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Vol.1975/0106

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COM(75)301 final
Brussels ,20June 1975
FIFTH BIENNIAL REPORT
ontheimplementation ofCouncil Decision Ho65/271/EEC
of13May1965 ontheharmonization ofcertain provisions
affecting competition intransport byrail ,road andinland
waterway
(lJune 1973 -31May1975 )
(submitted totheCouncil "bytheCommission )
COMC75 )301final

Thisdocumentconstitutes theFifthBiennialReportontheimplementation
ofCouncilDecisionNo65/271/EECof13MayI965ontheharmonization of
certainprovisionsaffectingcompetitionintransportbyrail,roadand
inlandwaterway^^.IthasbeendrawnupinimplementationofArticle15
oftheaboveDecision.
Itcoverstheperiod1June1973to31Hay1975*
Thegreateststepforwardduringthisperiodwastheadoptionbythe
CouncilofaDecisiontakeninimplementation ofArticle8oftheDecision
of13May1965providingfortheprogressiveharmonization oftherules
~<vcrningfinancialrelationsbetweenr?„ilwayundertakings andtheMember
States.TliisDecision,whichwassupplemented byanamendmenttoRegu­
lationNo1107/70onthegrantingofaidfortransportbyrail,roadand
inlandwaterway,isanalyzedinthisreport(pages7and8).Itsimplemen­
tationwillmakeitpossibleforlong-termactiontobetakeninthe
Communitytoenabletherailwayundertakings toimprovetheirfinancial
situationandplaytheirfullroleintheCommunitytransportsystem.
SectionIIoftheDecisionof13May1965whichdealswithprovisions
concerningcertainkindsofStateintervention hasthereforebeenfully
implemented .Someofthemeasuresadoptedinimplementation ofthe
ArticlescontainedinSectionIIshouldundoubtedly beimprovedandper­
fectedinthelightofexperience ,butitisclearthattheobjectives
laiddownbytheCouncilintheSectionhavebeenachieved.
LessprogresshasbeenmadewithregardtotheothertwoSections.
(1)OJNo88,24Hay1965.p.1500

Theobjectiveslaiddownin-Articles3and4ofSectionI(Taxation)
havebeenachieved,butnotthoseinArticles1and2:proposalsmade
bytheCommissioninthisconnectionaxestillbeingexaminedbythe
Council.
AlargepartofSectionIII(Socialprovisions)hasbeenimplemented
byRegulation(EEC)NO543/69ONtheharmonization ofcertainsocial
legislationrelatingtoroadtransportandRegulation(EEC)no14-63/70
ontheintroduction ofrecordingequipmentinroadtransport.The
harmonization ofsociallegislation ,however,hasstilltobeextended
tootherformsoftransport ,andotherprovisionsareyettobeadopted
inrespectofroadtransport.
MuchhasstilltobedonebeforetheDecisionof13May1965isfully
implemented.Takingintoaccountthecomplexityoftheproblemsinvolved
andtheenlargement oftheCommunityduringtheperiodinquestion,the
FifthBiennialReportispositiveinitsconclusions.

Situationasat1June1975
SECTIONI
Taxation
Article1(a)-Abolitionofdoubletaxationonmotorvehicles
TheCouncildidnot,duringthereferenceperiod,resumeexamination of
theproposalforaCouncilRegulation ontheabolitionofdoubletaxation
onmotorvehiclesinthefieldofinternational transport.
ThecommentsmadeintheFourthBiennialReportarestillvalidinthat
thereisageneraltendencyonthepartofdelegations oftheMember
Statestosolvetheprobleminquestion,atleastprovisionally ,by
changingthenationaltaxationsystemsforcommercialvehicles.
Article1(b)-Duty-freeadmissionoffuelcontainedinthefueltanks
ofcommercial motorvehicles
TheCouncilDirectiveof19July1968^imposesaminimallimitof50
litresoffuelforduty-freeadmission.InanOrderof12October1973the
FrenchGovernmentdecidedtoallowduty-freeimportationof100litres
offuel.SincethenonlyGermanyhasrespectedthelimitof50litres.
Asitwasfoundthattiechangesinthetaxesonfueloilresultedina
concentration ofthevariousnationaltaxesaroundtheCommunityaverage
incontrasttothesituationon1February1969,theCommission )in
implementation oftheaboveDirective,presentedtotheCouncilaproposal
(2}foraDirective v'amendingtheaboveDirectivebyraisingthelimitto
(1)OJL175,23July1968,p.15
(2)OJC104,13September1974,p.96

100litres.TheEuropeanParliament^andtheEconomicandSocial
(2},...'.
Cornaittee'approvedthxsproposai.
Atitsmeetingon11December1974theCouncildiscussedthismatter.
Asnoagreementwasreacheditagreedtoincludetheitemontheagenda
foritsnextmeetingontransport.
Article1(0)-Duty-freeadmissionoffuelcontainedinthefueltanks
ofinlandwaterwayvessels
ThecommentsmadeintheFourthBiennialReportarestillvalidinthat
theabsenceofCommunityprovisionsonthissubjectdoesnotpresentany
difficulties ,sincetheimportation offuelcontainedinthefueltanks
ofvesselsisnotsubjecttotaxationinany'ofthebriberStatesexcept
undercertainspecialconditions. N
Article2-Adoptionofauniformbasisforthecalculation oftaxonmotor
vehicles
TheproposalforthefirstDirectiveconcerningchangestothenational
taxationsystemsforcommercialvehicles,whichmeetstherequirements
ofthisArticle,isstillbeingexaminedbytherelevantCouncildepart­
ments.Themethodstobeusedforthecalculation ofthemarginalcost
ofusingroadinfrastructures ,whichleavetheMemberStatesacertain
amountofchoice,havebeenworkedoutandapprovedinprinciplebythe
majorityofthedelagations.TheywillappearintheAnnextotheDirective,
ofwhichtheyareanimportantandintegralpart.Atthebeginningof1975»
thoseMemberStateswhoconsidereditnecessarydidaseriesofcalculations
onthebasisoftheabovemethodsandthedraftDirectivetoestablish
themarginalcostsofuseand"theminimumtaxesonvehicles.Thiswork
wascoordinatedatCommunitylevelbytheCommission ,assistedbya
Committeeofexperts.TheCouncilinstructeditsdepartmentstoacton
theDirectiveanditsAnnexat'itsnextmeeting.
(1)OJC155,9December1974,p.77
(2)OJC142,16November1974,p.11

Article2-Adoptionofauniformbasisfor-thecalculation of-taxon
inlandwaterwayvessels
ThecommentsmadeintheThirdBiennialReportarestillvalid•
Article3–AlignmentofthetaxationBystemsforthecarriageofgoods
"bytransport -undertakings andcarriageofgoodsbyother
imdertakingsfortheirownrequirements
\
IntheFourthBiennialReportITWUJ 'fcYusfcI'.'HFT^ComroiBei«n.Hsu3.SLSICJOC!
theBelgianGovernmenttoabolishunfairtreatmentoftransportunder­
takingscarryinggoodsfortheirownrequirements whichhadresultedfrom
certainprovisionsofthelawof26February1969ontaxesequivalentto
incometax.ItshouldbeaddedthattheBelgianGovernmentsaiditwould
remedythesituationoncetheCouncilactedontheproposalfora
Directiveonchangesinthenationaltaxationsystemsforcommercial
vehicles.
Article4-Application ofvalueaddedtaxonthecarriageofgoods
ValueaddedtaxonthecarriageofgoodsischargedinNearlyallthe
MemberStatesbeitontransportorthefinishedproduce.

SECTION II
Provisions concerning certain kinds ofState intervention
Articles 5.6and7-Abolishing ormaintaining obligations inherent in
thepublic service concept imposed ontransport
•undertakings ,compensation tooffset the costs
entailed andnormalization ofaccounts ofrailway
■undertakings
A.Application ofCouncil Regulations (EEC)Nos1191/69andll°2/69of
26June1969^^byMember States
2)Pursuant theabove twoRegulations theCommission sent areport 'to
theCouncil on21February 1973 concerning the implementation of
Council Regulation (EEC)No1191/69,andforwarded another report^
tothelatter on30October 1972 onthenormalization ofthe accounts
ofrailway undertakings with respect toexpenditure onretirement
benefits andpensions .These tworeports ,which arereferred toin
theFourth Biennial Report ,were examined bytheWorking Party on
Transport andtheCommission wasasked todraw upasecond report on
theimplementation ofthe above twoRegulations by30iJay1573 •The
report wastransmitted totheCouncil on24June1974^•
Inthis report theCommission stated that theaction taken bytheMember
States hadconsisted largely ofmaintaining themajority oftheobli­
gations inparticular forpassenger traffic ,andgranting compensation
tooffset the costs entailed .Italso found that certain procedures
fortheimplementation ofthetwoRegulations should beharmonized
further andoutlined thesteps itintended totake inthis connection .
TheWorking Party onTransport approved these measures andhoped that
information ontheimplementation ofthetwoRegulations would be
included inthereport tobedrawn upunder Article 14oftheCouncil
(1)OJL156 ,28June 1969 ,pp.1and8
(2)Doc.SEC(73)519final
(3)Doc.SEC(72)3510 final
(4)Doc.SEC(74)2219 final ,18June 1974

Decisionof.21May.1975 •<1•onthc^improvementofthefinancial
situationoftherailwayundertakings i,'
ThethreenewMemberStateshaveinformedtheCommission oftheirarran­
gementsfortheimplementation oftheRegulations andtheprovisional
amountsgranted "bywayofcompensation underthetwoRegulationsinquestion
On24April.1975-"theCommissionissuedafavourableopinionon
Ireland'sarrangementsforimplementingRegulationsNos1191/69and1192/69.
ThearrangementsenvisagedbytheUnitedKingdomandDenmarkarebeing
studied.
B.ExtentionofthefieldofapplicationofRegulations Nos1191/69a^.d
AsindicatedintheFourthBiennialReporttheCommissionpresentedpro­
posalstotheCouncilon18and19December1972extendingthefieldof
applicationoftheaboveRegulations.
However,theCouncilhasnotyetreachedagreementontheseproposals.
(2)Articles5and6oftheDecisionof13May1965coveralltransport
undertakings andArticle7allrailwayundertakings.
Article8-Financialrelationsbetweentherailwayundertakings and
MemberStates
AsindicatedintheFourthBiennialReporttheCommission,inimplemen­
tationofthisarticle,presentedtotheCouncilon18August1971apro­
posalforaDecisionconcerningtheestablishment onasounderfooting
ofthefinancialsituationofrailwayundertakings andtheharmonization
oftherulesgoverningfinancialrelationsbetweentheseundertakings1192/69
01xnertu.esgoverning 11
andtheMemberStates.
(1)0J
(2)0J88,24May1965,p.1500/65
(3)OJC106,23October1971,p.42

TheCouncil felt that inview ofthemajor difficulties which hadarisen ~
during examination oftheproposal ,itwasnecessary tosettle anumber
ofimportant issues inorder toestablish guidelines forfurther study of
theproposal .On27June 1974 theCouncil adopted aresolution asa
result ofwhich itwasable toreach agreement inprinciple onthedraft
decision atitsmeeting of11December 1974 *Thedecision wasformally
adopted on21Max >1975 «-.
t
Themain points ofthedecision ,which applies only tothemajor national
railway undertakings ,aresetoutbelow :-
(a)Theundertaking must have sufficient independence inrespect of
management ,administration andinternal administrative ,economic and
financial control toachieve financial equilibrium .This means that
itsassets ,budget andaccounts must boseparated from those ofthe
State .Theundertaking must bemanaged inaccordance with business
principles .This applies also totheir public Bervice activities .
(b)Theundertaking andtheState shall cooperate indrawing upaprogramme
ofactivity aimed atachieving thefinancial equilibrium oftheunder­
taking .They shall determine thearrangements forborrowing andfor
financing investment andalso prepare afinancial plan under which the
State maygrant theundertaking temporary subsidies tohelp itto
achieve financial equilibrium .
(c)TheState shall decide onthepresentation ofthebudget andannual
accounts andtheprocedure andconditions fortheir approval .
(d)Theundertaking maybeauthorized tocarry outortoparticipate
directly orindirectly inoperations orventures outside thescope
ofitsnormal activities ortomake use ofothertypes oftransport .
(D
(2)OJC111of23September 1974 ip.1

-8-
(e)TheMember State andtheCommission shall jointly seek ways of
promoting cooperation between therailway undertakings .
Inaddition topromoting cooperation theCommission will also :- •
(a)prepare abiennial progress report onthefinancial situation ofthe
railway undertakings ;'
(b)draft proposals (tobeadopted bytheCouncil by1February 1978 )"to
make theaccounts andbalance sheets ofthevarious railway under­
takings mutually comparable andlaydown uniform principles forcostings
(c)prepare areport by1January 1979 on "thelong-term objectives andways
topromote tho integration oftherailway undertakings atCommunity
level ;
(d)forward detached proposals totheCouncil by1January 1978 oncompen­
sation inrespect oftariff obligations notcovered byRegulation
(EEC)No1191/69; -
(o)forward proposals totheCouncil by1January 1980 on :-
1)thetimetable andconditions fortherailway undertakings to
achieve financial equilibrium ,
2)possible amendments toRegulations' H91/69and1107/70^^to
take account ofchanges inthe concept ofpublic service *
(1)OJL130of15June 1970

-9-
Article9-Aidtothetransportundertakings
A.TheadoptionbytheCounciloftheabove-mentioned decisiononthe
improvementestablishment onasounderfootingofthefinancial
situationofrailwayundertakings hasmadeitnecessarytoamend
Article4ofRegulation1107/70inorderto:-
(a)providealegalbaseforthefinancialinterventionpermitted
underArticles5§1and13oftheabove-mentioned Council
Decisionprovidedittakestheformofaid}
(b)applytothemthesimplifiedprocedureforinformingtheCommission,
laid'downinArticle5§2ofRegulation1107/70*
TheCommissionforwardedtheappropriateproposalforare0ulr.t.:-c_i
amendingRegulation1107/7025November1974^.TheEconomicand
SocialCommitteeandtheEuropeanParliamentdeliveredfavourable
opinionson30January1975^and21March1975^respectively.
TheCounciladoptedtheRegulationon.21-Hay1965-•atthesame
timeasitadoptedtheDecisiononestablishing thefinancialsitua­
tionofrailwayundertakings onasounderfooting.
/
B.TheadvisorycommitteesetupunderArticle6ofRegulation1107/70
wasenlargedtoincludedelegatesfromthenewMemberStates.
(1)OJC158of17December1974,p.19
(2)OJC62of15March1975»p.27
(3)OJC76of7April1975,P.43

-10-
SECTIONIII
Provisions onsocialmatters
1.RoaàTransport
Anamendment designedtotakeaccountofthewishesoftheEuropean
Parliament andoftheEconomicandSocialCommitteetotheproposalfor
(2)aCouncilRegulation'amendingRegulation(EEC)No543/69concerning
certainsociallegislationrelatingtoroadtransport(2ndRegulation)
wassenttotheCouncilon1October1974*
UnderthetermsofArticle5ofRegulation(EEC)No543/69•adraft
directivelayingdownaminimumlevelofprofessional trainingforroad
passengertransportdriversover21yearsofagewasdiscussedinthe
TransportGroupoftheCouncilon23October1973*Theopinionwas
expressedthattheproposalwent"beyondtherequirements ofArticle5«
ForthatreasontheservicesoftheCommissionarenowdrawingupa
newsimplifiedproposalwhichwillbesubmittedtotheCouncilindue
course.
Discussions havetakenplacewithnationaladministrations ontheappli­
cationofRegulation(EEC)No543/69an&theCommission'sServiceshave
heardsuggestionsforpossibleamendmentstotheRegulationwhichare
intendedtoensuregreatereaseofapplication ofitsprovisions.
1 iù.... -y>'\lua.»
r-Lr•'■r:-*-.nc3l.""- *>■)prsssfor
ii."*.:J.srvtr^ ':?-erj.
TheCommissionhasalsosubmittedtotheCouncilaproposedregulation
whichprovidesforthesimultaneousratification ofAETRbeforethe
15June1975.
*
**
(1)C0M(74)1529final
(2)C0M(72)846final
(3)COM(75)183final

-11-
Regulation(EEC)Ro1463/70of20July1970ontheintroductionofrecording
equipmentinroadtransport^hasmadeitcompulsorysince1January1975
toinstallanduserecordingequipmentinvehiclesfirstregisteredafter
thisdate,exceptforcertaincategoriesofvehicle,andinvehiclesused
forthecarriageofdangerousgoodsirrespective ofthedateofregistration .
Regulation(EEC)NO1787/73of25January1973amendedtheabove-mentioned
regulation "bypostponingcompulsoryinstallation anduseofrecording
equipmentinthenewMemberStatesuntil1January1976.
TheCommissionstaff,inconjunctionwithnationalexperts,havere-examined
thetextofRegulation(EEC)NO1463/70sinceitsadoptioninorderto
establishauniform,correctinterpretation ofthistextandtotakeaccount
ofpracticalconsiderations concerningtheconstruction anduseofrecording
equipment.
WhenthisworkhasbeencompletedtheCommissionwillproposeanumberof
amendmentswhichwillnot,however,substantially changetheconditions
forthemanufacture andthetechnicalspecifications oftherecording
equipmentasdefinedatpresentintheRegulation.
2.InlandNavigation
AdraftproposalforaRegulationoftheCouncilharmonisingcertainsocial
provisionsinthefieldofInlandNavigationwillbesubmittedsoonbythe
CommissiontotheCouncil.Thisdraftproposalcovers:workingtimeand
restbreaks:dutytimeatthewheelandattheradarscreen:dailyrest
periods:periodicrestperiods:annualleaveandpublicholidays:
make-upofcrews:andmethodsofcontrolovertheprovisionsoftheregu­
lation.•
(1)0JL164/1of27July1970

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3.Railways
Contacttookplacewiththetwosidesoftheindustrywithinthe
fraaeworkofadhocmeetingspreparatorytcestablishing ajoint
advisorycommittee.Inall,fourmeetingswereheldduringwhich
discussiontookplaceonadocumentonworkingconditionsprepared
"bytherailwayemployers.