Draft Commission Regulation on the application of Articles 87 and 88 of the EC Treaty to de minimis aid

(2000/C 89/06)

Invitation to submit comments on the draft Commission Regulation on the application of Articles 87 and 88 of the EC Treaty to de minimis aid.

Interested parties may submit their comments within one month of the date of publication of this draft Regulation to: European Commission Directorate-General for Competition

Directorate G

Rue de la Loi/Wetstraat 200 B - 1049 Brussels Fax (32-2) 296 98 13.

Draft Commission Regulation on the application of Articles 87 and 88 of the EC Treaty to de minimis aid

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 Article 2 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 set out in a regulation a threshold under which aid measures are deemed not to meet all the criteria of Article 87(1) of the Treaty and therefore do not fall under the notification procedure provided for in Article 88(3) of the Treaty.

(2) The Commission has applied Articles 87 and 88 of the Treaty and in particular clarified, in numerous decisions, the notion of aid within the meaning of Article 87(1) of the Treaty. The Commission has also stated its policy with regard to a de minimis ceiling, under which Article 87(1) can be considered not to apply, most recently in the notice on the de minimis rule for State aid(3). In the light of this experience and with a view to increasing transparency and legal certainty, it is appropriate that the de minimis rule be laid down in a regulation.

(3) In view of the special rules which apply in the sectors of agriculutre, fisheries and transport, and of the risk that even small amounts of aid could fulfil the criteria of Article 87(1) of the Treaty in those sectors, it is appropriate that this Regulation should not apply to those sectors.

(4) In the light of the Commission's experience, it can be established that aid not exeeding a ceiling of EUR 100000 over a period of three years does not affect trade between Member States and/or does not distort or threaten to distort competition and therefore does not fall under Article 87(1) of the Treaty: this is without prejudice to the possibility that enterprises will receive other aid authorised by the Commission.

(5) Export aid has always been prohibited wihin the Community and is also subject to rules established in international agreements to which the European Community is a party, and in particular the WTO Agreement on Subsidies and Countervailing Measures. Consequently, in accordance with the Commission's practice on de minimis aid, export aid should be excluded from the scope of this Regulation.

(6) For the purpose of transparency, equal treatment and the correct application of the de minimis ceiling, it is appropriate that Member States should apply the same method of calculation. In order to facilitate this calculation and in accordance with the present practive of application of the de minimis rule, it is appropriate that aid amounts not taking the form of a cash grant should be converted into their gross grant equivalent. Calculation of the grant equivalent of aid payable in several instalaments, and calculation of aid in the form of a soft loan, require the use of market interest rates prevailing at the time of grant. With a view to a uniform, transparent and simple application of the State aid rules, the market rates for the purposes of this Regulation should be deemed to be the 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 periodically fixed by the Commission on the basis of objective criteria and published in the Official Journal of the European Communities and on the Internet.

(7) The Commission has a duty to ensure that State aid rules are respected and in particular that aid granted under the de minimis rule adheres to the conditions thereof. In accordance with the cooperation principle laid down in Article 10 of the Treaty, Member States should facilitate the achievement of this task by establishing the necessary machinery in order ot ensure that the total amount of aid, granted to the same beneficiary under the de minimis rule, does not exceed the ceiling of EUR 100000 over a period of three years. To that end, it is appropriate that Member States inform the enterprise concerned of the de minimis character of an aid and obtain a written statement from the enterprise concerned, confirming that the de minimis ceiling hs not been exceeded.

(8) In accordance with Article 2(2) of Regulation (EC) No 994/98, the Commission should require Member States to provide at any time such information as is necessary to verify compliance with this Regulation.

(9) Having regard to the Commission's experience and in 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 to five years. Should this Regulation expire without being extended, the aid schemes already covered by this Regulation may remain in force for six months, in accordance with Article 4 of Regulation (EC) No 994/98,

HAS ADOPTED THIS REGULATION:

Article 1

Scope

This Regulation applies to aid granted to enterprises in all sectors, with the exception of:

(a) the transport sector and the activities linked to the production, processing or marketing of products listed in Annex I to the Treaty;

(b) aid to export-related activities, namely aid directly linked to the quantities exported, to the establishmet and operation of a distribution network or to other current expenditure linked to the export activity.

Article 2

De minimis aid

1. Aid measures shall be deemed not to meet all the criteria of Article 87(1) of the Treaty and shall therefore not fall under the notification requirement of Article 88(3) of the Treaty, if they fulfil the conditions laid down in paragraphs 2 and 3.

2. The total de minimis aid granted to any one enterprise shall not exceed EUR 100000 over any period of three years. This ceiling shall apply irrespective of the from of the aid or the objective pursued.

3. The ceiling in paragraph 2 shall be expressed as a cash grant. All figures used shall be before any deduction for direct taxation. Where aid is awarded in a form other than a grant, the aid amount is the grant equivalent of the aid.

Aid payable in several instalments shall be discounted to its value at the moment of tis being granted. The interest rate to be used for discounting purpose and to calculate the aid amount in a soft loan shall be the reference rate applicable at the time of grant.

Article 3

Cumulation and monitoring

1. Where a Member State grants de minimis aid to an enterprise, it shall inform the enterprise about the de minimis character of the aid and obtain a written statement from the enterprise that the new aid does not raise the total amount of de minimis aid received to a level above the ceiling set out in Article 2(2). In order to facilitate the task of enterprises in making such statements, Member States shall, during the first three years of the application of this Regulation, give them all necessary information about aid which they have granted to them under the de minimis rule before the entry into force of this Regulation and which sould be taken into account for the calculation of the ceiling.

2. Member States shall record and compile all the information regarding the application of this Regulation. Such records shall contain all information necessary to demonstrate that the conditions of this Regulation have been respected. Records regarding an individual aid shall be maintained for 10 years from the date on which it was granted and regarding an aid scheme, for 10 years from the date on which the last individual aid was granted under such scheme. On written request the Member State concerned shall provide the Commission, within a period of 20 working days, or such longer period as may be fixed in the request, with all the information that the Commission considers necessary for assessing whether the conditions of this Regulation have been complied with, in particular the total amount of de minimis aid received by any enterprise.

Article 4

Entry into force and period of validity

1. This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities.

It shall remain in force for five years.

2. At the end of the period of validity of this Regulation, aid schemes falling under this Regulation shall continue to benefit from it during an adjustment period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, ...

For the Commission

...

Member of the Commission

(1) OJ L 142, 14.5.1998, p. 1.

(2) OJ C 89, 28.3.2000, p. 6.

(3) OJ C 68, 6.3.1996, p. 9.