COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 02.05.1997 
COM(97) 179 final 
97/0125 (ACC) 
Proposal for a Council and Commission Decision 
On the position to be taken by the Community within the Association Council established 
by the Europe Agreement between the European Communities and their Member States 
of the one part, and the Slovak Republic, of the other part, signed on 4 October 1993, 
with regard to the adoption of the necessary rules for the implementation of Article 64 
paragraph 1 (iii) and paragraph 2 of the Europe Agreement and Article 8(1) (iii) and (3) 
of Protocol 2 to the said Agreement on ECSC products 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
Article 64 (3) of the Europe Agreement establishing an association between the European 
Communities and their Member States, of the one part, and the Slovak Republic, on the 
other part signed in Brussels on 4 October 1993, provides that the necessary rules for the 
implementation of paragraphs 1 and 2 of that Article (i.e. competition provisions and 
provisions on state aids) shall be adopted by the Association Council. The time-limit for 
these rules to be adopted is three years from the entry into force of the Agreement; in 
accordance with Article 124, the time-limit runs from 1 January 1992. 
The provisions on state aids are one of the basic points of the Europe Agreement between 
the European Communities and the Slovak Republic. Their actual implementation, 
through the adoption of the attached rules by the Association Council is a prerequisite for 
the smooth development of trade between the two parties. Covering any aid granted by 
the State or through State resources in any form whatsoever which might affect trade 
between the European Community and the Slovak Republic, the proposed decision lays 
down cooperation between the two parties' monitoring authorities. 
According to Article 2 (1) of the Decision of the Council and the Commission of 19 
December 1994 on the conclusion of the Europe Agreement the position to be taken by 
the Community within the Association Council shall be laid down in accordance with the 
corresponding provisions of the Treaties establishing the three Communities. Article 113 
and 228 of the EC Treaty as well as Article 95 of the ECSC Treaty are an appropriate 
legal basis for the position to be adopted by the Community in the Association Council 
with regard to the implementing rules for state aids. (The application of the conditions 
resulting from Article 92 of the EC Treaty to aids granted by the Slovak Republic 
requires, if their compatibility with the Europe Agreement is to be ensured, the 
introduction by the Association Council of specific arrangements which then come 
under the commercial policy). It is therefore desirable that the Council and the 
Commission adopt the attached decision. 
The Commission therefore requests the Council to adopt the attached proposal for a 
Council and Commission Decision. 
Proposal for a Council and Commission Decision 
On the position to be taken by the Community within the Association Council established 
by the Europe Agreement between the European Communities and their Member States 
of the one part, and the Slovak Republic, of the other part, signed on 4 October 1993, 
with regard to the adoption of the necessary rules for the implementation of Article 64 
paragraph 1 (iii) and paragraph 2 of the Europe Agreement and Article 8(1) (iii) and (3) 
of Protocol 2 to the said Agreement on ECSC products 
The Council of the European Union, 
The Commission of the European Communities, 
Having regard to the Treaty establishing the European Community, and in particular 
Article 113 in conjunction with the first sentence of Article 228 (2) thereof, 
Having regard to the Treaty establishing the European Coal and Steel Community and in 
particular Article 95 thereof, 
Having regard to the proposal of the Commission of the European Communities, 
Having regard to the opinion of the Consultative Committee, 
Whereas the European Community and its Member States concluded the Europe 
Agreement with the Slovak Republic on 19 December 1994; 
Whereas Article 64 (3) of the Europe Agreement lays down that the Association Council 
shall adopt the rules necessary for the implementation of paragraphs 1 and 2 of that 
Article; 
Whereas Article 8 (3) of Protocol 2 to the Europe Agreement on products covered by the 
ECSC Treaty lays down that the Association Council shall adopt the necessary rules for 
the implementation of paragraph 1 and 2 of that Article; 
Whereas the application of the conditions contained within Article 92 of the Treaty 
establishing the European Community to aids granted by the Slovak Republic requires that 
specific arrangements be drawn up to apply to trade between the European Community 
and the Slovak Republic, 
HAVE DECIDED AS FOLLOWS: 
The position to be taken by the Community within the Association Council established by 
the Europe Agreement between the European Communities and their Member States, of 
the one part and the Slovak Republic of the other part, with regard to the rules 
implementing Article 64 (1) (iii) and (2) of the aforementioned Europe Agreement, and to 
the rules implementing Article 8 (1) (iii) and (3) of Protocol 2 on ECSC products to the 
Europe Agreement shall be based on the draft decision of the Association Council 
annexed to this Decision. 
Done at Brussels on 
For the Council For the Commission 
%: VO 
Association between the European Union 
and the Slovak Republic 
The Association Council 
Draft decision n°.../... of the Association Council 
between the European Communities and their Member States of the one part 
and the Slovak Republic of the other part 
of.../... 
adopting the necessary rules for the implementation of Article 64(l)(iii) and (2) of the 
Europe Agreement between the European Communities and their Member States of the 
one part and the Slovak Republic of the other part, and the rules for the implementation of 
Article 8(l)(iii) and (3) of Protocol 2 on ECSC products to the said agreement on ECSC 
products 
The Association Council, 
Having regard to the Europe Agreement establishing an association between the European 
Communities and the Member States of the one part, and the Slovak Republic of the other 
part, and in particular Article 64(3) thereof, 
Having regard to Protocol 2 on ECSC products in the aforementioned Europe 
Agreement, and in particular Article 8(3) thereof, 
Whereas Article 64(3) of the Europe Agreement lays down that the Association Council 
shall, within three years of the entry into force of the Agreement, adopt by decision the 
necessary rules for the implementation of paragraphs 1 and 2 of that Article; 
Whereas Article 8(3) of Protocol 2 to the Europe Agreement lays down that the 
Association Council shall, within three years of the entry into force of the Agreement, 
adopt by decision the necessary rules for the implementation of paragraphs 1 and 2 of that 
Article; 
HAS DECIDED AS FOLLOWS: 
The necessary rules implementing Article 64(l)(iii) and para 2 of the Europe Agreement 
establishing as association between the European Communities and their Member States 
of the one part, and the Slovak Republic of the other part, and the rules implementing 
Article 8(l)(iii) and (3) of Protocol 2 on ECSC products to the aforementioned Europe 
Agreement, as set out in the Annex to this Decision, are hereby adopted. 
Done at Brussels on 
The Secretaries For the Association Council 
The President 
Implementing Rules for State Aids 
Rules for the implementation of the provisions on state aid provided for in Article 64 
(l)(iii) and (2) pursuant to Article 64 (3) of the Europe Agreement between the European 
Communities and their Member States, of the one part, and the Slovak Republic of the 
other part, 
Having regard to Article 64 (l)(iii), (2) and (3) of the Europe Agreement between the 
European Communities and their Member States, of the one part, and the Slovak 
Republic, of the other part, 
Whereas it is recalled that in accordance with Article 64 (2) of the Europe Agreement, the 
notion of "public aid" as contained in Article 64 (l)(iii) of the Europe Agreement shall be 
assessed on the basis of the criteria arising from the application of the rules of Article 92 
of the Treaty establishing the European Community, and thus covers any aid granted by 
the State or through State resources in any form whatsoever which distorts or threatens to 
distort competition by favouring certain undertakings or the production of certain goods, 
insofar as it may affect trade between the European Community (EC) and the Slovak 
Republic (state aid), 
Whereas it is recognised that the Slovak Republic is an economy in transition and faces 
specific problems as a consequence. For the present rules account must be taken of this 
particular situation, 
Whereas account is to be taken of the approximation of legislation as foreseen in the 
Europe Agreement, 
Whereas the Slovak Republic will appoint a national institution or administration to 
become a monitoring authority with responsibility for state aid matters, 
Whereas this monitoring authority will be responsible for the analysis of existing and 
future individual aid awards and programmes in the Slovak Republic, and shall give an 
opinion as to their compatibility with Article 64 (1) (iii), (2) of the Europe Agreement, 
Whereas the Slovak Republic will, when providing for the necessary rules to ensure 
effective supervision, ensure in particular that the monitoring authority receives in due 
time all the relevant information from the other government departments at central, 
regional and local level, 
Whereas the EC Commission will under the relevant Community programmes, assist the 
monitoring authority by providing for documentation, training, study tours and other 
relevant technical assistance, 
The following rules have been adopted for the implementation of Article 64 (l)(iii) and 
(2) of the Europe Agreement: 
SURVEILLANCE OF STATE AID AND MONITORING AUTHORITIES 
ARTICLE 1: SURVEILLANCE OF STATE AID AND MONITORING 
AUTHORITIES 
Subject to the procedural rules in force in the EC and the Slovak Republic, the granting of 
state aid shall be surveyed and assessed as to its compatibility with the Europe Agreement 
by the responsible monitoring authorities in the EC and the Slovak Republic, respectively. 
The monitoring authority in the EC shall be the EC Commission, and in the Slovak 
Republic the Ministry of Finance. 
CONCRETE GUIDANCE FOR DEALING WITH CASES 
ARTICLE 2: CRITERIA FOR COMPATIBILITY 
Regarding the assessment of compatibility of individual aid awards and programmes with 
the Europe Agreement as provided for in Article 1 of the present implementing rules, they 
shall be assessed on the basis of the criteria arising from the application of the rules of 
Article 92 of the Treaty establishing the European Community, including the present and 
future secondary legislation, frameworks, guidelines and other relevant administrative acts 
in force in the EC, the case law of the Court of First Instance and the Court of Justice, 
and the special guidance to be developed pursuant to Article 4 (3). 
Where changes in the secondary EC legislation and other acts as well as the case law as 
provided for in the first paragraph of this Article do not encounter objections on the 
Slovak side within three months, they shall become the criteria of compatibility as 
provided for in the same first paragraph of this Article. 
Where such changes encounter objections on the Slovak side, consultations shall take 
place in the Association Committee, in accordance with the provisions contained in 
Articles 7 and 8 of the present implementing rules. 
The same principles shall apply regarding other significant changes in the EC state aid 
policy. 
The monitoring authority of the Slovak Republic shall be informed of any acts related to 
the adoption, abolition or modification of the criteria of compatibility referred to in the 
first paragraph of this Article as far as these are not published but are specifically brought 
to the attention of all Member States. 
ARTICLE 3. DE MINIMIS AID 
Aid programmes or individual aid awards which do not involve export aid and which are 
limited to a total amount of aid per firm over a three year period of ECU 100,000 shall be 
considered as having only a negligible effect on competition and trade between the Parties 
and are therefore not to be treated under the present implementing rules1. This rule does 
not apply in sectors covered by specific state aid rules. 
1 Amount subject to upward revision by the Sub-Committee in line with internal developments of 
the European Union 
6 
ARTICLE 4: DEROGATIONS 
In accordance with Article 64 (4) (a) of the Europe Agreement, the Slovak Republic shall 
be regarded as an area identical to those areas of the Community referred to in Article 92 
(3)(a)oftheECTreaty. 
The monitoring authorities shall jointly evaluate the maximum aid intensities and specific 
regional coverage of areas eligible for regional assistance. 
The EC Commission and the monitoring authority shall also work out, in addition to the 
types of aid allowed in the Union, special guidance on the compatibility of aid designed to 
combat the specific problems of the Slovak Republic as it undergoes transition to a market 
economy. 
PROCEDURES FOR CONSULTATION AND PROBLEM SOLVING 
ARTICLE 5: EXAMINATION OF CERTAIN AID 
Aid programmes or individual aid awards - whether covered by frameworks and 
guidelines in the Community or not - where the amount of the aid concerns amounts over 
3 million ECU may be referred by the relevant monitoring authority to the Sub-committee 
for Competition for examination. The Sub-Committee may formulate appropriate draft 
decisions or recommendations concerning the compatibility of the aid programme or aid 
award with the Europe Agreement and these implementing rules for the Association 
Committee. 
The principal purpose of such decisions or recommendations should be to avoid resort to 
commercial defence measures as a consequence of the aid in question. 
The Association Committee may decide, upon the joint proposal of the Parties in the 
framework of the Sub-Committee for Competition, to further extend the possibility of 
examination as provided for in this Article. 
ARTICLE 6: REQUEST FOR INFORMATION 
Whenever the monitoring authority of a Party becomes aware of the fact that an aid 
programme or individual aid award appears to substantially affect important interests of 
that Party, it may request information about this from the authority responsible. In any 
event, both authorities shall endeavour to keep each other informed of important 
developments that may be of practical interest for the other. 
ARTICLE 7: CONSULTATION AND COMITY 
Whenever the EC Commission and the Slovak monitoring authority consider that the 
award of state aid on the territory for which the other authority is responsible is 
substantially affecting important interests of the respective Party, it may request 
consultation with the other authority, and consequently it may request that the other 
Party's monitoring authority initiate any appropriate procedures with a view to take 
remedial action. This is without prejudice to any action under the respective Parties' 
relevant legislation and does not hamper the full freedom of ultimate decision of the 
authority so addressed, within the framework set by the provisions of the Europe 
Agreement. 
The monitoring authority so addressed shall give full and sympathetic consideration to 
such views and factual material as may be presented by the requesting authority and in 
particular to the alleged harmful effects on the important interests of the requesting Party. 
Without prejudice to any of their rights and obligations, the monitoring authorities 
involved in consultations under this Article shall endeavour to find, within three months, a 
mutually acceptable solution in the light of the respective important interests involved. 
ARTICLE 8: PROBLEM SOLVING 
Where consultations under Article 7 do not lead to a mutually acceptable solution, an 
exchange of views shall take place within the Sub-Committee for Competition established 
in the framework of the Europe Agreement at the request of one Party within three 
months following the request. 
Following this exchange of views, or after the expiration of the delay stated above, the 
matter may be submitted to the Association Committee which may make appropriate 
recommendations for the settlement of these cases. 
These procedures are without prejudice to any action under the relevant respective 
legislation in force in the territories of the Parties, and without prejudice to Article 64(6) 
of the Europe Agreement. Commercial defence measures should however only be used as 
a last resort. 
ARTICLE 9: SECRECY AND CONFIDENTIALITY OF INFORMATION 
Having regard to Article 64 (7) of the Europe Agreement, neither monitoring authority is 
required to provide information to the other authority if disclosure of that information to 
the requesting authority is prohibited by the law of the authority possessing the 
information. 
Each monitoring authority agrees to maintain the confidentiality of any information 
provided to it in confidence by the other authority. 
TRANSPARENCY 
ARTICLE 10: INVENTORY 
Under the relevant Community programmes, the EC Commission shall assist the Slovak 
Republic to implement these rules, and draw up and thereafter update an inventory of its 
aid programmes and individual aid award, established on the same basis as in the 
Community, in order to ensure and continuously improve transparency. 
The EC Commission shall provide the Slovak Republic with regular information on the 
documentation it produces with a similar aim in relation to the EC Member States. 
ARTICLE 11: MUTUAL INFORMATION 
Both Parties shall ensure transparency in the domain of state aid by providing for 
appropriate publications and the exchange of information on state aid policy on a regular 
and reciprocal basis. 
ECSC PRODUCTS 
ARTICLE 12: TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL 
COMMUNITY (ECSC) 
The provisions contained in Articles 1,2,4(3) and 5 to 11 above shall apply mutatis 
mutandis with respect to the coal and steel sector as referred to in Protocol 2 to the 
Europe Agreement. 
MISCELLANEOUS 
ARTICLE 13: ADMINISTRATIVE ASSISTANCE (LANGUAGES) 
The EC Commission and the Slovak monitoring authority will provide for practical 
arrangements for mutual assistance or any other appropriate solution concerning in 
particular the question of translations. 
Director General for The Slovak Republic 
Competition of the Commission 
of the European Communities 
Alexander Schaub Jozef Magula 
The Director-General State Secretary 
Ministry of Finance 
10 

ISSN 0254-1475 
COM(97) 179 final 
DOCUMENTS 
EN 08 11 
Catalogue number : CB-C0-97-168-EN-C 
ISBN 92-78-18958-8 
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