PROTOCOL 3 on the functions and powers of the EFTA Surveillance Authority in the field of State aid

Article 1

1. The EFTA Surveillance Authority shall, in cooperation with the EFTA States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measures required by the progressive development or by the functioning of the EEA Agreement.

2. If, after giving notice to the parties concerned to submit their comments, the EFTA Surveillance Authority finds that aid granted by an EFTA State or through EFTA State resources is not compatible with the functioning of the EEA Agreement having regard to Article 61 of the EEA Agreement, or that such aid is being misused, it shall decide that the EFTA State concerned shall abolish or alter such aid within a period of time to be determined by the Authority.

If the EFTA State concerned does not comply with this decision within the prescribed time, the EFTA Surveillance Authority or any other interested EFTA State may, in derogation from Articles 31 and 32 of this Agreement, refer the matter to the EFTA Court directly.

On application by an EFTA State, the EFTA States may, by common accord, decide that aid which that State is granting or intends to grant shall be considered to be compatible with the functioning of the EEA Agreement, in derogation from the provisions of Article 61 of the EEA Agreement, if such a decision is justified by exceptional circumstances. If, as regards the aid in question, the EFTA Surveillance Authority has already initiated the procedure provided for in the first subparagraph of this paragraph, the fact that the State concerned has made its application to the EFTA States shall have the effect of suspending that procedure until the EFTA States, by common accord, have made their attitude known.

If, however, the EFTA States have not made their attitude known within three months of the said application being made, the EFTA Surveillance Authority shall give its decision on the case.

3. The EFTA Surveillance Authority shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the functioning of the EEA Agreement having regard to Article 61 of the EEA Agreement, it shall without delay initiate the procedure provided for in paragraph 2. The State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.

Article 2

1. An advisory committee shall assist the EFTA Surveillance Authority in its examination of aid granted for transport by rail, road and inland waterway. The committee shall have as chairman a representative of the EFTA Surveillance Authority and shall consist of representatives appointed by each EFTA State. Not less than 10 days' notice of meetings of the committee shall be given and such notice shall include details of the agenda. This period may be reduced for urgent cases.

2. The committee may examine, and give an opinion on, all questions concerning the operation of the provisions of the EEA Agreement on the granting of aid in the transport sector.

3. The committee shall be kept informed of the nature and amount of aid granted to transport undertaking and, generally, of all relevant details concerning such aid, as soon as the latter is notified to the EFTA Surveillance Authority in accordance with the provisions laid down in Annex XIII, Section I (iv), to the EEA Agreement governing the granting of aid in the transport sector.