ total alcoholic strength by volume must not exceed: 13.5% for white wines, 12% for rosé wines and 12.5% for red wines.

In addition to the above provisions, the oenological practices concerning these wines must meet the requirements laid down at Community level and in the Rural and Maritime Fishing Code.

b.   Maximum yields

White wines

55 hectolitres per hectare

Red and rosé wines

66 hectolitres per hectare

6.   Demarcated geographical area

All steps in production take place in the geographical area approved by the National Origin and Quality Institute at the meeting of the competent national committee on 28 September 2011. As at the date of approval of this specification by the competent national committee, this area comprises the territory of the following communes, based on the 2018 Official Geographical Code:

| — | Department of Loire-Atlantique: Ancenis, Carquefou, Le Cellier, Couffé, Divatte-sur-Loire (the territory of the delegated commune of Barbechat only), Ligné, Loireauxence (the territory of the delegated commune of Varades only), Mauves-sur-Loire, Mésanger, Montrelais, Oudon, Saint-Géréon, Thouaré-sur-Loire and Vair-sur-Loire. |
| --- | --- |

—

Department of Loire-Atlantique: Ancenis, Carquefou, Le Cellier, Couffé, Divatte-sur-Loire (the territory of the delegated commune of Barbechat only), Ligné, Loireauxence (the territory of the delegated commune of Varades only), Mauves-sur-Loire, Mésanger, Montrelais, Oudon, Saint-Géréon, Thouaré-sur-Loire and Vair-sur-Loire.

| — | Department of Maine-et-Loire: Mauges-sur-Loire (the territory of the delegated commune of La Chapelle-Saint-Florent only), Orée d’Anjou (the territory of the delegated communes of Bouzillé, Champtoceaux, Drain, Landemont, Liré and La Varenne only). |
| --- | --- |

—

Department of Maine-et-Loire: Mauges-sur-Loire (the territory of the delegated commune of La Chapelle-Saint-Florent only), Orée d’Anjou (the territory of the delegated communes of Bouzillé, Champtoceaux, Drain, Landemont, Liré and La Varenne only).

7.   Main wine grape varieties

Gamay N

Pinot gris G

8.   Description of the link(s)

Description of the natural factors relevant to the link

The geographical area extends across both banks of the river Loire, halfway between the cities of Nantes and Angers. The vines are mainly grown on the hillsides directly facing the river, and sometimes also on the slopes of secondary valleys. They are planted in tiers, generally at altitudes of between 20 m and 80 m, and stand out against the surrounding plateaus, where the land is used for mixed-crop and livestock farming. The geographical area, centred on the commune of Ancenis, extends across 16 communes in the departments of Loire-Atlantique and Maine-et-Loire.

The vineyard lies above the ancient metamorphic formations of the Armorican Massif, which are primarily composed of schists, mica-schists and gneiss. These hard rocks have given rise to siliceous, often gravelly soils which are very shallow on the slopes and were once subject to erosion by the river Loire. Following local customs, the area marked out for grape harvesting is carefully restricted to hillside parcels which have chiefly and traditionally been used for winegrowing and have healthy, shallow soils which are moderately fertile with limited water reserves. These soils are quick to dry out and to heat.

The geographical area enjoys a temperate oceanic climate. The river Loire helps to convey the sea’s climatic influence inland, all the more so as, in the Ancenis region, the direction of the current is the same as the direction of the prevailing winds. The average yearly temperature is generally around 11.5 °C, with mild winters and cool summers. Precipitation averages around 700 mm yearly and is distributed throughout the year in a fairly even manner, although summer is significantly dryer than the other seasons. There is often a dry, windy period at the beginning of autumn, before the high spring tides.

Description of the human factors relevant to the link

Grapes have been grown in the Ancenis region since ancient times, but winegrowing is thought to have become more widespread from the 11th century, when many priories were built along the banks of the river Loire. The tithes that were paid on grapevine products attest to prolific viticultural activity along the banks of the Loire during the Middle Ages. The port of Ancenis swiftly came to play a central role in the sale and transportation of the region’s wines. Thus, in 1573, Charles IX authorised the establishment of four ‘wine gourmet’ brokers’ offices at the port of Ancenis. The number of offices was increased to ten in 1584, and, under Louis XVI, there were regularly as many as twenty boats in Ancenis involved in the wine trade.

In the 17th century, the vineyards of Ancenis began to increase their production of sweet white wines as the Pinot Gris G grape variety was introduced. The resulting wine gradually came to be known as ‘Malvoisie’. The other grape varieties appeared later; Gamay N, for instance, was introduced towards the middle of the 19th century. The wine trade was then at its peak and the wines were shipped to Paris via Orleans, or to Northern Europe and Brittany via the main square of Nantes.

After the phylloxera epidemic, the vineyards were restored and definitively adopted the grape varieties and cultivation practices that are still in use today, including a planting density standard of between 6 000 and 7 000 plants per hectare. Dry rosé wines and red wines replaced the ‘Malvoisie’ sweet white wines as the most commonly produced types of wine. The creation of a wine-makers’ syndicate for the arrondissement of Ancenis in 1907 attests to the continued vitality of the local winemaking industry. The production rules adopted by the manufacturers after the second World War led to the recognition in 1954 of ‘Coteaux d’Ancenis’ as an appellation d’origine vin délimité de qualité supérieure.

In 2009, the vineyards covered 180 hectares and were farmed by around thirty winegrowers, yielding an annual production of over 10 000 hectolitres, made up of 45% rosé wines, 38% red wines and 17% white wines. The white wines, opulently yellow in colour, generally develop intense aromatic notes reminiscent of ripe or exotic fruit. The rules governing their analytical characteristics are what generally guarantee the considerable balance these wines possess on the palate: the fullness bestowed by the fermentable sugars counterbalances the freshness typical of Loire wines.

The red wines are bright in colour, with tints ranging from cherry red to garnet red. The nose is frequently dominated by red fruit aromas, sometimes combined with hints of spice. They generally possess elegant tannins that give them a smooth, tender quality together with a certain freshness.

The rosé wines are light in colour, ranging from pale pink to salmon pink. Their fine, subtle aromas have a certain freshness and generally manifest themselves in the form of fruity notes. These wines are characteristically light and fresh on the palate, with a touch of liveliness. The geographical area is located on the border of the Nantes and Anjou vineyards, by the side of the major waterway that is the river Loire, and the makers of ‘Coteaux d’Ancenis’ were able to take advantage of this twofold influence to establish a series of production techniques adapted to their natural environment.

The hillsides in the geographical area, shaped by the Loire as it flows through the metamorphic formations of the Armorican Massif, typically have soils whose high warmth absorption capabilities, rapid natural drainage and limited water reserves are good for the ripening of grapes; hence the development, starting in the Middle Ages, of a thriving commercial winemaking industry around the port of Ancenis. Furthermore, the local climate, despite being under oceanic influence, is distinctive in that there is often a dry, windy spell around the end of summer and the beginning of autumn. Together with the open landscapes along the banks of the Loire, these environmental conditions are a major factor behind the development of a red and rosé wine industry in the region. The poor, acidic soil of the land parcels allocated to vine-growing is particularly suitable for the Gamay N grape variety, acting as a restraint on its often-noted vitality and explaining how it has replaced existing red grape varieties despite being introduced relatively late. Vineyard management by means of well-adapted cultivation techniques and the restriction of yields brings out the full range of aromas in the red wine and allows the rosé wines to express delicate fruity notes.

The climate also makes it possible to produce sweet white wines by harvesting ripe, healthy grapes. In addition, it has enabled the swift acclimatisation of the fragile Pinot Gris G variety. The geographical area’s mild summers are an important advantage, helping to preserve the fineness of the grape’s aromas as well as ensuring the wines’ characteristic freshness by curbing the deterioration of the organic acids present in the grapes. Known locally as ‘Malvoisie’, these truly original wines are symbolic of the region’s winemaking heritage.

Unionised since the beginning of the 20th century, the growers have consistently worked to improve the quality of their products. The recognition of ‘Coteaux d’Ancenis’ as a registered designation of origin, the consolidation of the land parcels allocated to winegrowing to focus on the best hillsides, the move towards using only Gamay N and Pinot Gris N as the principal grape varieties, and stricter production rules are strong signs that the unique character of these wines is assured for the future.

9.   Essential further conditions (packaging, labelling, other requirements)

Legal framework:

National legislation

Type of further condition:

Derogation concerning production in the demarcated geographical area

Description of the condition:

The area in immediate proximity, defined by derogation for the making and development of the wines, comprises the territory of the following communes, based on the 2018 Official Geographical Code:

| — | Department of Loire-Atlantique: La Boissière-du-Doré, La Chapelle-Heulin, Divatte-sur-Loire (the territory of the delegated commune of La Chapelle-Basse-Mer only), Gorges, Haute-Goulaine, Le Landreau, Le Loroux-Bottereau, Maisdon-sur-Sèvre, Mouzillon, La Remaudière, Saint-Julien-de-Concelles and Vallet. |
| --- | --- |

—

Department of Loire-Atlantique: La Boissière-du-Doré, La Chapelle-Heulin, Divatte-sur-Loire (the territory of the delegated commune of La Chapelle-Basse-Mer only), Gorges, Haute-Goulaine, Le Landreau, Le Loroux-Bottereau, Maisdon-sur-Sèvre, Mouzillon, La Remaudière, Saint-Julien-de-Concelles and Vallet.

| — | Department of Maine-et-Loire: Montrevault-sur-Èvre (the territory of the delegated communes of Puiset-Doré and Saint-Rémy-en-Mauges only), Orée d’Anjou (the territory of the delegated communes of Saint-Laurent-des-Autels and Saint-Sauveur-de-Landemont only), Sèvremoine (the territory of the delegated commune of Tillières only). |
| --- | --- |

—

Department of Maine-et-Loire: Montrevault-sur-Èvre (the territory of the delegated communes of Puiset-Doré and Saint-Rémy-en-Mauges only), Orée d’Anjou (the territory of the delegated communes of Saint-Laurent-des-Autels and Saint-Sauveur-de-Landemont only), Sèvremoine (the territory of the delegated commune of Tillières only).

Legal framework:

National legislation

Type of further condition:

Additional provisions relating to labelling

Description of the condition:

The name of the registered designation of origin may be supplemented by the geographical name ‘Val de Loire’ in accordance with the rules laid down in the product specification regarding the use of that name.

The name of the registered designation of origin may be supplemented by the name in current use ‘Malvoisie’ in accordance with the rules laid down in the product specification regarding the use of that name. The name may only be used for still white wines.

All optional terms whose use, under Community provisions, may be regulated by the Member States are printed on the labels in letters that may not be larger, in height, width or thickness, than twice the size of the letters spelling the name of the registered designation of origin.

The size of the letters spelling the geographical name ‘Val de Loire’ and the name in current use ‘Malvoisie’ must not be larger, in height, width or thickness, than two-thirds of the size of the letters spelling the name of the registered designation of origin.

Legal framework:

National legislation

Type of further condition:

Additional provisions relating to labelling

Description of the condition:

The name of a smaller geographical unit may appear on the labels of wines covered by the registered designation of origin, provided that:

| — | it is a registered location; |
| --- | --- |

—

it is a registered location;

| — | it appears on the harvest declaration. |
| --- | --- |

—

it appears on the harvest declaration.

The name of the registered location must be printed in letters that are no larger, in height, width or thickness, than half the size of the letters spelling the designation of origin. It must appear in the same visual field as the registered designation of origin.

Link to the product specification

https://info.agriculture.gouv.fr/gedei/site/bo-agri/document_administratif-0569c539-0b4c-4402-9b68-c63cca20f36f

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(1)  OJ L 9, 11.1.2019, p. 2 .

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| 6.2.2020 | EN | Official Journal of the European Union | C 40/47 |
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6.2.2020

EN

Official Journal of the European Union

C 40/47

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Notice to undertakings intending to place hydrofluorocarbons in bulk on the market in the European Union in 2021

(2020/C 40/09)

1.

This Notice is addressed to any undertaking wishing to make a declaration to place hydrofluorocarbons in bulk on the market in the Union in 2021, in accordance with Articles 16(2) and 16(4) of Regulation (EU) No 517/2014 of the European Parliament and of the Council (1) (hereafter ‘the Regulation’).

2.

HFC-23, HFC-32, HFC-41, HFC-125, HFC-134, HFC-134a, HFC-143, HFC-143a, HFC-152, HFC-152a, HFC-161, HFC-227ea, HFC-236cb, HFC-236ea, HFC-236fa, HFC-245ca, HFC-245fa, HFC-365mfc, HFC-43-10mee.

3.

Any placing on the market of these substances, except for the uses listed in Article 15(2) points (a) to (f) of the Regulation or a total annual quantity of these substances of less than 100 tonnes of CO2 equivalent per year, is subject to quantitative limits under the quota system laid down in Articles 15 and 16 as well as Annexes V and VI to the Regulation.

4.

Importers must at the time of release for free circulation of HFCs have a valid registration as importers of bulk HFCs in the ‘F-Gas Portal and HFC Licensing System’ (2) in accordance with Commission Implementing Regulation (EU) 2019/661 (3). Such a registration is considered an obligatory licence for import. A similar licence is needed for exporting HFCs (4).

5.

Importers should be specified as ‘Consignee’ (box 8) on the Single Administrative Document (SAD). Importers are strongly encouraged to specify the amounts of HFCs in CO2 equivalents at the time of release for free circulation directly in the SAD (box 44) as this may greatly facilitate the custom clearance of their goods and establishment of their compliance with Regulation (EU) No 517/2014.

6.

According to Annex VI to the Regulation, the sum of the quotas allocated on the basis of reference values is subtracted from the maximum quantity available for 2021 to determine the quantity to be allocated from this reserve.

7.

All data submitted by companies, quotas and reference values are stored in the electronic ‘F-Gas Portal and HFC Licensing System’. All data in the F-Gas Portal and HFC Licensing System including quotas, reference values, commercial and personal data will be treated as confidential by the European Commission.

8.

Undertakings wishing to obtain quota from this reserve need to follow the procedure described in points 9 to 12 of this Notice.

9.

According to Articles 16(2) and 17(1) of the Regulation, the undertaking needs to have a valid registration profile, approved by the Commission in accordance with Implementing Regulation (EU) 2019/661, as a producer and/or importer of hydrofluorocarbons in the online ‘F-gas Portal and HFC Licensing System’. In order to ensure due treatment of the application for registration, including the possible need for additional information, such an application must be made at the very latest one month before the start of the declaration period, i.e. before 14 March 2020 (see point 10). For any applications received after this deadline it cannot be ensured that a final decision on the application for registration can be made before the end of the declaration period (see point 10). For companies that are not yet registered, guidance on how to register is available on the DG CLIMA website (5).

10.

The undertaking must make a declaration on anticipated quantities for 2021 in the ‘F-Gas Portal and HFC Licensing System’ in the declaration period from 14 April to 14 May 2020, 13.00 CET.

11.

Only duly completed declarations that are free of errors and received before 14 May 2020, 13.00 CET will be considered as valid by the Commission.

12.

Based on these declarations, the Commission will allocate quota to these undertakings in accordance with Article 16(2), 16(4) and 16(5) as well as Annexes V and VI to the Regulation.

13.

Article 7 of Implementing Regulation (EU) 2019/661 stipulates that for the purpose of the quota allocation for placing hydrofluorocarbons on the market pursuant to Article 16(5) of Regulation (EU) No 517/2014, all undertakings with the same beneficial owner(s) shall be considered as one single declarant in accordance with Article 16(2) and (4) of the Regulation.

14.

The Commission will inform the undertakings about the total allocated quota for 2021 via the ‘F-Gas Portal & HFC Licensing System’.

15.

The registration in the ‘F-Gas Portal & HFC Licensing System’ and/or a declaration on intention to place hydrofluorocarbons on the market in 2021 by itself does not give any right to place hydrofluorocarbons on the market in 2021.

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(1)  Regulation (EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse gases and repealing Regulation (EC) No 842/2006 (OJ L 150, 20.5.2014, p. 195).

1

(2)  The registry set up in accordance with Article 17 of Regulation (EU) No 517/2014: https://webgate.ec.europa.eu/ods2/resources/domain

2

(3)  Commission Implementing Regulation (EU) 2019/661 of 25 April 2019 ensuring the smooth functioning of the electronic registry for quotas for placing hydrofluorocarbons on the market (OJ L 112, 26.4.2019, p. 11)

3

(4)  See also Article 1.2 of Commission Implementing Regulation (EU) 2017/1375 (OJ L 194, 26.7.2017, p. 4).

4

(5)  https://ec.europa.eu/clima/sites/clima/files/f-gas/docs/guidance_document_en.pdf

5

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