ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(78)202
Vol.1978/0067

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(78)202final
Brussels,23May1978
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Proposalfora
COUNCILREGULATION
amendingRegulation (EEC)"To1191/69onactionbyMember
Statesconcerningtheobligationsinherentintheconcept
ofapublicserviceintransportbyrail,roadandinland
waterwayandRegulation(ESC)ITO1107/70onthegranting
ofaidsfortransportbyrail,roadandinlandwaterway
(submittedtotheCouncilbytheCommission)
CO:.;(78)202final

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EXPLANATORY MEMORANDUM
1.ThepresentproposalarisesoutoftheprovisionofArticle9(2)ofthe
Decisionof20May19751whichstatesthat"pursuanttoArticle3(2)of
Regulation (EEC)No1107/70,compensation maybemadeinrespectoftariff
obligations imposedonrailwayundertakings asnotcoveredbyRegulation
(EEC)No1191/69.ActingonaproposalfromtheCommissiontobesubmitted
notlaterthan1January1978,theCouncilshallharmonizetheprocedures
forgrantingsuchcompensation".
2.Theprimaryobjectiveofthisproposalisthereforetoharmonizethe
procedureforgrantingcompensatininrespectofthetariffobligationsin
question;thiswouldbeachievedundertheconditions andinthemanner
describedinparagraphs 5to11.
/
3.TheCommission hascarefullyexaminedthequestionwhethertheproposed
harmonization ofcompensation procedureswillbesufficienttoachieve
thegeneralobjectivesofpolicyforrailwayswithintheCommunity.For
thismeasuresmustformpartofawideractionbasedontheCouncil
Decisionof20May1975whichaimsatimproving,amongotherthings,the
transparency ofStateinterventions andthefinancialsituationofthe
railwayundertakings .
Itiswhy,theCommission considersthatasimpleformalharmonization will
notbyitselfattainthisobjective anditisessentialtodealwiththe
basicproblemwhichexists.
A.Indeed,ifcompensation forthetariffobligations inquestioncontinues
tobetreatedasoptionalaid,therulesdetermining the"compensation
procedures"inrespectoftariffobligations withinthemeaningofArticle
3(2)ofRegulation (EEC)No1107/70mightbeevaded,eitherbythegranting
oftheamountsinquestionaspartofthebalancingsubsidywithinthe
meaningofArticle4ofthisRegulationorbynoaidbeinggrantedwhatsoever .
0JL152of12June1975
2OJL130of15June1970

-12-
Themaintenance ofthisoptionalsystemwouldequallyjeopardizethetransparence
desired,thatisacleardistinction,bymandatoryprovisions,betweenthe
compensations grantedunderprecribedrulesandtheblockbalancingsubsisdies.
Thistransparence willprogressively permitthe"realdeficit"ofrailway
companiestobeisolated,whichisintheinterestoftherailwayundertakings
aswellasthegovernment andcommunitybodies.
5.Inaddition,themerefactofregulatingtheprocedureforreimbursing aid
undertheCouncil'stermsofreferencewouldnotimpartintelligibility tothe
materialcontentof"tariffobligations notcoveredbyRegulation 1191/69".
UnderArticle3(2)ofRegulation No1107/70thisprovisionshouldbenomore
•thanprovisional "untiladoptionofCommunityprovisions"concerningthetariff
obligations inquestion.
TheCommissionhasthereforedeemeditnecessarytoputforwardregulations
whichdefinecomprehensively thecontentoftariffobligations notcoveredby
Regulation (EEC)No1191/69andlay'downtheprocedureforcalculatingthe
relatedcompensation .
6.TheCommissionhasconsideredthequestionwhetherthisrulemakingshouldbe
embodiedinaseparate ■legalinstrumentorbeincorporated intoexisting
regulations .
Inanattempttoachieveconsistency andlegalcertaintyandtosimplifythe
contentofitsproposal,theCommissionhasoptedforthesecondapproach.
Regulation1191/69isindeedthemostsuitableframeworkfortheproposed
arrangements sinceitalreadycontains
(a)apartialdefinitionoftariffobligationsinherentintheconceptofa
publicservice;and

-13-
Cb)theprocedureforcalculatingthecompensation tobegrantedwheresuch
obligations aremaintainedorintroduced.
TheprovisionsofthisRegulation maythereforebeextendedtothosetariff
obligations whichhadhithertonotbeencovered,withouttheneedforany
majorrevision.
7.TheCommissionisawarethat,underArticle15(2)oftheDecisionof20May
1975,itisrequiredtosubmitproposalsformajoramendmentstoRegulation
1191/69,before1January1978,andalsoconsidered whethertheseamendments
couldnotbeincorporated intothisproposal.Theamendments do,however,
raisefairlycomplexquestionsrequiringfurtherstudiesandconsultations .
TheymustalsotakeaccountoftheproposalswhichtheCommissionistosubmit
pursuanttoArticle15(1)regardingthetimelimitandconditionsforachieving
financial balancewhicharethemselves conditional onthemeasures andfinancial
programmes whichtheMemberStateshaveyettosubmittotheCommission .
Further,theCommission considersthatisshouldmoveforwardinstages.
8.ThisproposalisthereforeaimedsolelyatamendingArticle2(5)ofRegulation
(EEC)No1191/69concerningthedefinitionoftariffobligations .Itwidens
thisdefinition byincludingtheobligationtoapplyatarifflevelimposed
bytheauthorities whichiscontrarytoan.fentreprise1scommercialinterest.
1Thisobligation wasatthecentreoftheCommission'sproposalof24May1967,
onwhichRegulation (EEC)No1191/69wasbased.Itisalsomentionedinthe
declaration whichtheCounciladoptedatthesametimegStheRegulation .
TheCommission,liketherailwayandthegovernmentexperts,thinksthatthe
constraintofanimposedtarifflevelwhichhasunfavourable repercussions on
theentiremanagementoftheenterprisewhichissubjectedtoit,istheonly
typeoftariffobligationwhichcanbeaddedtotheotherformsofobligation
containedintheRegulation (EEC)No1191/69.
1
Doc.COM(67)246finalof24May1967

-14-
9.Withregardtotheobligationtorespect,inthetariffs,theprinciples
ofperequationintimeandspaceandequalityoftreatmentforusers,an
whichhad . ,,.,..._obligation/figuredintheabove-mentioned Commissionproposalbutwhichhas
notbeenretainedastariffobligationsinthisproposalforthefollowing
reasons :-
Theprincipleofperequationinspaceandtime(evenpriceperkilometrefor
alllinksandperiodsoftraffic)whichdatesfromthetimeofrailway
monopoly,isnolongerimposedontransportundertakings bythepublic
authorities.Theundertakings,facedwithcompetition,canestablishtariffs
andpricestakingaccountofthemarketsituationandtheircosts.Where
certainundertakingsstillapplyperequatedtariffs(e.g.passengertraffic)
thispracticerespondstotheirowninterestsandtotheneedsforthe
simplification oftariffcomputation .
Italsoappearsexcludedthatthisprincipleswillbereintroduced infuture.
Wantingtoregulatethewaysandmeansinthisproposalwouldbevery
theoretical andfarfromusefulandwouldgoagainstthegeneralorientation
ofthecommontransportpolicywhichaimsatthereductionofstateinterventions
inpriceformation.
Asregardstheprincipleofequaltreatment,itisaquestionofapplying
thecommunityrulesofnon-discrimination ,nationalandinternational which
donotconstitute apublicserviceobligation.
10.Thenewdefinitionoftariffobligationdoesnotmodifythepresentprovision
accordingtowhichpricefreezingmeasuresapplicabletoalleconomicsectors
doesnotraisethenotionoftariffobligationsinthesenseofthepresent
regulation.
Onthecontrary,itsuppressesthesecondexceptionconcerning"themeasures
takenregardingpriceandgeneralconditionsoftransportinviewofthe
organization ofthemarketorapartthereof."

-15-
Infact/themaintenanceofthisprovision/whichhasneverhadusedinpractice/
wouldriskgivingrisetodifferentinterpretations becauseofitsimprecise
wordingandcouldpermitevasionofthenewproposedregulation.
1.Amendmentofthedefinitionoftariffobligation doesnotnecessitate the
amendingofotherprovisionsoftheRegulation because:
(i)theprincipleofterminatingobligationslaiddowninArticle 1applies
inaspecialway,totariffobligationsinvolvingtheimpositionofa
tarifflevel.Thecommontransportpolicyaimstoeliminatesuchinter-
1ventionbyStatesparticularly inthegoodstrafficsector;
(ii)Thecriterionforthemaintenance ofapublicserviceobligationreferred
toinArticle3-namelytheguaranteetosupplyadequatetransport
services-mayalsobeappliedtotheimpositionofatarifflevelonthe
groundsthatthiscriterionmustbeseenessentially intermsofthe
"publicinterest"andintermsofthe"transportratesandconditions
whichcanbequotedtousers".TheCommission alsointendstoclarifythis
criterionintheproposalsitistosubmitpursuanttoArticle15(2)of
theCouncilDecisionof20May1975;
(iii)Themethodofcalculating compensation fortariffobligations provided
forinArticle11ofRegulation 1191/69mayalsobeappliedtothewidened
conceptoftariffobligation;theCommissionproposalof24May1967,too,
madenoprovisionforspecialmethodsinthiscontext.Theprovisions of
Article11ensurethattheundertaking doesnotderivemorebenefitfrom
atariffamendmentbeingturneddownthanfromitbeingaccepted;
Civ)ThesameistruefortheprovisionsoftheRegulationrelatingto
procedure;Article14isofparticular importanceinthisrespectwhere
atarifflevelisimposed.
Seeproposalof10October1975/asamendedon13April1977/foraCouncil
Regulation (EEC)concerningthefixingofratesforinternational goodstransport
byrailwithintheCommunity.(0JC1of5.1.1976and0JC185of3.8.1977)

-16-
12.Theextensionoftheconceptoftariffobligationappliestoalltheundei–
takingsreferredtoinArticle19(1)and(2)oftheRegulation andthus
guaranteesequalityoftreatmentinthisrespect.
13.Theamendmentofthedefinitionoftariffobligationcontainedinthisproposal
isofacomprehensive natureandthusrequiresthesimultaneous amendmentof
Article3(2)ofRegulation1107/70,thefirstsub-paragraph ofwhichshouldbe
deleted.

-17-
Proposalfora
"COUNCIL"HEGULATIOir
amendingRegulation (EEC)Uo1191/69onactionby
MemberStatesconcerningtheobligationsinherentintheconceptofapublic
serviceintransportbyrail,roadandinlandwaterway
and
Regulation (EEC)No1107/70onthegrantingof >
aidsfortransportbyrail-roadandinlandwaterway.
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,and
inparticularArticles75and94thereof,
HavingregardtotheproposalfromtheCommission,
.......,.._ _..1HavingregardtotheOpinionoftheEuropeanParliament,
~..... . .2Havingr.egardtotheOpinionoftheEconomicandSocialCommittee,
Whereasthedefinitionoftariffobligationsetout"in"Article2(5)of"Council ~
Regulation(EEC)Ifo1191/69of26June1969onactionbythe'MemberStates
concerningtheobligationsinherentintheconceptofapublicserviceintransport
byrail,roadandinlandwaterway"^doesnot•includealltheelementswhichcould
betermedtariffobligationsinherentintheconceptofapublicservice,
WhereasCouncilRegulation(EEC)No1107/70of4'June1970on"thegrantingof
aidsfor"transport "byrail,roadandinlandwaterway^,asamendedlayRegulation
(EEC)Ifo1473/755,
1
2
0JI.To"L155,28.6.1979,"p.l.
AOJIloC130;15.6.1970,p.l.
^OJNoL152,12.6.1969,p.i.

-18-
laysdownprovisionalarrangements pendingtheadoption
ofCommunityregulations 'inrespectoftariffobligations not
coveredbyRegulation (EEC)No1191/69;
Whereastheadoptionofcomprehensive anddefinitiverulesregardingtariff
obligationswithinthemeaningofRegulation (EEC)No1191/69arises
inparticularfromtheneedtoimprovethetransparency offinancialinter­
ventionbyStatesinfavouroftherailwayundertakings withinthemeaningof
CouncilDecision75/327/EECof20May1975ontheimprovementofthesituation
ofrailwayundertakings andtheharmonization ofrulesgoverningfinancial
... 1relationsbetweensuchundertakings andStates;
WhereasthetariffobligationreferredtoinArticle2(5)ofRegulation(EEC)
Ho1191/69shouldtherefore "bewidenedtoincludetheobligationforunder­
takingstocomplywithageneralleveloftariffs,contrarytotheircommercial
interests,fixedorapprovedbyanypublicauthority ;
Whereas,thefirstindentofArticle3(2)ofRegulation(EEC)HoIIO7/7O
isconsequently nolongermaterial,
HASADOPTEDTHISREGULATION :
Article 1
Article2,(5)ofRegulation (EEC)No1191/69isherebyamendedtoreadas
follows:
"5.ForthepurposesofthisRegulation,tariffobligations' meansanyobli­
gationimposedupontransportundertakingstoapplyratesfixedorapproved
byanypublicauthoritywhicharecontrarytothecommercialinterestsofthe
undertakingandwhichresultfromtheimpositionoforrefusalto,modify:
OJHoL15212.6.1975 »P.3

-19-
(a)specialtariffmeasures,especiallyforcertaincategoriesofpassenger,
certaincategoriesofgoodsoncertainroutes;
(b)thegeneralleveloftariffs.
Theprovisionsofthe.foregoingsubparagraphshallnotapplytoobligations
arisingfromgeneralmeasuresofpricepolicyapplyingtotheeconomyasawhole"•
Article2
Article3(2)ofRegulation (EEC)No1107/70ishere"byamendedtoreadasfollows:
"2.Asregardsreimbursement forthedischargeofobligations inherentinthe
conceptofapublicservice:
"untiltheentryintoforceofrelevantCommunityrules,wherepaymentsare
madetorail,roadandinlandwaterwaytransportundertakings ascompensation
forpublicserviceobligations imposeduponthembytheStateor'public
authorities andcoveringthetransportundertakings oractivitiestowhich
Regulation(EEC)ITo1191/69doesnotapply."' "
ThisRegulationshallbebindinginitsentiretyanddirectlyapplicableinall
MemberStates.
DoneatBrussels,
FortheCouncil.
ThePresident.