1980L0723 — EN — 18.08.2000 — 002.001 — 1
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►B ►M3 COMMISSION DIRECTIVE
of 25 June 1980
on the transparency of financial relations between Member States and public undertakings as well
as on financial transparency within certain undertakings
(80/723/EEC) ◄
(OJ L 195, 29.7.1980, p. 35)
Amended by:
Official Journal
No page date
►M1Commission Directive 85/413/EEC of 24 July 1985 L 229 20 28.8.1985
►M2Commission Directive 93/84/EEC of 30 September 1993 L 254 16 12.10.1993
►M3Commission Directive 2000/52/EC of 26 July 2000 L 193 75 29.7.2000
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
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COMMISSION DIRECTIVE
of 25 June 1980
on the transparency of financial relations between Member States
and public undertakings as well as on financial transparency within
certain undertakings
(80/723/EEC)
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 90 (3) thereof,
Whereas publicundertakings play a substantial role in the national
economy of the Member States;
Whereas the Treaty in no way prejudices the rules governing the system
of property ownership in Member States and equal treatment of private
and publicundertakings must therefore be ensured;
Whereas the Treaty requires the Commission to ensure that Member
States do not grant undertakings, publicor private, aids inc ompatiblewith the common market;
Whereas, however, the complexity of the financial relations between
national publicauthorities and publicundertakings tends to hinder theperformance of this duty;
Whereas a fair and effective application of the aid rules in the Treaty to
both publicand private undertakings will be possible only if these
financial relations are made transparent;
Whereas such transparency applied to public undertakings should enable
a clear distinction to be made between the role of the State as public
authority and its role as proprietor;
Whereas Article 90 (1) confers certain obligations on the Member States
in respect of public undertakings; whereas Article 90 (3) requires theCommission to ensure that these obligations are respected, and providesit with the requisite means to this end; whereas this entails defining theconditions for achieving transparency;
Whereas it should be made clear what is to be understood by the terms
‘publicauthorities’ and ‘publicundertakings’;
Whereas public authorities may exercise a dominant influence on the
behaviour of publicundertakings not only where they are the proprietor
or have a majority participation but also by virtue of powers they hold inmanagement or supervisory bodies as a result either of the rulesgoverning the undertaking or of the manner in which the shareholdingsare distributed;
Whereas the provision of publicfunds to publicundertakings may take
place either directly or indirectly; whereas transparency must beachieved irrespective of the manner in which such provision of public
funds is made; whereas it may also be necessary to ensure that adequate
information is made available as regards the reasons for such provisionof publicfunds and their ac tual use;
Whereas Member States may through their publicundertakings seek
ends other than commercial ones; whereas in some cases publicundertakings are compensated by the State for financial burdensassumed by them as a result; whereas transparency should also be
ensured in the case of such compensation;
Whereas certain undertakings should be excluded from the application
of this Directive by virtue either of the nature of their activities or of thesize of their turnover; whereas this applies to certain activities whichstand outside the sphere of competition or which are already covered byspecific Community measures which ensure adequate transparency, topublic undertakings belonging to sectors of activity for which distinct1980L0723 — EN — 18.08.2000 — 002.001 — 2
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provision should be made, and to those whose business is not conducted
on such a scale as to justify the administration burden of ensuringtransparency;
Whereas this Directive is without prejudice to other provisions of the
Treaty, notably Articles 90 (2), 93 and 223;
Whereas, the undertakings in question being in competition with other
undertakings, information acquired should be covered by the obligationof professional secrecy;
Whereas this Directive must be applied in close cooperation with the
Member States, and where necessary be revised in the light of
experience,
HAS ADOPTED THIS DIRECTIVE:
Article 1
1. The Member States shall ensure that financial relations between
publicauthorities and publicundertakings are transparent as provided inthis Directive, so that the following emerge clearly:
(a) publicfunds made available direc tly by publicauthorities to the
public undertakings concerned;
(b) publicfunds made available by publicauthorities through the
intermediary of publicundertakings or financ ial institutions;
(c) the use to which these public funds are actually put.
2. Without prejudice to specific provisions laid down by the
Community the Member States shall ensure that the financial andorganisational structure of any undertaking required to maintain separate
accounts is correctly reflected in the separate accounts, so that the
following emerge clearly:
(a) the costs and revenues associated with different activities;
(b) full details of the methods by which costs and revenues are assigned
or allocated to different activities.
Article 2
1. For the purpose of this Directive:
(a) ‘publicauthorities’ means all publicauthorities, inc luding the State
and regional, local and all other territorial authorities;
(b) ‘publicundertakings’ means any undertaking over whic h the public
authorities may exercise directly or indirectly a dominant influence
by virtue of their ownership of it, their financial participation
therein, or the rules which govern it;
(c) ‘public undertakings operating in the manufacturing sector’ means
all undertakings whose principal area of activity, defined as being at
least 50 % of total annual turnover, is in manufacturing. These
undertakings are those whose operations fall to be included inSection D — Manufacturing (being subsection DA up to andincluding subsection DN) of the NACE (Rev.1) classification(
1);
(d) ‘undertaking required to maintain separate accounts’ means any
undertaking that enjoys a special or exclusive right granted by aMember State pursuant to Article 86(1) of the Treaty, or that isentrusted with the operation of a service of general economicinterest pursuant to Article 86(2) of the Treaty and receives State aid
in any form whatsoever, including any grant, support or compensa-
tion, in relation to such service and which carries on other activities;
(e) ‘different activities’ means, on the one hand, all products or services
in respect of which a special or exclusive right is granted to an1980L0723 — EN — 18.08.2000 — 002.001 — 3
(1) OJ L 83, 3.4.1993, p. 1.▼M3
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undertaking or all services of general economic interest with which
an undertaking is entrusted and, on the other hand, each otherseparate product or service in respect of which the undertaking is
active;
(f) ‘exclusive rights’ means rights that are granted by a Member State to
one undertaking through any legislative, regulatory or administrative
instrument, reserving it the right to provide a service or undertake anactivity within a given geographical area;
(g) ‘special rights’ means rights that are granted by a Member State to a
limited number of undertakings, through any legislative, regulatoryor administrative instrument, which, within a given geographicalarea:
— limits to two or more the number of such undertakings,
authorised to provide a service or undertake an activity,otherwise than according to objective, proportional and non-discriminatory criteria, or
— designates, otherwise than according to such criteria, several
competing undertakings, as being authorised to provide a service
or undertake an activity, or
— confers on any undertaking or undertakings, otherwise than
according to such criteria, any legal or regulatory advantageswhich substantially affect the ability of any other undertaking toprovide the same service or to operate the same activity in thesame geographical area under substantially equivalent condi-
tions.
2. A dominant influence on the part of the public authorities shall be
presumed when these authorities, directly or indirectly in relation to anundertaking:
(a) hold the major part of the undertaking's subscribed capital; or
(b) control the majority of the votes attaching to shares issued by the
undertakings; or
(c) can appoint more than half of the members of the undertaking's
administrative, managerial or supervisory body.
Article 3
The transparency referred to in ►
M3Article 1(1) ◄shall apply in
particular to the following aspects of financial relations between publicauthorities and publicundertakings:
(a) the setting-off of operating losses;
(b) the provision of capital;
(c) non-refundable grants, or loans on privileged terms;
(d) the granting of financial advantages by forgoing profits or the
recovery of sums due;
(e) the forgoing of a normal return on publicfunds used;
(f) compensation for financial burdens imposed by the public
authorities.
Article 3a
1. To ensure the transparency referred to in Article 1(2), the Member
States shall take the measures necessary to ensure that for anyundertaking required to maintain separate accounts:
(a) the internal accounts corresponding to different activities are
separate;
(b) all costs and revenues are correctly assigned or allocated on the basis
of consistently applied and objectively justifiable cost accounting
principles;
(c) the cost accounting principles according to which separate accounts
are maintained are clearly established.1980L0723 — EN — 18.08.2000 — 002.001 — 4
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2. Paragraph 1 shall only apply to activities which are not covered by
specific provisions laid down by the Community and shall not affect anyobligations of Member States or undertakings arising from the Treaty or
from such specific provisions.
Article 4
1. As far as the transparency referred to in Article 1(1) is concerned,
this Directive shall not apply to financial relations between the publicauthorities and
(a) public undertakings, as regards services the supply of which is not
liable to affect trade between Member States to an appreciableextent;
(b) central banks;
(c) public credit institutions, as regards deposits of public funds placed
with them by public authorities on normal commercial terms;
(d) publicundertakings whose total annual net turnover over the period
of the two financial years preceding that in which the funds referred
to in Article 1(1) are made available or used has been less than
EUR 40 million. However, for publicc redit institutions thecorresponding threshold shall be a balance sheet total of EUR 800million.
2. As far as the transparency referred to in Article 1(2) is concerned,
this Directive shall not apply
(a) to undertakings, as regards services the supply of which is not liable
to affect trade between Member States to an appreciable extent;
(b) to undertakings whose total annual net turnover over the period of
the two financial years preceding any given year in which it enjoys aspecial or exclusive right granted by a Member State pursuant toArticle 86(1) of the Treaty, or in which it is entrusted with theoperation of a service of general economic interest pursuant to
Article 86(2) of the Treaty is less than EUR 40 million; however, for
public credit institutions the corresponding threshold shall be abalance sheet total of EUR 800 million;
(c) to undertakings which have been entrusted with the operation of
services of general economic interest pursuant to Article 86(2) of theTreaty if the State aid in any form whatsoever, including any grant,
support or compensation they receive was fixed for an appropriate
period following an open, transparent and non-discriminatingprocedure.
Article 5
1. Member States shall ensure that information concerning the
financial relations referred to in Article 1(1) be kept at the disposal ofthe Commission for five years from the end of the financial year in
whic h the publicfunds were made available to the publicundertakings
concerned. However, where the same funds are used during a laterfinancial year, the five-year time limit shall run from the end of thatfinancial year.
2. Member States shall ensure that information concerning the
financial and organisational structure of undertakings referred to inArticle 1(2) be kept at the disposal of the Commission for five yearsfrom the end of the financial year to which the information refers.
3. Member States shall, where the Commission considers it necessary
so to request, supply to it the information referred to in paragraphs 1 and2, together with any necessary background information, notably theobjectives pursued.
Article 5a
1. Member States whose publicundertakings operate in the
manufacturing sector shall supply the financial information as set out1980L0723 — EN — 18.08.2000 — 002.001 — 5
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in paragraph 2 to the Commission on an annual basis within the
timetable contained in paragraph 4.
2. The financial information required for each public undertaking
operating in the manufacturing sector and in accordance with paragraph3 shall be as follows:
(i) the annual report and annual accounts, in accordance with the
definition of Council Directive 78/660/EEC(
1). The annual accounts
and annual report include the balance sheet and profit/loss account,explanatory notes, together with accounting policies, statements bydirectors, segmental and activity reports. Moreover, notices ofshareholders' meetings and any other pertinent information shall beprovided.
The following details, in so far as not disclosed in the annual report and
annual accounts of each public undertaking, shall also be provided:
(ii) the provision of any share capital or quasi-capital funds similar in
nature to equity, specifying the terms of its or their provision
(whether ordinary, preference, deferred or convertible shares andinterest rates; the dividend or conversion rights attaching thereto);
(iii) non-refundable grants, or grants which are only refundable in
certain circumstances;
(iv) the award to the enterprise of any loans, including overdrafts and
advances on capital injections, with a specification of interest ratesand the terms of the loan and its security, if any, given to the lenderby the enterprise receiving the loan;
(v) guarantees given to the enterprise by publicauthorities in respec t
of loan finance (specifying terms and any charges paid byenterprises for these guarantees);
(vi) dividends paid out and profits retained;
(vii) any other forms of State intervention, in particular, the forgiving of
sums due to the State by a publicundertaking, inc luding inter
aliathe repayment of loans, grants, payment of corporate or social
taxes or any similar charges.
3. The information required by paragraph 2 shall be provided for all
public undertakings whose turnover for the most recent financial year
was more than ►
M3EUR◄250 million.
The information required above shall be supplied separately for each
public undertaking including those located in the Member States, and
shall include, where appropriate, details of all intra and inter-group
transactions between different public undertakings, as well as transac-tions conducted directly between public undertakings and the State. Theshare capital referred to in paragraph 2 (ii) shall include share capitalcontributed by the State directly and any share capital received
contributed by a public holding company or other public undertaking
(including financial institutions), whether inside or outside the samegroup, to a given publicundertaking. The relationship between theprovider of the finance and the recipient shall always be specified.Similarly, the reports required in paragraph 2 shall be provided for eachindividual publicundertaking separately, as well as for the (sub-)holding
company which consolidates several public undertakings in so far as the
consolidated sales of the (sub)-holding company lead to its beingclassified as ‘manufacturing’.
Certain publicenterprises split their ac tivities into several legally
distinct undertakings. For such enterprises the Commission is willing toaccept one consolidated report. The consolidation should reflect theeconomic reality of a group of enterprises operating in the same orclosely related sectors. Consolidated reports from diverse, and purely
financial, holdings shall not be sufficient.
4. The information required under paragraph 2 shall be supplied to
the Commission on an annual basis. The information in respect of the1980L0723 — EN — 18.08.2000 — 002.001 — 6
(1) OJ No L 222, 14. 8. 1978, p. 11.
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financial year 1992 shall be forwarded to the Commission within two
months of publication of this Directive.
For 1993 and subsequent years, the information shall be provided within
15 working days of the date of publication of the annual report of the
public undertaking concerned. In any case, and specifically forundertakings which do not publish an annual report, the requiredinformation shall be submitted not later than nine months following theend of the undertaking's financial year.
In order to assess the number of companies covered by this reporting
system, Member States shall supply to the Commission a list of the
companies covered by this Article and their turnover, within two months
of publication of this Directive. The list is to be updated by 31 March ofeach year.
5. This Article is applicable to companies owned or controlled by the
Treuhandanstalt only from the expiry date of the special reportingsystem set up for Treuhandanstalt investments.
6. Member States will furnish the Commission with any additional
information that it deems necessary in order to complete a thorough
appraisal of the data submitted.
Article 6
1. The Commission shall not disclose such information supplied to it
pursuant to ►
M3Article 5(3) ◄as is of a kind covered by the
obligation of professional secrecy.
2. Paragraph 1 shall not prevent publication of general information or
surveys which do not contain information relating to particular publicundertakings to which this Directive applies.
Article 7
The Commission shall regularly inform the Member States of the results
of the operation of this Directive.
Article 8
Member States shall take the measures necessary to comply with the
Directive by 31 December 1981. They shall inform the Commission
thereof.
Article 9
This Directive is addressed to the Member States.1980L0723 — EN — 18.08.2000 — 002.001 — 7
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