Proposal for a Council Regulation (EC) on the application of Articles 92 and 93 of the EC Treaty to certain categories of horizontal State aid (97/C 262/04) (Text with EEA relevance) COM(97) 396 final - 97/0203(CNS)

(Submitted by the Commission on 22 July 1997)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 94 thereof,

Having regard to the proposal from the Commission,

Having consulted the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

(1) Whereas, pursuant to Article 94 of the Treaty, the Council may make any appropriate Regulations for the application of Articles 92 and 93 and may, in particular, determine the conditions in which Article 93 (3) shall apply and the categories of aid exempted from this procedure;

(2) Whereas, pursuant to the EC Treaty, the appreciation of compatibility of aid with the common market essentially rests with the Commission;

(3) Whereas the Commission has applied Articles 92 and 93 in numerous decisions and has also stated its policy in a number of communications; whereas, in the light of the Commission's considerable experience in applying Articles 92 and 93 and the general texts issued by the Commission in furtherance of those provisions, it is appropriate, with a view to ensuring an effective and efficient supervision and simplifying administration, that the Commission should be enabled to declare by means of Regulations in areas where the Commission has sufficient experience to define general compatibility criteria, that certain categories of aid are compatible with the common market pursuant to one or more of the provisions of Article 92 (2) and (3) of the Treaty and are exempted from the procedure provided for in Article 93 (3);

(4) Whereas group exemption. Regulations will increase transparency and legal certainty and can be directly applied by national courts, without prejudice to Articles 5 and 177 of the Treaty;

(5) Whereas it is appropriate that the Commission, when it adopts Regulations exempting categories of aid from the obligation to notify in Article 93 (3), specifies the purpose of the aid, the categories of beneficiaries and thresholds limiting the exempted aid to certain maximum aid intensities in relation to a set of eligible costs or maximum amounts of aid, in order to ensure the compatibility with the common market of aid covered by this Regulation;

(6) Whereas it is appropriate to enable the Commission, when it adopts Regulations exempting categories of aid from the obligation to notify in Article 93 (3), to attach further detailed conditions in order to ensure the compatibility with the common market of aid covered by this Regulation;

(7) Whereas it may be appropriate to set thresholds or other appropriate conditions requiring the notification of individual awards of aid in order to allow the Commission to examine individually the effect of certain aid on competition and trade between Member States and its compatibility with the common market;

(8) Whereas the Commission, having regard to the development and the functioning of the common market, should be enabled to establish by means of a Regulation that certain aid does not fulfil all the criteria of Article 92 (1) and is therefore exempted from the notification procedure in Article 93 (3), provided that aid granted to the same undertaking over a given period of time does not exceed a certain fixed amount;

(9) Whereas it is necessary to exclude most categories of aid contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance, since such aid, in so far as it is not subject to harmonization Directives or international agreements, is likely to affect trade between Member States and to distort or threaten to distort competition within the common market to an extent contrary to the common interest;

(10) Whereas in accordance with Article 93 (1) the Commission is under an obligation, in cooperation with Member States, to keep under constant review all systems of existing aid; whereas for this purpose and in order to ensure the largest possible degree of transparency and adequate control it is appropriate that the Commission ensures the establishment of a reliable system of recording and storing information about the application of the Commission Regulations to which all Member States have access and that it receives all necessary information from the Member States on the implementation of aid exempted from notification to fulfil this obligation, which may be debated and evaluated together with Member States in the Advisory Committee; whereas for this purpose it is also appropriate that the Commission may require such information to be supplied as is necessary to ensure the efficiency of such review;

(11) Whereas the control of the granting of aid involves factual, legal and economic issues of a very complex nature and great variety in a constantly evolving environment; whereas the Commission should therefore regularly review the categories of aid which should be exempted from notification; whereas the Commission should be able to repeal or amend Commission Regulations adopted pursuant to this Regulation where circumstances have changed with respect to any of the facts which were basic to their adoption or where the progressive development or the functioning of the common market so requires;

(12) Whereas the Commission, in close and constant liaison with the Member States, should be able to define precisely the scope of these Regulations and the conditions attached to them; whereas, in order to provide for cooperation between the Commission and the competent authorities of the Member States, it is appropriate to create an Advisory Committee on State aid to be consulted before the Commission adopts Regulations pursuant to this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Group exemptions

1. The Commission may, by means of Regulations adopted in accordance with the procedures laid down in Article 9 of this Regulation and in accordance with Article 92 of the Treaty, declare that the following categories of aid are compatible with the common market and not subject to the notification requirements of Article 93 (3):

(a) categories of aid in favour of:

(i) small and medium-sized enterprises;

(ii) research and development;

(iii) environmental protection;

(iv) employment and training;

(b) aid respecting the map approved by the Commission for each Member State to implement regional aid;

(c) export credit insurance covering non-marketable risk in so far as it is harmonized by EC law;

(d) export credits, including those for tied aid, in so far as they are subject to precise rules established in agreements to which the Community is a party.

2. The Commission Regulations referred to in paragraph 1 shall in particular specify for each category of aid:

(a) the purpose of the aid;

(b) the categories of beneficiaries;

(c) thresholds expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts;

(d) conditions of monitoring as specified in Article 4.

3. In addition, the Commission Regulations referred to in paragraph 1 may, in particular:

(a) set thresholds or other conditions for the notification of individual awards of aid;

(b) exclude certain sectors from the scope of application of such Regulation;

(c) attach conditions to the cumulation of aid;

(d) attach further conditions for the compatibility of aid exempted under such Regulation.

Article 2

De minimis

1. The Commission may, by means of a Regulation adopted in accordance with the procedures laid down in Article 9 of this Regulation, decide that, having regard to the development and the functioning of the common market, certain aid does not fulfil all the criteria of Article 92 (1) and is therefore exempted from the notification procedure in Article 93 (3), provided that aid granted to the same undertaking over a given period of time does not exceed a certain fixed amount.

2. Member States shall upon the request of the Commission supply at any time any additional information relating to aid exempted under paragraph 1.

Article 3

Export aid

Save for the export credit insurance and export credits referred to in Article 1 (1) (c) and (d), the exemptions foreseen by this Regulation shall not apply to aid contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance.

Article 4

Monitoring

1. When adopting Regulations in application of Article 1, the Commission shall impose detailed rules upon Member States regarding the monitoring of the aid exempted from notification according to those Regulations. The monitoring shall as a minimum consist of a requirement to Member States to:

(a) record and store on a running basis all relevant information regarding the application of the group exemptions;

(b) at least once every year supply the Commission with information regarding the application of the group exemption in a computerized form and in accordance with the Commission's specific requirements.

2. Member States shall on a running basis publish a summary of the information required under paragraph 1 (a) in their national Official Journal and shall upon request give any interested party access to relevant information regarding the application of the group exemptions.

3. The Commission shall make access to the information mentioned under paragraph 1 (b) available to all Member States.

4. Member States shall upon the request of the Commission supply at any time any additional information relating to aid exempted pursuant to Article 1.

5. Once a year, the Commission and the Member States shall debate and evaluate in the Advisory Committee the information mentioned under paragraph 1 (b).

Article 5

Period of validity and amendment of Regulations

1. Regulations adopted pursuant to Articles 1 and 2 shall apply for a specific period.

2. The may be repealed or amended where circumstances have changed with respect to any of the facts which were basic to their adoption or where the progressive development or the functioning of the common market so requires.

Article 6

Evaluation report

Not later than five years after the entry into force of this Regulation, the Commission shall submit a report on its functioning to the European Parliament and the Council.

Article 7

Hearing of interested parties

Where the Commission proposes to adopt a Regulation, it shall publish a draft thereof to enable all persons and organizations concerned to submit their comments within a reasonable time limit to be fixed by the Commission, but in no case less than one month.

Article 8

Advisory Committee

A committee of an advisory nature shall be constituted, hereafter the Advisory Committee, on State aid. It shall be composed of the representatives of the Member States and chaired by the representative of the Commission.

Article 9

Consultation of Advisory Committee

1. The Commission shall consult the Advisory Committee on State aid:

(a) before publishing a draft Regulation;

and

(b) before adopting a Regulation.

2. The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft, within a time limit which the chairman may lay down according to the urgency of the matter, if necessary by taking a vote.

3. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes.

4. The Commission shall take the the utmost account of the opinion delivered by the committee. It shall inform the committee on the manner in which its opinion has been taken into account.

Article 10

Final provisions

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

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