2002R2204 — EN — 02.01.2003 — 000.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COMMISSIONREGULATION(EC)No2204/2002
of►C1 5December 2002 ◄
ontheapplicationofArticles87and88oftheECTreatytoStateaidforemployment
(OJ L 337, 13.12.2002, p. 3)
Corrected by:
►C1Corrigendum, OJ L 349, 24.12.2002, p. 126 (2204/2002)
▼B
COMMISSIONREGULATION(EC)No2204/2002
of►C1 5December 2002 ◄
on the application of Articles 87 and 88 of the EC Treaty to State
aidforemployment
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 994/98 of 7 May 1998
on the application of Articles 92 and 93 of the Treaty establishing the
European Community to certain categories of horizontal State aid (1),
and in particular point (a)(iv) and point (b) of Article 1(1) thereof,
Having published a draft of this Regulation (2),
Having consulted the Advisory Committee on State Aid,
Whereas:
(1)Regulation (EC) No 994/98 empowers the Commission to
declare, in accordance with Article 87 of the Treaty, that undercertain conditions aid for employment is compatible with thecommon market and not subject to the notification requirementof Article 88(3) of the Treaty.
(2)Regulation (EC) No 994/98 also empowers the Commission todeclare, in accordance with Article 87 of the Treaty, that aid
that complies with the map approved by the Commission for
each Member State for the grant of regional aid is compatiblewith the common market and is not subject to the notificationrequirement of Article 88(3) of the Treaty.
(3)The Commission has applied Articles 87 and 88 of the Treaty toemployment aid in and outside assisted areas in numerous deci-
sions and has also stated its policy, in the guidelines on aid to
employment (
3), in the notice on monitoring of State aid and
reduction of labour costs (4), in the guidelines on national
regional aid (5) and in Commission Regulation (EC) No 70/2001
of 12 January 2001 on the application of Articles 87 and 88 of
the EC Treaty to State aid to small and medium-sized enter-
prises(6). In the light of the Commissions experience in
applying those provisions, it is appropriate, with a view toensuring efficient supervision and simplifying administrationwithout weakening Commission monitoring, that the Commis-sion should make use of the powers conferred by Regulation
(EC) No 994/98.
(4)This Regulation is without prejudice to the possibility for
Member States to notify aid for employment. Such notificationswill be assessed by the Commission in particular in the light ofthe criteria set out in this Regulation, in Regulation (EC) No 70/2001 or in accordance with any relevant Community guidelines
or frameworks. This is currently the case for the sector of mari-
time transport. The guidelines on State aid for employment (
7)
cease to apply from the date of entry into force of this Regula-tion, as do the notice on monitoring of State aid and reduction oflabour costs and the notice on an accelerated procedure forprocessing notifications of employment aid (
8). Notifications
pending at the entry into force of this Regulation will be
assessed in accordance with its provisions. It is appropriate tolay down transitional provisions concerning the application of2002R2204 — EN — 02.01.2003 — 000.001 — 2
(1) OJ L 142, 14.5.1998, p. 1.
(2) OJ C 88, 12.4.2002, p. 2.
(3) OJ C 334, 12.12.1995, p. 4.
(4) OJ C 1, 3.1.1997, p. 10.
(5) OJ C 74, 10.3.1998, p. 9.
(6) OJ L 10, 13.1.2001, p. 33.
(7) OJ C 371, 23.12.2000, p. 12.
(8) OJ C 218, 27.7.1996, p. 4.
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this Regulation to employment aid granted before its entry into
force and in breach of the obligation in Article 88(3) of theTreaty.
(5)The promotion of employment is a central aim for the economicand social policies of the Community and of its Member States.The Community has developed a European employment strategy
in order to promote this objective. Unemployment remains a
significant problem in some parts of the Community, and certaincategories of worker still find particular difficulty in entering thelabour market. For this reason there is a justification for publicauthorities to apply measures providing incentives to enterprises
to increase their levels of employment, in particular of workers
from these disadvantaged categories.
(6)This Regulation applies only to employment measures whichfulfil all the conditions of Article 87(1) of the Treaty and thus
constitute State aid. A number of employment policy measures
do not constitute State aid within the meaning of Article 87(1)because they constitute aid to individuals that does not favourcertain undertakings or the production of certain goods, orbecause they do not affect trade between Member States or
because they are general measures to promote employment
which do not distort or threaten to distort competition byfavouring certain undertakings or the production of certaingoods. Such general measures, which may include general reduc-tion of the taxation of labour and social costs, boostinginvestment in general education and training, measures to
provide guidance and counselling, general assistance and training
for the unemployed and improvements in labour law are there-fore unaffected by this Regulation. This is also the case ofmeasures which are deemed not to meet all the criteria of Article87(1) of the Treaty and therefore do not fall under the notifica-
tion requirement of Article 88(3) of the Treaty by virtue of
Commission Regulation (EC) No 69/2001 of 12 January 2001on the application of Articles 87 and 88 of the EC Treaty to de
minimisaid (
1).
(7)Having regard to those considerations, the purpose and effect of
the aid exempted by this Regulation should be to promoteemployment in accordance with the European employmentstrategy, in particular of workers from disadvantaged categories,without adversely affect trading conditions to an extent contrary
to the common interest. Employment aid granted to a firm on an
individual basis may have a major impact on competition in therelevant market because it favours that firm over others whichhave not received such aid. By being granted only to a singlefirm, such aid is likely to have only a limited effect on employ-ment. For this reason individual awards of employment aid
should continue to be notified to the Commission, and this Regu-
lation should exempt aid only if given in the form of schemes.
(8)This Regulation should exempt any aid granted under a scheme
that meets all the relevant requirements of this Regulation. With
a view to ensuring efficient supervision and simplifying adminis-tration without weakening Commission monitoring, aid schemesshould contain an express reference to this Regulation.
(9)This Regulation should not exempt from notification State aid inthe shipbuilding and coal-mining sectors, for which special rulesare laid down in, respectively, Council Regulation (EC) No1540/98(
2) and Council Regulation (EC) No 1407/2002 (3).
(10)This Regulation should apply in the transport sector. However,having regard to the particular characteristics of competition inthat sector, it is not appropriate to exempt aid for the creationof employment.2002R2204 — EN — 02.01.2003 — 000.001 — 3
(1) OJ L 10, 13.1.2001, p. 30.
(2) OJ L 202, 18.7.1998, p. 1.
(3) OJ L 205, 2.8.2002, p. 1.
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(11)The Commission has a consistently less favourable view of aid
targeted at particular sectors, including, but not limited to, sensi-
tive sectors experiencing overcapacity or crisis. Aid schemeswhich are targeted at specific sectors should not therefore becovered by the exemption from notification provided by thisRegulation.
(12)In accordance with the established practice of the Commission,and with a view to better ensuring that aid is proportionate andlimited to the amount necessary, thresholds should be expressed
in terms of aid intensities in relation to a set of eligible costs,
rather than in terms of maximum aid amounts.
(13)In order to determine whether or not aid is compatible with thecommon market pursuant to this Regulation, it is necessary totake into consideration the aid intensity and thus the aid amountexpressed as a grant equivalent. The calculation of the grantequivalent of aid payable in several instalments and aid in the
form of a soft loan requires the use of market interest rates
prevailing at the time of grant. With a view to a uniform, trans-parent, and simple application of the State aid rules, the marketrates for the purposes of this Regulation should be deemed to bethe reference rates, provided that, in the case of a soft loan, the
loan is backed by normal security and does not involve abnormal
risk. The reference rates should be those which are periodicallyfixed by the Commission on the basis of objective criteria andpublished in the Official Journal of the European Communities
and on the Internet.
(14)Having regard to the differences between enterprises of differentsizes, different ceilings of aid intensity for the creation ofemployment should be set for small and medium sized enter-
prises and large enterprises. In order to eliminate differences
that might give rise to distortions of competition, in order tofacilitate coordination between different Community andnational initiatives, and for reasons of administrative clarity andlegal certainty, the definition of ‘small and medium-sized enter-
prises’ (SMEs) used in this Regulation should be that laid down
in Commission Recommendation 96/280/EC of 3 April 1996concerning the definition of small and medium-sized enter-prises(
1). That definition was also used in Regulation (EC) No
70/2001.
(15)The ceilings of aid intensity should be fixed, in the light of theCommissions experience, at a level that strikes the appropriatebalance between minimising distortions of competition and the
objective of promoting employment. In the interests of coher-
ence, the ceilings should be harmonised with those fixed in theguidelines on national regional aid and in Regulation (EC) No70/2001, which allowed aid to be calculated by reference to thecreation of employment linked to investment projects.
(16)Employment costs form part of the normal operating costs ofany enterprise. It is therefore particularly important that aid
should have a positive effect on employment and should not
merely enable enterprises to reduce costs which they wouldotherwise bear.
(17)Without rigorous controls and strict limits, employment aid canhave harmful effects which cancel out its immediate effects onjob creation. If the aid is used to protect firms exposed to intra-Community competition, it could have the effect of delaying
adjustments needed to ensure the competitiveness of Community
industry. In the absence of rigorous controls, such aid may beconcentrated in the most prosperous regions, contrary to theobjective of economic and social cohesion. Within the singlemarket, aid granted to reduce costs of employment can lead todistortions of intra-Community competition and deflections in2002R2204 — EN — 02.01.2003 — 000.001 — 4
(1) OJ L 107, 30.4.1996, p. 4.
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the allocation of resources and mobile investment, to the shifting
of unemployment from one country to another, and to relocation.
(18)Aid to create jobs should be subject to the condition that thecreated job should be maintained for a certain minimum period.The period set in this regulation should override the five-year
rule set out in point 4.14 of the guidelines on national regional
aid.
(19)Aid to maintain jobs, meaning financial support given to a firm
to persuade it not to lay off its workers, is similar to operating
aid. Subject to any sectoral rules, therefore, such as those whichexist in the sector of maritime transport, it should be authorisedonly in specific circumstances and for a limited period. It shouldcontinue to be notified to the Commission and should not be
covered by the exemption from such notification provided by
this Regulation. The limited circumstances in which it can beauthorised include those where, in accordance with Article87(2)(b) of the Treaty, it is intended to make good the damagecaused by natural disasters or exceptional occurrences; anotherinstance is under the conditions applying to operating aid in the
guidelines on national regional aid, in regions eligible for the
derogation under Article 87(3)(a) of the Treaty concerning theeconomic development of areas where the standard of living isabnormally low or where there is serious underemployment,including ultra-peripheral regions; a third instance is where such
aid is granted in the context of the rescue and restructuring of a
company in difficulty, in accordance with the provisions of therelevant Community guidelines (
1).
(20)A particular type of aid is aid granted to employers for theconversion of temporary or fixed-term employment contractsinto contracts of indeterminate duration. Such measures shouldnot be covered by the exemption from such notification providedby this Regulation and should be notified so that the Commis-sion can determine whether they have positive employment
effects. It should in particular be ensured that such measures do
not allow the employment to be aided both at the creation of thepost and at the conversion of the contract, in such a way that theceiling for aid for initial investment or for creation of employ-ment is exceeded.
(21)Small and medium-sized enterprises play a decisive role in jobcreation. At the same time, their size may present a handicap tothe creation of new employment because of the risks and admin-
istrative burden involved in the recruitment of new personnel.
Similarly, job creation can contribute to the economic develop-ment of less favoured regions in the Community and thusimprove economic and social cohesion. Enterprises in thoseregions suffer from the structural disadvantage of the location.
It is therefore appropriate that small and medium-sized enter-
prises, and enterprises in assisted regions, should be able tobenefit from aid to create employment.
(22)Large firms in non-assisted areas do not suffer from particulardifficulties and employment costs are part of their normal oper-ating expenses. For this reason, and in order to maximise theincentive effect of aid to create jobs in SMEs and in regionseligible for the derogations under Article 87(3)(a) and (c) of theTreaty, large firms in regions not eligible for these derogations
should not be eligible for aid to create employment.
(23)Certain categories of worker experience particular difficulty infinding work, because employers consider them to be less
productive. This perceived lower productivity may be due eitherto lack of recent experience of employment (for example, youngworkers, long-term unemployed) or to permanent handicap.Employment aid intended to encourage firms to recruit suchindividuals is justified by the fact that the lower productivity of2002R2204 — EN — 02.01.2003 — 000.001 — 5
(1) OJ C 288, 9.10.1999, p. 2.
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these workers reduces the financial advantage accruing to the
firm and by the fact that the workers also benefit from themeasure and are likely to be excluded from the labour market
unless employers are offered such incentives. It is therefore
appropriate to allow schemes providing such aid, whatever thesize or location of the beneficiary.
(24)The categories of worker considered to be disadvantaged should
be defined, but it should be possible for Member States to notify
aid to promote the recruitment of other categories they considerto be disadvantaged, with supporting arguments.
(25)Workers with a disability may need permanent help to enable
them to remain in the labour market, going beyond aid for initial
recruitment and possibly including participation in shelteredemployment. Schemes providing aid for such purposes shouldbe exempted from notification provided that the aid can beshown to be no more than necessary to compensate for the lowerproductivity of the workers concerned, the ancillary costs of
employing them or the costs of establishing or maintaining shel-
tered employment. This condition is designed to prevententerprises benefiting from such aid from selling below competi-tive prices in markets also served by other enterprises.
(26)This Regulation should not prevent the cumulation of aid for therecruitment of disadvantaged workers or for the recruitment oremployment of disabled workers with other aid granted inrespect of employment costs, since in such cases it is legitimateto provide an incentive for workers from these categories to beemployed in preference to others.
(27)In order to ensure that the aid is necessary and acts as an incen-tive to employment, this Regulation should not exempt aid forthe creation of employment or for recruitment which the benefi-ciary would already undertake under market conditions alone.
(28)This Regulation should not exempt aid for the creation ofemployment where this is cumulated with other State aid,including aid granted by national, regional or local authorities,or with Community assistance, in relation to the same eligible
costs or to the costs of investments to which the employment
concerned is linked, when such cumulation exceeds the thresh-olds fixed in this Regulation or in the Community rules onState aid for investment, in particular the Guidelines on nationalregional aid and Regulation (EC) No 70/2001. The only excep-tions to this principle should be for aid for the recruitment of
disadvantaged workers or for the recruitment or employment of
disabled workers.
(29)It is appropriate that large amounts of aid should remain subjectto an individual assessment by the Commission before they are
put into effect. Accordingly, aid amounts exceeding a fixed
amount over a certain period to a single enterprise or establish-ment are excluded from the exemption provided for in thisRegulation and remain subject to the requirements of Article88(3) of the Treaty.
(30)Aid measures to promote employment or other aid with objec-tives connected with employment and labour markets may be ofa different nature from measures exempted by this Regulation.Such measures should be notified under Article 88(3).
(31)In the light of the World Trade Organisation (WTO) Agreementon Subsidies and Countervailing Measures, this Regulationshould not exempt export aid or aid favouring domestic overimported products. Such aid would be incompatible with theCommunity's international obligations under that Agreement
and should not therefore be exempted from notification, nor
authorised if so notified.
(32)In order to ensure transparency and effective monitoring, inaccordance with Article 3 of Regulation (EC) No 994/98, it isappropriate to establish a standard format in which Member2002R2204 — EN — 02.01.2003 — 000.001 — 6
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States should provide the Commission with summary informa-
tion whenever, in pursuance of this Regulation, an aid schemeis implemented, with a view to publication in the Official
Journal of the European Communities . For the same reasons, it
is appropriate to establish rules concerning the records thatMember States should keepregarding the aid scheme exemp tedby this Regulation. For the purposes of the annual report to besubmitted to the Commission by Member States, it is appropriate
for the Commission to establish its specific requirements. In
order to facilitate administrative treatment and in view of thewide availability of the necessary technology, the summaryinformation and the annual report should be provided in compu-terised form.
(33)Having regard to the Commissions experience in this area, andin particular the frequency with which it is generally necessary
to revise State aid policy, it is appropriate to limit the period of
application of this Regulation. Pursuant to Article 4(2) of Regu-lation (EC) No 994/98, it is necessary to include transitionalarrangements whereby aid schemes already exempted by thisRegulation will, on its expiry, continue to be exempted foranother six months,
HAS ADOPTED THIS REGULATION
Article 1
Scope
1. This Regulation shall apply to schemes which constitute State aid
within the meaning of Article 87(1) of the Treaty and which provideaid for the creation of employment, provide aid for the recruitment of
disadvantaged and disabled workers or provide aid to cover the addi-
tional costs of employing disabled workers.
2. This Regulation shall apply to aid in all sectors, including the
activities relating to the production, processing and marketing of
products listed in Annex I to the Treaty.
It shall not apply to any aid granted in the coal or shipbuilding sectors,
nor to any aid for the creation of employment, within the meaning ofArticle 4, granted in the transport sector. Such aid shall remain subjectto prior notification to the Commission in accordance with Article
88(3) of the Treaty.
3. This Regulation shall not apply:
(a) to aid to export-related activities, namely aid directly linked to the
quantities exported, to the establishment and operation of a distri-
bution network or to other current expenditure linked to the exportactivity;
(b) to aid contingent upon the use of domestic in preference to
imported goods.
Article 2
Definitions
For the purpose of this Regulation:
(a) ‘aid’ means any measure fulfilling all the criteria laid down in
Article 87(1) of the Treaty;
(b) ‘small and medium-sized enterprises’ means enterprises as defined
in Annex I to Regulation (EC) No 70/2001;
(c) ‘gross aid intensity’ means the aid amount expressed as a percen-
tage of the relevant costs. All figures used shall be taken beforeany deduction for direct taxation. Where aid is awarded in a formother than a grant, the aid amount shall be the grant equivalent ofthe aid. Aid payable in several instalments shall be discounted toits value at the moment of granting. The interest rate to be used2002R2204 — EN — 02.01.2003 — 000.001 — 7
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for discounting purposes and for calculating the aid amount in a
soft loan shall be the reference rate applicable at the time of grant;
(d) ‘net aid intensity’ means the discounted aid amount net of tax
expressed as a percentage of the relevant costs;
(e) ‘number of employees’ means the number of annual working units
(AWU), namely the number of persons employed full time in one
year, part-time and seasonal work being AWU fractions;
(f) ‘disadvantaged worker’ means any person who belongs to a cate-
gory which has difficulty entering the labour market without
assistance, namely a person meeting at least one of the following
criteria:
(i) any person who is under 25 or is within two years after
completing full-time education and who has not previously
obtained his or her first regular paid employment;
(ii) any migrant worker who moves or has moved within the
Community or becomes resident in the Community to takeupwork;
(iii) any person who is a member of an ethnic minority within a
Member State and who requires development of his or herlinguistic, vocational training or work experience profile toenhance prospects of gaining access to stable employment;
(iv) any person who wishes to enter or to re-enter working life
and who has been absent both from work and from educationfor at least two years, and particularly any person who gave
upwork on account of the difficulty of reconciling his or her
working life and family life;
(v) any person living as a single adult looking after a child or
children;
(vi) any person who has not attained an upper secondary educa-
tional qualification or its equivalent, who does not have ajob or who is losing his or her job;
(vii) any person older than 50, who does not have a job or who is
losing his or her job;
(viii) any long-term unemployed person, i.e. any person who has
been unemployed for 12 of the previous 16 months, or sixof the previous eight months in the case of persons under 25;
(ix) any person recognised to be or to have been an addict in
accordance with national law;
(x) any person who has not obtained his or her first regular paid
employment since beginning a period of imprisonment or
other penal measure;
(xi) any woman in a NUTS II geographical area where average
unemployment has exceeded 100 % of the Community
average for at least two calendar years and where femaleunemployment has exceeded 150 % of the male unemploy-ment rate in the area concerned for at least two of the pastthree calendar years;
(g) ‘disabled worker’ means any person either:
(i) recognised as disabled under national law; or
(ii) having a recognised, serious, physical, mental or psychological
impairment;
(h) ‘sheltered employment’ means employment in an establishment
where at least 50 % of the employees are disabled workers whoare unable to take upwork in the op en labour market;
(i) ‘wage cost’ comprises the following components actually payable
by the beneficiary of the State aid in respect of the employmentconcerned:
(i) the gross wage, i.e. before tax; and
(ii) the compulsory social security contributions.
(j) a job is ‘linked to the carrying-out of a project of investment’ if it
concerns the activity to which the investment relates and if it iscreated within three years of the investment's completion. Duringthis period, the jobs created following an increase in the utilisation2002R2204 — EN — 02.01.2003 — 000.001 — 8
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rate of the capacity created by the investment are also linked to the
investment;
(k) ‘investment in tangible assets’ means an investment in fixed
physical assets relating to the creation of a new establishment, theextension of an existing establishment, or the engagement in anactivity involving a fundamental change in the product or produc-
tion process of an existing establishment (in particular through
rationalisation, diversification or modernisation). An investment infixed assets undertaken in the form of the takeover of an establish-ment which has closed or which would have closed had it not beenpurchased shall also be regarded as tangible investment;
(l) ‘investment in intangible assets’ means investment in transfer of
technology by the acquisition of patent rights, licences, know-howor unpatented technical knowledge.
Article 3
Conditionsforexemption
1. Subject to Article 9, aid schemes fulfilling all the conditions of
this Regulation shall be compatible with the common market within
the meaning of Article 87(3) of the Treaty and shall be exempt from
the notification requirement of Article 88(3) of the Treaty providedthat:
(a) any aid that could be awarded under such scheme fulfils all the
conditions of this Regulation;
(b) the scheme contains an express reference to this Regulation, by
citing its title and publication reference in the Official Journal of
the European Communities .
2. Aid granted under the schemes referred to in paragraph 1 shall be
compatible with the common market within the meaning of Article87(3) of the Treaty and shall be exempt from the notification require-
ment of Article 88(3) provided that the aid granted fulfils all the
conditions of this Regulation.
Article 4
Creationofemployment
1. Aid schemes for the creation of employment and any aid that
could be awarded under such scheme shall fulfil the conditions of para-graphs 2, 3 and 4.
2. Where the employment is created in areas or in sectors which do
not qualify for regional aid pursuant to Article 87(3)(a) and (c) at the
moment the aid is granted, the gross aid intensity shall not exceed:
(a) 15 % in the case of small enterprises;
(b) 7,5 % in the case of medium-sized enterprises.
3. Where the employment is created in areas and in sectors which
qualify for regional aid pursuant to Article 87(3)(a) and (c) at the
moment at which the aid is awarded, the net aid intensity shall notexceed the corresponding ceiling of regional investment aid determinedin the map applying at the time the aid is granted, as approved by theCommission for each Member State: for this purpose, regard shall behad,inter alia , to the multisectoral framework for regional aid for large
investment projects (
1).
In the case of small and medium-sized enterprises, and unless the map
provides otherwise for such enterprises, this ceiling shall be increasedby:
(a) 10 percentage points gross in areas covered by Article 87(3)(c),
provided that the total net aid intensity does not exceed 30 %; or2002R2204 — EN — 02.01.2003 — 000.001 — 9
(1) OJ C 70, 19.3.2002, p. 8.
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(b) 15 percentage points gross in areas covered by Article 87(3)(a),
provided that the total net aid intensity does not exceed 75 %.
The higher regional aid ceilings shall only apply if the beneficiary's
contribution to financing is at least 25 % and if the employment is
maintained within the qualifying region.
When employment is created in the production, processing and
marketing of products listed in Annex I to the Treaty, in areas which
qualify as less favoured areas under Council Regulation (EC) No1257/1999 (
1), these higher aid ceilings or, if applicable, the higher aid
ceilings of that Regulation, shall apply.
4. The ceilings fixed in paragraphs 2 and 3 shall apply to the inten-
sity of the aid calculated as a percentage of the wage costs over aperiod of two years relating to the employment created under thefollowing conditions:
(a) the employment created must represent a net increase in the
number of employees, both in the establishment and in the enter-
prise concerned, compared with the average over the past 12
months;
(b) the employment created shall be maintained for a minimum period
of three years, or two years in the case of SMEs; and
(c) the new workers employed as a result of the creation of employ-
ment must have never had a job or have lost or be losing their
previous job.
5. Where aid is granted for the creation of employment under a
scheme exempted under this Article, additional aid may be granted incase of recruitment of a disadvantaged or disabled worker in accor-dance with the terms of Articles 5 or 6.
Article 5
Recruitmentofdisadvantagedanddisabledworkers
1. Aid schemes for the recruitment by any enterprise of disadvan-
taged and disabled workers and any aid that could be awarded undersuch scheme shall fulfil the conditions of paragraphs 2 and 3.
2. The gross intensity of all aid relating to the employment of the
disadvantaged or disabled worker or workers concerned, calculated asa percentage of the wage costs over a period of one year followingrecruitment, shall not exceed 50 % for disadvantaged workers or 60 %for disabled workers.
3. The following conditions shall apply:
(a) where the recruitment does not represent a net increase in the
number of employees in the establishment concerned, the post or
posts must have fallen vacant following voluntary departure, retire-
ment on grounds of age, voluntary reduction of working time orlawful dismissal for misconduct and not as a result of redundancy,and
(b) except in the case of lawful dismissal for misconduct the worker or
workers must be entitled to continuous employment for a minimum
of 12 months.
Article 6
Additionalcostsofemploymentofdisabledworkers
1. Aid schemes for the employment of disabled workers and any aid
that could be awarded under such a scheme shall fulfil the conditionsof paragraphs 2 and 3.
2. The aid, together with any aid provided under Article 5, shall not
exceed the level needed to compensate for any reduced productivity2002R2204 — EN — 02.01.2003 — 000.001 — 10
(1) OJ L 160, 26.6.1999, p. 80.
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resulting from the disabilities of the worker or workers, and for any of
the following costs:
(a) costs of adapting premises;
(b) costs of employing staff for time spent solely on the assistance of
the disabled worker or workers;
(c) costs of adapting or acquiring equipment for their use,
which are additional to those which the beneficiary would have
incurred if employing workers who are not disabled, over any periodfor which the disabled worker or workers are actually employed.
Where the beneficiary provides sheltered employment, aid may in addi-
tion cover, but shall not exceed, the costs of constructing, installing or
expanding the establishment concerned, and any costs of administrationand transport which result from the employment of disabled workers.
3. Schemes exempted by this Article shall provide that aid be
subject to the condition that the beneficiary maintain records allowingverification that the aid granted to it meets the provisions of thisArticle and Article 8(4).
Article 7
Necessityfortheaid
1. This Regulation shall only exempt aid under Article 4 if before
the employment concerned is created:
(a) either an application for aid has been submitted to the Member
State by the beneficiary; or
(b) the Member State has adopted legal provisions establishing a legal
right to aid according to objective criteria and without further exer-cise of discretion by the Member State.
2. Aid shall enjoy exemption under Article 4 in cases where:
(a) the employment created is linked to the carrying-out of a project of
investment in tangible or intangible assets; and
(b) the employment is created within three years of the investment's
completion,
only if the application referred in paragraph 1(a), or the adoption
referred to in paragraph 1(b), takes place before work on the projectis started.
Article 8
Cumulation
1. The aid ceilings fixed in Articles 4, 5 and 6 shall apply regardless
of whether the support for the aided employment or recruitment isfinanced entirely from State resources or is partly financed by theCommunity.
2. Aid under schemes exempted by Article 4 of this Regulation shall
not be cumulated with any other State aid within the meaning of
Article 87(1) of the Treaty, or with other Community funding, in rela-
tion to the same wage costs, if such cumulation would result in an aidintensity exceeding that fixed by this Regulation.
3. Aid under schemes exempted by Article 4 of this Regulation shall
not be cumulated:
(a) with any other State aid within the meaning of Article 87(1) of the
Treaty, or with other Community funding, in relation to costs ofany investment to which the created employment is linked and
which has not yet been completed at the time the employment is
created, or which was completed in the three years before theemployment is created; or
(b) with any such aid or funding in relation to the same wage costs or
to other employment linked to the same investment,2002R2204 — EN — 02.01.2003 — 000.001 — 11
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if such cumulation would result in an aid intensity exceeding the rele-
vant ceiling of regional investment aid determined in the guidelines onnational regional aid and in the map approved by the Commission for
each Member State or the ceiling in Regulation (EC) No 70/2001.
Where the relevant ceiling has been adapted in a particular case, inparticular by the application of State aid rules applying in a particularsector, or by an instrument applying to large investment projects, suchas the applicable multisectoral framework for regional aid for large
investment projects, the adapted ceiling shall apply for the purposes
of this paragraph.
4. By way of derogation from paragraphs 2 and 3, aid under
schemes exempted by Articles 5 and 6 of this Regulation may becumulated with other State aid within the meaning of Article 87(1) ofthe Treaty, or with other Community funding, in relation to the same
costs, including with aid under schemes exempted by Article 4 of this
Regulation which complies with paragraphs 2 and 3, provided that suchcumulation does not result in a gross aid intensity exceeding 100 % ofthe wage costs over any period for which the worker or workers areemployed.
The first subparagraph shall be without prejudice to any lower limits on
aid intensity that may have been set pursuant to the Community frame-
work for State aid for research and development (
1).
Article 9
AidsubjecttopriornotificationtotheCommission
1. Aid schemes which are targeted at particular sectors shall not be
exempted from notification under this Regulation and shall remainsubject to the notification requirement of Article 88(3) of the Treaty.
2. This Regulation shall not exempt from notification the grant of
aid to a single enterprise or establishment exceeding a gross aid
amount of EUR 15 million over any three-year period. The Commis-
sion shall assess such aid, if granted under a scheme which isotherwise exempted by this Regulation, by reference solely to thecriteria of this Regulation.
3. This Regulation is without prejudice to any obligation on a
Member State to notify individual grants of aid under obligations
entered into in the context of other State aid Instruments, and in parti-
cular the obligation to notify, or to inform the Commission of, aid to anenterprise receiving restructuring aid within the meaning of theCommunity guidelines on State aid for rescuing and restructuring firmsin difficulty and the obligation to notify regional aid for large invest-ment projects under the applicable multisectoral Framework.
4. Aid schemes to promote the recruitment of categories of worker
who are not disadvantaged within the meaning of Article 2(f) shall
remain subject to the notification requirement of Article 88(3) of theTreaty unless exempted under Article 4. On notification, MemberStates shall submit, for appraisal by the Commission, argumentsshowing that the workers concerned are disadvantaged. In this respect,
Article 5 shall apply.
5. Aid to maintain jobs, namely financial support given to an under-
taking to retain workers who would otherwise be laid off, shall remainsubject to the notification requirement of Article 88(3) of the Treaty.Subject to any sectoral rules, such aid may be authorised by theCommission only where, in accordance with Article 87(2)(b) of the
Treaty, it is intended to make good the damage caused by natural
disasters or exceptional occurrences or, under the conditions applyingto operating aid in the guidelines on national regional aid, in regionseligible for the derogation under Article 87(3)(a) concerning theeconomic development of areas where the standard of living is abnor-mally low or where there is serious underemployment.2002R2204 — EN — 02.01.2003 — 000.001 — 12
(1) OJ C 45, 17.2.1996, p. 5.
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6. Aid for the conversion of temporary or fixed-term employment
contracts into contracts of indeterminate duration shall remain subjectto the notification requirement of Article 88(3) of the Treaty.
7. Aid schemes for job-sharing, for provision of support for working
parents and similar employment measures which promote employmentbut which do not result in a net increase in employment, in the recruit-ment of disadvantaged workers, or in the recruitment or employment of
disabled workers shall remain subject to the notification requirement of
Article 88(3) of the Treaty and shall be assessed by the Commission inaccordance with Article 87.
8. Other aid measures with objectives connected with employment
and labour markets, such as measures to encourage early retirement,
shall also remain subject to the notification requirement of Article
88(3) of the Treaty and shall be assessed by the Commission in accor-dance with Article 87.
9. Individual cases of employment aid granted independently of any
scheme shall remain subject to the notification requirement of Article
88(3) of the Treaty. Such aid will be assessed in the light of this Regu-
lation and may be authorised by the Commission only if it iscompatible with any specific applicable rules which may have beenlaid down in respect of the sector in which the beneficiary operatesand only if it can be shown that the effects of the aid on employment
outweigh the impact on competition in the relevant market.
Article 10
Transparencyandmonitoring
1. On implementation of an aid scheme exempted by this Regula-
tion, Member States shall, within 20 working days, forward to the
Commission, with a view to its publication in the Official Journal of
the European Communities , a summary of the information regarding
such aid scheme in the form laid down in Annex I. This shall beprovided in computerised form.
2. Member States shall maintain detailed records regarding the aid
schemes exempted by this Regulation and the individual aid grantedunder those schemes. Such records shall contain all information neces-sary to establish that the conditions for exemption, as laid down in thisRegulation, are fulfilled, including information on the status of any
company whose entitlement to aid depends on its status as an SME.
Member States shall keepa record regarding an aid scheme for 10years from the date on which the last individual aid was granted undersuch scheme. On written request, the Member State concerned shallprovide the Commission, within a period of 20 working days or suchlonger period as may be fixed in the request, with all the information
which the Commission considers necessary to assess whether the
conditions of this Regulation have been complied with.
3. Member States shall compile a report on the application of this
Regulation in respect of each whole or part calendar year during whichthis Regulation applies, in the form laid down in Annex II, in compu-
terised form. Member States shall provide the Commission with such
report no later than three months after the expiry of the period to whichthe report relates.
Article 11
Entryintoforce, periodofvalidity, andtransitionalarrangements
1. This Regulation shall enter into force on the 20th day following
its publication in the Official Journal of the European Communities .
It shall remain in force until 31 December 2006.
2. Notifications pending at the time of entry into force of this Regu-
lation shall be assessed in accordance with its provisions.
Aid schemes implemented before the date of entry into force of this
Regulation, and aid granted under these schemes, in the absence of a2002R2204 — EN — 02.01.2003 — 000.001 — 13
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Commission authorisation and in breach of the obligation in Article
88(3) of the Treaty, shall be compatible with the common marketwithin the meaning of Article 87(3) of the Treaty and shall be
exempted under this Regulation if they fulfil the conditions laid down
in Article 3(1)(a) and Article 3(2). Any aid which does not fulfil theseconditions shall be assessed by the Commission in accordance with therelevant frameworks, guidelines, communications and notices.
3. At the end of the period of validity of this Regulation, aid
schemes exempted under this Regulation shall remain exempted during
an adjustment period of six months.
This Regulation shall be binding in its entirety and directly applicable
in all Member States.2002R2204 — EN — 02.01.2003 — 000.001 — 14
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ANNEX I
Information communicated by Member States regarding State aid granted
under Regulation (EC) No 2204/2002 of 12 December 2002 on the applica-
tionofArticles87and88oftheECTreaty toStateaidforemployment
(to be provided in computerised form, by electronic mail, to stateaidgref-
fe@cec.eu.int)
AidNo:
Explanatory remark: This number will be filled in by DG COMP.Member State:
Region:
Explanatory remark: Indicate the name of the region if the aid is granted by a
sub-central authority.
Titleofaidscheme:
Explanatory remark: Indicate the name of the aid scheme.Legalbasis:Explanatory remark: Indicate the precise national legal reference for the aid and
a publication reference.
Annualexpenditureplannedunderthescheme:Explanatory remarks: Amounts are to be given in euro or, if applicable, national
currency. Indicate the annual overall amount of the budget appropriation(s) or
the estimated tax loss per year for all aid instruments contained in the scheme.
For guarantees, indicate the (maximum) amount of loans guaranteed.
Maximumaidintensityunder:
— Article 4: creation of employment:
— Article 5: recruitment of disadvantaged and disabled workers:
— Article 6: additional costs of employment of disabled workers:
Explanatory remark: Indicate the maximum aid intensity distinguishing between
aid under Articles 4, 5 and 6 of the Regulation.
Dateofimplementation:Explanatory remark: Indicate the date from which aid may be granted under the
scheme.
Durationofscheme:Explanatory remark: Indicate the date (year and month) until which aid may be
granted under the scheme.
Objective ofaid:
— Article 4: creation of employment:
— Article 5: recruitment of disadvantaged and disabled workers:
— Article 6: employment of disabled workers:
Explanatory remark: The primary objective(s) of the measure should be identi-
fied from among the three options. This field also gives the opportunity to
indicate further (secondary) objectives pursued.
Economicsector(s)concerned:
— all Community sectors(
1)
— all manufacturing (1)
— all services (1)
— other (please specify)
Explanatory remarks: Choose from the list, where relevant. Aid schemes which
are targeted at specific sectors are not covered by the exemption from notifica-
tion provided by this Regulation.2002R2204 — EN — 02.01.2003 — 000.001 — 15
(1) With the exception of the shipbuilding sector, and other sectors which are the subjects
of special rules in regulations and directives governing all State aid within the sector.
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Nameandaddressofthegrantingauthority:
Explanatory remark: Please include the telephone No and where possible the
address for electronic mail.
Otherinformation:
Explanatory remarks: If the scheme is co-financed by Community funds, please
add the following sentence:
‘The aid scheme is co-financed under [reference].’
If the scheme's duration extends beyond the date of validity of this Regulation,
please add the following sentence:
‘The exemption regulation expires on 31 December 2006 followed by a transi-
tional period of six months.’2002R2204 — EN — 02.01.2003 — 000.001 — 16
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ANNEX II
Formoftheperiodic reporttobeprovidedtotheCommission
Annual reporting format on aid schemes exempted under a group exemp-
tionregulationadoptedpursuanttoArticle1ofRegulation(EC)No994/98
Member States are required to use the format below for their reporting obliga-
tions to the Commission under group exemption regulations adopted on the
basis of Regulation (EC) No 994/98.
The reports should be provided in computerised form to:
stateaidgreffe@cec.eu.int
Informationrequired forall aidschemesexempted undergroupexemption
regulationsadoptedpursuanttoArticle 1ofRegulation(EC)No994/98
1. Title and No of aid scheme
2. Commission exemption regulation applicable
3. Expenditure
Separate figures have to be provided for each aid instrument within a
scheme (e.g. grant, soft loans, etc.). The figures have to be expressed in
euro or, if applicable, national currency. In the case of tax expenditure,
annual tax losses have to be reported. If precise figures are not available,
such losses may be estimated.
These expenditure figures should be provided on the following basis:
For the year under review indicate separately for each aid instrument within
the scheme (e.g. grant, soft loan, guarantee, etc.):
3.1. Amounts committed, (estimated) tax losses or other revenue forgone, data
on guarantees, etc. for new decisions to grant aid. In the case of guarantee
schemes, the total amount of new guarantees handed out should be
provided.
3.2. Actual payments, (estimated) tax losses or other revenue forgone, data on
guarantees, etc. for new and current grants of aid. In the case of guarantee
schemes, the following should be provided: total amount of outstanding
guarantees, premium income, recoveries, indemnities paid out, operating
result of the scheme under the year under review.
3.3. Number of new decisions to grant aid.3.4. Estimated overall number of jobs created or disadvantaged or disabled
workers recruited or employed under new decisions to grant aid (as appro-
priate). Aid for the recruitment of disadvantaged workers should be broken
down by the categories in Article 2(f).
3.5.3.6. Regional breakdown of amounts under point 3.1 either by regions defined
at NUTS(
1) level II or below or by Article 87(3)(a) regions, Article
87(3)(c) regions and non-assisted regions.
3.7. Sectoral breakdown of amounts under point 3.1 by beneficiaries' sectors of
activity (If more than one sector is covered, indicate the amount for each):
— coalmining
— manufacturing of which:
— steel
— shipbuilding
— synthetic fibres
— motor vehicles— other manufacturing2002R2204 — EN — 02.01.2003 — 000.001 — 17
(1) NUTS is the nomenclature of territorial units for statistical purposes in the European
Community.
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— services of which:
— transport services
— financial services— other services
— other sectors (please specify)
4. Other information and remarks2002R2204 — EN — 02.01.2003 — 000.001 — 18