Community guidelines for State aid for advertising of products listed in Annex I to the EC Treaty and of certain non-Annex I products

(2001/C 252/03)

1. Introduction

1. In practically all the Member States the authorities help to finance the promotion and advertising of products listed in Annex I to the Treaty and of certain non-Annex I products, either through direct financial contributions from their budgets or using government resources including parafiscal charges or compulsory contributions. Providing certain conditions are met, the Commission takes a favourable view of such activities, since they facilitate the development of economic activities in the agricultural sector and the achievement of the objectives of the common agricultural policy.

2. Nevertheless, public intervention of this kind in the free play of the market may, by favouring certain firms or certain products, distort competition and affect trade between Member States. The Commission therefore takes the view that such aid should have a framework which is as clear and specific as possible. To this end, the Commission issued in 1986 a communication concerning State involvement in the promotion of agriculture and fisheries products(1), and in 1987 a framework for national aid for the advertising of agricultural products and certain products not listed in Annex I to the EC Treaty, excluding fisheries products(2) (hereinafter referred to as "the advertising framework"). Taking into account the increasing consumer interest in product information and taking into account the experience acquired since 1987 and the developments in Community law, the Commission considers that it is now necessary to clarify certain aspects of the guidance given in respect of State aid for advertising.

3. The Member States were consulted on these changes at meetings of the working group "Conditions of competition in agriculture" on 13 April 1999, 26 and 27 October 1999 and 27 April 2001.

2. Scope

4. The advertising framework apples to advertising, defined as any operation using the media (such as press, radio, TV or posters) which is designed to induce consumers to buy the relevant product. It excludes from its scope promotion operations in the broader sense, such as the dissemination to the general public of scientific knowledge, the organisation of trade fairs or exhibitions, participation in these and similar public relations exercises, including surveys and market research.

5. The experience acquired since 1987 has shown that it is necessary to extend the definition of the concept of advertising in the two following respects:

(a) In practice, advertising using the media is frequently combined with other activities which do not use the media, for example, at the point of sale, which is intended to reinforce the message conveyed via the media. Similarly, large-scale activities undertaken at the point of sale to the consumer may have similar effects on competition to advertising using the media.

(b) In addition to advertising which is addressed to the consumer, it is also necessary to take account of advertising which is addressed to economic operators, for example food processors, wholesale or retail distributors, restaurants, hotels and other catering establishments.

6. In the light of the considerations in point 5, the Commission will for the purpose of these guidelines apply the definition of advertising referred to in point 7.

7. "Advertising" is defined as any operation which is designed to induce economic operators or consumers to buy the relevant product. It includes all material which is distributed direct to consumers for the same purpose, including advertising activities aimed at consumers at the point of sale.

8. On the other hand, promotion operations as defined as the dissemination to the general public of scientific knowledge, the organisation of trade fairs or exhibitions, participation in these and similar public relations exercises, including surveys and market research, are not considered as advertising. State aid for such promotion in the broader sense is subject to points 13 and 14 of the Community guidelines for State aid in the agriculture sector(3) or, as far as fishery products are concerned, point 2.1.4 of the guidelines for the examination of State aid to fisheries and acquaculture(4).

9. These guidelines concern the advertising of the products listed in Annex I to the Treaty as well as the advertising of non-Annex I products, which consist preponderantly of products listed in Annex I (in particular milk products, cereals, sugar and ethyl alcohol) in a processed form (e.g. fruit yoghurt, milk-powder preparations with cocoa, butter/vegetable fat mixtures, pastry products, confectionery, and spirituous beverages) within the Community. These guidelines also concern the advertising for fisheries products within the Community. These products will be hereinafter referred to as "agricultural and other products". However, these guidelines are without prejudice to the application of the provisions set out in Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements regarding Community structural assistance in the fisheries sector(5) and in the guidelines for the examination of State aid to fisheries and aquaculture. They shall apply without prejudice to the State aid rules applicable to non-Annex I products.

3. General principles for the assessment of State aid for the advertising of agricultural and other products

10. The general prohibition on State aid contained in Article 87(1) of the Treaty is only applicable if the publicly funded advertising distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods. Where such publicly funded advertising activities refer to the national or regional origin of the products concerned, the advertising clearly favours certain products and therefore Article 87(1) may apply.

11. However, the prohibition on State aid in Article 87(1) of the Treaty is not absolute. Aid for the advertising of agricultural and other products may be intended to make good the damage caused by natural disasters or exceptional occurrences and therefore fall within the scope of the derogation provided for by Article 87(2)(b) of the Treaty. However, usually State aid for the advertising of agricultural and other products will be intended to facilitate the development of certain economic activities or of certain economic areas within the meaning of Article 87(3)(c) of the Treaty. In view of their beneficial effects, these aid measures may be authorised provided that they do not adversely affect trading conditions to an extent contrary to the common interest.

12. Normally, producers and traders would be expected to bear the costs of advertising themselves, as part of their normal economic activities. Therefore, if aid granted for the advertising of agricultural and other products are not to be regarded as operating aid but compatible with the common market under Article 87(3)(c) of the Treaty, they should not interfere with trade to an extent contrary to the common interest (negative criteria), and should facilitate the development of certain economic activities or of certain economic areas (positive criteria).

13. State aid must comply with the Community's international obligations, which in the case of agriculture are specified in the Agreement on Agriculture (WTO-GATT 1994)(6).

14. Having regard to Article 152 of the Treaty on public health and Article 153 on consumer protection, the Commission suggests that advertising for particular agricultural and other products may, where appropriate, contain a reference of a general nature pointing to the importance of a varied and balanced diet.

15. Since aid which is considered incompatible with the common interest in accordance with the negative criteria described in point 3.1 can never be authorised, it is appropriate to assess each case of aid in the light of these negative criteria first.

3.1. Negative criteria

16. By definition, State aid for the advertising of agricultural and other products may distort or threaten to distort competition within the common market, within the meaning of Article 87(1) of the Treaty, in that it favours the producers of the products covered by the advertising activities concerned. In accordance with Article 87(3)(c) of the Treaty such aid may be considered compatible with the common market in so far as they do not adversely affect trading interests to an extent which is contrary to the common interest, due account being taken of the objectives of the common agricultural policy as referred to in Article 39 of the Treaty.

17. Moreover, the discretion conferred on the Commission by Article 88 of the Treaty does not permit the Commission to authorise Member States to derogate from provisions of Community law (Treaty articles and secondary Community legislation) other than those relating to the application of Article 87(l) of the Treaty(7).

3.1.1. Aid for campaigns contrary to Article 28 of the Treaty

18. National aid for an advertising campaign which infringes Article 28 of the Treaty prohibiting quantitative restrictions on imports and all measures having equivalent effect between Member States cannot in any circumstances be considered compatible with the common market within the meaning of Article 87(3)(c) of the Treaty. The Commission will therefore seek assurances from the Member State concerned that the principles as described in point 19 and as derived from the jurisprudence of the Court of Justice of the European Communities will be respected. In case of doubt, the Commission will request samples or mock-ups of the advertising material concerned before approving the aid scheme. Furthermore, the Commission will require the Member State concerned to submit an annual report containing information about the activities undertaken during the previous year (see point 6.2).

19. The following are forms of advertising which are clearly not open to objection under Article 28 of the Treaty:

(a) advertising campaigns organised directly or indirectly by one Member State on the market of another Member State;

(b) advertising campaigns organised on the home market of a Member State which advertise the product in a purely generic manner making no reference whatsoever to its national origin;

(c) campaigns on the home market promoting specific qualities or varieties of products even though they are typical of national production; these are campaigns which make no specific references to the national origin of the product other than which may be evident from the references made to the qualities or varieties concerned or to the normal designation of the product.

20. The following are forms of advertising which clearly infringe Article 28 of the Treaty:

(a) advertising which advises consumers to buy national products solely because of their national origin;

(b) campaigns intended to discourage the purchase of products from other Member States or which disparage those products in the eyes of consumers (negative advertising); positive statements about a Member State's home product should not be phrased in such a way as to imply that other Member State's products are necessarily inferior.

21. Some advertising on a Member State's home market may, because of the references made to the national origin of the products, and unless certain restraints are observed, be open to objection under Article 28 of the Treaty.

22. Advertising drawing attention to the varieties or qualities of products produced within a Member State frequently draws attention to the national origin of the products, even though those products and their qualities are similar to those of products produced elsewhere. If undue emphasis is placed on the national origin of the product in such advertising there is a danger of breach of Article 28 of the Treaty. The Commission therefore requests Member States to ensure particularly that point 23 is strictly respected.

23. Identification of the producing country by word or by symbol may be made providing that a reasonable balance is struck between references to, on the one hand, qualities and varieties of the product and, on the other hand, its national origin. The references to national origin should be subsidiary to the main message put over to consumers by the campaign and should not consitute the principal reason why consumers are being advised to buy the product.

24. Certain advertising mentioning the national origin of agricultural and other products may, even though they respect the criteria referred to in points 22 and 23, nevertheless infringe Article 28 of the Treaty if they reflect a considered intention of a Member State to substitute domestic products for products imported from other Member States(8).

3.1.2. Aid for campaigns which contravene secondary Community legislation

25. National aid for an advertising campaign which by virtue of its content infringes provisions laid down by Community secondary legislation cannot be considered as compatible with the common market within the meaning of Article 87(3)(c) of the Treaty. Therefore the Commission could not authorise aid for advertising which would infringe provisions laid down by specific Community legislation, for example the specific labelling rules which have been laid down for the wine, dairy products, egg and poultry sectors.

26.

"Publicly funded advertising campaigns must also comply with the general rules applying to all advertising activities conducted within the Community. The Commission will therefore seek assurances that any publicly funded campaign for the advertising of foodstuffs respects the provisions of Article 2 of Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to labelling, presentation and advertising of foodstuffs(9), which provides that the labelling and methods used, including promotion and advertising of foodstuffs, must not be such as could mislead the purchaser to a material degree, particularly:

(a) as to the characteristics of the foodstuff and, in particular, as to its nature, identity, properties, composition, quantity, durability, origin or provenance, method of manufacture or production;

(b) by attributing to the foodstuff effects or properties which it does not possess;

(c) by suggesting that the foodstuff possesses special characteristics when in fact all similar foodstuffs possess such characteristics".

27. Furthermore, in accordance with Article 2 of Directive 2000/13/EC, subject to the rules applicable to foodstuffs for particular nutritional uses, promotion or advertising may not attribute to any foodstuff the property of preventing, treating or curing a human disease, or refer to such properties.

28. In addition, the Commission will verify that publicly subsidised advertising campaigns undertaken in the Member States are compatible with co-financed campaigns which are being undertaken at Community level.

3.1.3. Aid for advertising related to particular firms

29. The common interest can in no circumstances be advanced as a justification for aid for advertising relating directly to the products of one or more particular firm or firms. Such aid presents an immediate risk of a distortion of the conditions of competition in favour of the firms receiving the aid, and provide no lasting benefits for the development of the sector as a whole. They must therefore be considered to be nothing more than operating aid, and as such incompatible with the common market.

30. Where the conduct of publicly financed advertising activities is entrusted to private firms, in order to exclude the possibility of aid to the firms carrying out the campaigns, the Commission will in all cases seek assurances that the choice of the private firm concerned has been made on market principles, in a non-discriminative way, where necessary using tendering procedures which are in accordance with Community law, and in particular with case-law(10) using a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of procurement procedures to be reviewed.

3.2. Positive criteria

31. The absence of any factor contrary to the public interest is not of itself sufficient for the Commission to consider aid for the advertising of agricultural and other products as compatible with the common market. In order to qualify for the derogation under Article 87(3)(c) of the Treaty, such aid must also facilitate the development of certain economic activities or of certain economic areas.

32. This positive condition is considered to be met provided that the subsidised advertising concerns any of the following:

- surplus agricultural products or underexploited species,

- new products or replacement products not yet in surplus,

- high-quality products, including products produced or obtained using environmentally friendly production or catchment methods, such as products from organic farming,

- development of certain regions,

- development of small and medium sized undertakings (SMEs) as defined by 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 enterprises(11),

- projects that are implemented by organisations officially recognised within the meaning of Council Regulation (EC) No 104/2000 of 17 December 1999 on the common organisation of the markets in fishery and aquaculture products(12),

- projects that are jointly implemented by producer organisations or other organisations of the fishery sector recognised by national authorities.

33. The notification from the Member State should clearly state, by referring to one of the items mentioned in point 32, why a particular aid scheme, or aid for a specific campaign may be considered in the common interest within the meaning of Article 87(3)(c) of the Treaty, having regard to the specific guidance given in section 4.

4. Application of section 3 to particular types of advertising activities

34. Experience has shown that the application of the negative and positive criteria has created particular difficulties in two areas, namely as regards advertising of (regional) origin, and advertising of quality products. Therefore, the Commission's approach in these two areas is explained in detail in this section.

4.1. Advertising of products of a particular Member State or region where origin is (part of) the message

Advertising where origin is the primary message

35. Article 28 of the Treaty states that quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States. Advertising of home-grown products by a Member State which is aimed at domestic consumption is considered as such an equivalent measure as the measure may lead, or is intended to lead, to favour the consumption of home-grown products in place of the consumption of imported products.

36. However, advertising campaigns that are undertaken with a view to introducing consumers to the agricultural and other products of a particular Member State or region do not necessarily have to have such an effect. Sometimes such campaigns concern a single category of products, such as wine, cheese or beer. Sometimes they may concern a wide range of agricultural and other products produced in the Member State or region concerned, for example through the organisation of "food weeks" in which consumers in one Member State are encouraged to try products from another Member State. In addition to advertising, such campaigns may include other measures, for example the organisation of free tasting sessions for consumers or professionals working in the food and catering sectors.

37. The Commission considers that one of the major benefits of the realisation of the internal market in the agricultural and foodstuffs sector has been to provide consumers with access to the very wide range of products produced in the Member States in accordance with different practices and traditions. Advertising campaigns which encourage consumers to try these different products benefit the internal market and contribute to the development of the agricultural sector. Therefore, despite the fact that the primary focus of such campaigns is inevitably on the national or regional origin of the products concerned, the Commission takes a favourable view of them provided that certain conditions are met.

38. The objective of such campaigns should be to introduce consumers to products with which they are not familiar. Therefore, as a general rule, the campaign should be undertaken outside the Member State or region in which the agricultural and other products are produced. Unless appropriate explanations can be provided to suggest the contrary, publicly subsidised campaigns focused on the origin of the products and aimed at consumers residing in the Member State or region of production, who may be presumed to be familiar with the products concerned, would appear to be intended to reinforce possible existing preferences to buy local products, and would therefore be contrary to the common interest. This would not, however, be the case for advertising campaigns which are aimed at visitors to the Member State or region, and which encourage them to try local products, and possibly encourage them to visit local production facilities.

39. It is acceptable for such campaigns to include information about the objective characteristics of the products concerned, such as the ingredients used, the taste and texture of the product, or the method of production, e.g. animal welfare standards or biological production. However, they should not, subject to the guidance given in point 4.2, include subjective claims about the quality of the products. In essence, the focus of such a campaign should be limited to encouraging consumers or the trade to try the product, and leaving it to them to form a judgment as to its quality.

Advertising where origin is the secondary message

40. In line with point 3.1.1, advertising which mentions the (regional) origin of the product as a subsidiary message would not infringe Article 28 of the Treaty.

41. To assess whether the origin is indeed a subsidiary message, the Commission will take into account the overall importance of text and/or symbol, including pictures and general presentation, referring to origin and the importance of text and/or symbol referring to the unique selling point of the advertisement, i.e. the part of the advertising message which does not focus on origin.

Advertising concerning traceability systems

42. Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Council Regulation (EC) No 820/97(13) has improved the transparency of the conditions for the production and marketing of beef and beef products. Through that regulation Community legislation has made traceability of origin obligatory for some products. Member States may want to finance advertising campaigns explaining the mechanisms of such a system to the general public.

43. A general advertising campaign explaining the fact that traceability has become obligatory and/or explaining how such a system is managed would not emphasise a particular origin. Therefore, such a campaign (if it is State aid at all) would comply with Article 28 of the Treaty.

44. However, claims that products of a certain origin are special because of the existence of a traceability system, when in fact they simply meet the relevant legislative requirements applicable to the marketing of all similar products concerned, may mislead the consumer, because they suggest that the product possesses special characteristics when in fact all similar products possess the same characteristics (see Article 2(1)(a)(iii) of Directive 2000/13/EC). In this case, the payment of aid for such campaigns cannot be considered to be in the common interest. However, information stemming from a traceability system may be integrated into a campaign in line with the principles on advertising where origin is the secondary message referred to in point 23.

4.2. Advertising of products meeting particular quality requirements

4.2.1. General considerations

45. The majority of Member States have introduced quality control schemes specifically for agricultural and other products. If the products concerned meet the quality requirements laid down, they are often entitled to be marked with a special label, the advertising of which is subsidised.

46. The Commission considers that in the medium and long term, consumers appreciate products of a consistently high quality. The advertising of quality control schemes which aim to achieve consistently high quality standards is likely to promote consumer confidence in Community agricultural production, improve farm incomes and thus promote the development of the sector as a whole. Therefore, provided that the genuine purpose of such a strategy is to achieve a high standard of quality, and not to stress the national, regional or local origin of the products, the Commission takes a favourable view of such aid.

47. One condition for the public funding of advertising of high-quality agricultural and other products is that the products concerned should meet standards or specifications which are clearly higher or more specific than those which are laid down in the relevant Community or national legislation. As in the case of advertising for traceability systems, claims that products are of high quality when in fact they simply meet the relevant legislative requirements applicable to the marketing of all similar products concerned may mislead the consumer, because they suggest that the product possesses special characteristics when in fact all similar products possess the same characteristics (see point 3.1.2). In this case, the payment of aid for such campaigns cannot be considered to be in the common interest. Member States have to indicate how the constant control of the compliance with the specific quality criteria is being maintained.

48. The situation is different, however, in the case of products which can be clearly distinguished from other products falling within the same category by specific characteristics concerning the raw materials used, the composition of the finished products or the production and processing methods used. This is the case, for example, for products covered by Council Regulation (EEC) No 2082/92 of 14 July 1992 on certificates of specific character for agricultural products and foodstuffs(14), and for products covered by Council Regulation (EEC) No 2092/91 of 24 June 1991 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs(15). The situation is similar where Community legislation has laid down different levels of quality standards for a category of products. Since these products clearly have specific characteristics which are not shared by other similar products, the advertising of those characteristics will not mislead the consumer, and is likely to contribute to the development of the sector.

49. National quality control schemes should be dependent solely on the existence of intrinsic objective characteristics which give the products the quality required or which concern the production process required, and not dependent on the origin of the products or the place of production. Irrespective of whether the quality control schemes are compulsory or voluntary, access to such schemes must therefore be granted to all products produced in the Community, irrespective of their origin, provided that they meet the conditions laid down. Furthermore, in the operation of such schemes, Member States are required to recognise the results of comparable controls which have been carried out in other Member States.

50. Where the scheme is restricted to products of a particular origin (and notwithstanding point 4.1), the scheme itself is contrary to the Treaty, and it is self-evident that the Commission cannot consider aid for the advertising of such a scheme to be compatible with the common market. In order to ensure that the necessary information is provided to the consumer, it is acceptable, and even desirable, for the labels and logos to contain information about the name and location of the quality control organism which is responsible for certification and/or control in accordance with the scheme.

51. On condition that a voluntary quality control scheme is open to all interested parties and without prejudice to other provisions of Community law, aid may be granted for a scheme which imposes a reference to the respective origin of the product. However, this reference has to be secondary to the main message of the scheme, in accordance with point 3.1.1.

4.2.2. Aids for the advertising of products bearing a protected designation of origin or a protected geographical indication registered by the Community

52. Where an agricultural or other product or a foodstuff possesses particular characteristics which are due to its geographical origin, it is possible for the producers of the product or foodstuff to apply, through the competent authorities of the Member State concerned, for registration at Community level of a protected designation of origin (PDO) or a protected geographical indication (PGI) in accordance with the provisions of Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs(16) The granting of registration means that the Community has recognised the existence of very close links between the specific qualities of the product concerned and its geographical origin. In such cases, therefore, the common interest does not oppose the granting of aid for advertising and advertising which includes a reference to the origin of the product concerned, provided that the references to origin correspond exactly to those references which have been registered by the Community. Similar considerations apply to other designations of origin which are protected under Community legislation such as wines produced in specified regions in accordance with Articles 54-58 of Council Regulation (EC) No 1493/1999 of 17 May on the common organisation of the market in wine(17).

53. In order to ensure that aid are not being given to individual producers, the Commission will verify that all producers of the product covered by the PDO, PGI or, for products outside of the scope of Regulation (EEC) No 2081/92, the other protected designation of origin are able to benefit from the aid in the same manner. This means that the advertising measures should relate to the PDO or PGI itself and not to any label or logo unless all producers of the PDO or PGI are entitled to use the label or logo in question. Similarly, where for practical reasons, aid is paid to a consortium of producers, the Commission will seek assurances that the aid will in fact benefit all producers, whether or not they are members of the consortium.

54. As an alternative to the advertising of individual PDOs or PGIs, a Member State may wish to finance a campaign for all PDOs or PGIs covering a particular type of product, or produced in a particular region. In such cases, the Commission will apply the guidance given in points 4.1 and 4.2 by analogy. In particular, the Commission will verify that excessive emphasis is not being placed on the national or regional origin of the PDOs or PGIs, that there is no express or implied claim that the PDOs or PGIs covered by the campaign are inherently superior to PDOs or PGIs from other Member States and that there is no disparagement of products from other Member States.

4.2.3. Aid for the advertising of products of organic farming

55. Aid will only be authorised when the products that bear indications referring to organic farming methods satisfy the requirements of Regulation (EEC) No 2092/91. All the producers and processors of products of organic farming should be subject to the system of controls laid down in the Regulation. These controls are to be carried out by the control authorities authorised by the Member State.

56. Where aid is granted to producers' organisations, the Commission will seek assurances that all producers are able to benefit from the aid in the same manner, whether or not they are members of the organisation in question.

57. The Commission will apply the principles set out in this point by analogy to aid for the advertising of products produced by other environmentally friendly production schemes, such as integrated production methods.

5. Maximum level of State aid for the advertising of agricultural and other products

58. National aid for the advertising of agricultural and other products, even where they do not adversely affect trading conditions to an extent contrary to the common interest, and even where they may facilitate the development of certain economic activities or certain regions may interfere with normal trade flows between Member States for a given agricultural or other product.

59. It is therefore in the public interest that additional guarantees should be sought to prevent trading conditions being influenced in favour of Member States expending substantial sums on advertising their own national products to the detriment of those Member States which, for budgetary or other reasons, have to or want to limit their expenditure on such advertising.

60. The Community's attitude towards such national aid should therefore take account of the sums which the sector itself spends on the measures concerned. It should therefore be stipulated that, as a general rule, direct aid, from a general purpose government budget, must not exceed the amount which the sector itself has committed to a given advertising campaign. Thus, in the case of aid for advertising, the rate of direct aid should not exceed 50 % and undertakings from the sector will have to contribute at least 50 % of the cost, either through voluntary contributions or through the collection of parafiscal levies or compulsory contributions. To take account of the weight of some of the positive criteria mentioned in point 3.2, the Commission may authorise the raising of the abovementioned maximum rate of direct aid up to 75 % of the costs in the case of advertising for products produced by SMEs in areas eligible for support under Article 87(3)(a) of the Treaty.

61. As far as advertising for fishery products is concerned, the scales and rates of assistance as contained in Annex III and IV of Regulation (EC) No 2792/1999 apply.

6. Notification and reports

62. In order that the Commission can ensure that the criteria contained in these guidelines are satisfied, specific procedures are laid down for notifying the aid in question under Article 88(3) of the Treaty, and for the provision of annual reports.

6.1. Notification

63. Any aid scheme which a Member State plans to introduce and any changes to an existing scheme must be notified to the Commission in accordance with Article 88(3) of the Treaty. The information requested in Annex I should be provided. Individual advertising activities which are conducted outside of the scope of approved schemes should also be notified to the Commission. The information requested in Annex II should be provided.

64. In view of the effects which large-scale advertising may have on competition within the Community, it appears necessary to introduce a requirement for the prior notification to the Commission of certain types of new advertising activities, including those which are covered by an existing aid scheme. This individual notification requirement refers to advertising activities with a common theme which have an annual budget in excess of EUR 5 million in the Member State concerned and which involve either the advertising of new quality control schemes or marks or which refer to the national or regional origin of products.

65. In so far as existing aid within the meaning of Article 1(b), of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty(18) is concerned, this specific notification requirement should be considered as a proposal for appropriate measures within the meaning of Article 88(1) of the Treaty (see point 7.2).

6.2. Annual reports

66. In accordance with Article 21(1) of Regulation (EC) No 659/1999, Member States are required to submit to the Commission annual reports on all existing aid schemes. Each Member State must therefore forward to the Commission, for the first time before 30 June 2003, and thereafter no later than 30 June each following year an annual report on all aid for the advertising of agricultural and other products granted during the course of the previous calendar year.

67. The report should be presented in accordance with the guidance set out in point 23.2 of the Community guidelines for State aid in the agricultural sector or in point 3.3 of the guidelines for the examination of State aid to fisheries and aquaculture respectively.

68. The report should include or be accompanied by representative samples of advertising materials used, including video or audio copies where appropriate.

7. Entry into force Application and proposals for appropriate measures

7.1. Application

69. The Commission will apply these guidelines to new State aid, including pending notifications from Member States, with effect from 1 January 2002.

70. Unlawful aid within the meaning of Article 1(f) of Regulation (EC) No 659/1999 will be assessed in accordance with the rules and guidelines applicable at the time when the aid is granted.

7.2. Proposals for appropriate measures

71. In accordance with Article 88(1) of the Treaty, the Commission proposes to Member States to amend their existing aid schemes relating to aid for advertising and promotion to conform to these guidelines by 31 December 2001 at the latest.

72. Member States are invited to confirm that they accept these proposals for appropriate measures in writing by 1 October 2001 at the latest.

73. In the event that a Member State fails to confirm its acceptance in writing before that date, the Commission will assume that the Member State concerned has accepted these proposals, unless it explicitly indicates its disagreement in writing.

74. Should a Member State not accept the whole or part of these proposals by that date, the Commission will proceed in accordance with Article 19(2) of Regulation (EC) No 659/1999.

7.3. Replacement of existing texts

75. The following texts are hereby replaced by these guidelines and appropriate measures:

- Commission communication concerning State involvement in the promotion of agriculture and fisheries products,

- framework for national aid for advertising of agricultural products and certain products not listed in Annex I to the EC Treaty, excluding fishery products.

(1) OJ C 272, 28.10.1986, p. 3.

(2) OJ C 302, 12.11.1987, p. 6.

(3) OJ C 28, 1.2.2000, p. 2.

(4) OJ C 19, 20.1.2001, p. 7.

(5) OJ L 337, 30.12.1999, p. 10.

(6) OJ L 336, 23.12.1994, p. 22.

(7) Judgment of the Court of First Instance in Case T-184/97 BP Chemicals Ltd v Commission [2000] ECR II-3145, paragraph 55.

(8) Judgment of the Court of Justice in Case 249/81, Commission v Ireland [1982] ECR 4005, at paragraph 23.

(9) OJ L 109, 6.5.2000, p. 29.

(10) Judgment of the Court of Justice in Case C-324/98 Teleaustria Verlags GmbH v Telekom Austria AG [2000] ECR I-10745.

(11) OJ L 10, 13.1.2001, p. 33.

(12) OJ L 17, 21.1.2000, p. 22.

(13) OJ L 204, 11.8.2000, p. 1.

(14) OJ L 208, 24.7.1992, p. 9; Regulation as amended by the Act of Accession of Austria, Finland and Sweden.

(15) OJ L 198, 22.7.1991, p. 1; Regulation as last amended by Commission Regulation (EC) No 436/2001 (OJ L 63, 3.3.2001, p. 16).

(16) OJ L 208, 24.7.1992, p. 1; Regulation as last amended by Commission Regulation (EC) No 2796/2000 (OJ L 324, 21.12.2000, p. 26).

(17) OJ L 179, 14.7.1999, p. 1; Regulation as last amended by Regulation (EC) No 2826/2000 (OJ L 328, 23.12.2000, p. 2).

(18) OJ L 83, 27.3.1999, p. 1.

ANNEX I

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ANNEX II

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