Proposal for a COUNCIL REGULATION (EEC) concerning arrangements for implementing the Agreement on the European Economic Area
Date: 1992-11-27
Institutions: European Commission
Subjects: EU law, agreement (EU), competition, financial aid, legal basis, legislative procedure

COft/MISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM(92) 495 final 

Brussels, 27 November  1992 

Proposal  for a 

COUNCIL REGULATION  (EEC) 

concerning arrangements for implementing 
the Agreement on the European Economic Area 

(presented by the Commission) 

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Explanatory note 

1. 

On 2 May  1992 the Agreement on the European Economic Area was signed 
by the European Community, its Member States and the EFTA States.  The 
procedures for ratification of the Agreement are well advanced and it 
is expected that the Agreement can enter into force on 1 January 1993. 
The  European  Parliament  gave  its  approval  to  the  Agreement  on 
28 October.  As soon as the ratification instruments are received from 
all Member states, the Council will formally conclude the Agreement on 
behalf of the Community. 

2. 

In addition, the Community must  now determine  certain modalities  for 
its  internal  purposes  to  provide  an  operational  basis  for  the 
implementation  of  the  Agreement  on  the  EEA,  and  in  particular  to 
ensure that rights under the Agreement can be used and obligations can 
be fulfilled. 

3. 

The present  proposal  included modalities  through which  the Community 
can put into practice the following provisions of the EEA Agreement: 

4. 

5. 

6. 

-  articles 112 to 114 on safeguard measures 

articles 2.1  (e), 53 to 60 on competition rules 
consultation  with  EFTA  states  within  the  Banking  Advisory 
Committee and the EC Insurance Committee  (agreed in an exchange of 
letters between the Commission and the EFTA chief negotiator) 
article 4.1 of Protocol 38 on the financial mechanism. 

The common position of the Community for the purposes of the EEA Joint 
Committee  will  be  determined  according  to  the  existing  internal 
Community rules.  Therefore no special article on this matter has been 
inserted in the Regulation. 

The EEA Agreement  allows the Contracting  Parties to  take  appropriate 
safeguard  measures  unilaterally  under  certain  circumstances  and 
subject  to  specific  conditions  and  procedures.  In  addition,  it 
provides  for  the  other  Contracting  parties  to  take  proportionate 
rebalancing measures if the initial safeguard measures were to disturb 
the balance of rights and obligations under the Agreement. 
In Articles  1, 2 and  3 of the proposed  Regulation  the modalities for 
determining a Community position in either case are laid down. 

In  the  area  of  competition,  both  the  Commission  and  the  EFTA 
Surveillance Authority  (ESA) have clearly described surveillance tasks 
under the EEA Agreement. 
Article  4 of the proposed  Regulation  ensures  that the  Commission has 
equivalent powers under the EEA Agreement as  it has  under the Treaty 
of Rome.  Article  5 stipulates  how Member  States  shall  be associated 
with the surveillance tasks of the Commission and the ESA, as had been 
agreed previously in an internal declaration by the Commission and the 
Member states. 

s 

7. 

8. 

For  the  implementation  of  the  EEA  Agreement  as  regards  financial 
Services, the EFTA States have been grated  the right to be consulted 
in the context of meetings of the Banking  advisory  committee and the 
Insurance Committee. 
Article  5 of the proposed Regulation determines that the chairman of 
both  committees  and  the  vice-chairman  of  the  Banking  advisory 
committee shall be associated with these consultations. 

The  EEA  Agreement  includes  a  financial  mechanism  which  will  be 
financed  by  the  EFTA States.  The  EC Member  States  who will  benefit 
from  loans  and  grants  from  this  fund  have  been  determined  in  the 
Agreement. 
"Article 7 of the Regulation lays down the modalities for distribution 
of funds between the beneficiary countries, on the understanding that 
the  allocation  of  these  funds  is  specifier to  the  EEA  and  does  not 
prejudice in any way the criteria applicable to Community Funds." 

9. 

Finally, Articles  8 and  9 of  the  proposed  regulation  determine  that 
Member  States  are  obliged  to  take  all  necessary  measures  for  the 
implementation of the Agreement and synchronize the application of the 
Regulation with the EEA Agreement itself. 

10.  From this last article and from the timetable for the entry into force 
of the EEA Agreement it is clear that the present regulation has be to 
adopted by the council urgently. 

V 

Proposal for a Council Regulation  (EEC) No .. 
of ... 
concerning arrangements for implementing 
the Agreement on the European Economic Area 

The council of the European communities, 

Having  regard  to the  Treaty  establishing  the  European  Economic  Community, 
and in particular Article 113 and 235 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

whereas  an  Agreement  on  the  European  Economic  Area  between  the  European 
Economic  Community, the European  Coal and Steel Community  and their Member 
States,  on  the  one  hand,  and  the  EFTA  States,  on  the  other,  hereinafter 
referred to as "the EEA Agreement", was signed in Oporto on 2 May 1992; 

Whereas  it  is  necessary  to  establish  the  arrangements  for  implementing 
various provisions of the EEA Agreement; 

Whereas  it is necessary  to lay down the procedures  for putting  into effect 
the  safeguard  clauses  provided  for  in  Articles 112  and  114  of  that 
Agreement; 

Whereas  implementing  rules  must  also  be  provided  for  in  the  field  of 
competition  to  enable  the  principles  governing  the  application  of 
competition law, on the basis of Articles 85 and 86 of the EEC Treaty, to be 
applied mutatis mutandis to the EEA; 

_r 

Whereas,  given  the  nature  of  the  Banking  Advisory  Committee  and  the 
Insurance Committee, specific rules should be laid down for consulting them; 

Whereas,  in  accordance  with  the  EEA  Agreement,  a  Financial  Mechanism  has 
been established by the EFTA States; whereas it is necessary to lay down the 
method  for  determining  the  allocation  of  grants  and  interest  rebates  on 
loans to each recipient Member  State in accordance with Protocol 38 of the 
EEA Agreement; whereas this allocation is specific to the EEA framework and 
the criteria chosen in no way prejudice the criteria applicable to Community 
Funds; 

Whereas the Agreements concluded by the Community bind its institutions and 
its  Member  States;  whereas  the  latter  must  therefore  take  any  measures 
necessary  to enable  the  Community  to  fulfil  its obligations  under  the EEA 
Agreement; 

Whereas  it  is  necessary  to adopt  implementing  measures  to achieve,  in the 
functioning of the single market, one of the goals of the Community; whereas 
the Treaty has not provided for the powers required for this purpose, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

where  a  Member  state  requests  the  Commission  to  apply  safeguard 
measures as provided  for in Articles 112 or  114 of the Agreement, it 
shall  provide  the  Commission,  in  support  of  its  request,  with  the 
information needed to justify it. 

If the  Commission  decides  not  to apply  safeguard  measures, it shall 
inform  the  Council  and  the  Member  States  accordingly  within  five 
working days of receipt of the request from the Member State. 

Any  Member  State  may  refer  this  decision  of  the  Commission  to  the 
Council within ten working days of its notification. 

If  the  Council,  acting  by  a  qualified  majority,  indicates  its 
intention  to adopt a different  decision, the commission shall inform 
the EFTA States thereof forthwith and shall notify them of the opening 
of  consultations  within  the  Joint  Committee  as  provided  for  in 
Article 113 of the Agreement. 

The  Council,  acting  by  a  qualified  majority,  may  take  a  different 
decision  within  twenty  working  days  of  the  conclusion  of  the 
consultations with the EFTA States within the Joint Committee. 

2. 

The Commission shall be assisted by a committee  (hereinafter referred 
to  as  the  "Committee")  composed  of  representatives  of  the  Member 
States and chaired by a representative of the Commission. 

The  Committee  shall meet  when  convened  by  its  chairman. The  latter 
shall communicate any appropriate information to the Member States at 
the earliest opportunity. 

3. 

Where  the  Commission, on  its  own  initiative  or  at  the  request  of a 
Member  state,  decides  that  the  safeguard  measures  provided  for  in 
Articles 112 or 114 of the Agreement should be applied: 

it shall inform the Member  States forthwith  if acting on its own 
initiative  or, if  it  is responding  to  a Member  State's request, 
within five working days of receipt of that request, 

1 

it shall consult the Committee, 

-  at the  same time it  shall  inform  the EFTA States  and notify the 
Joint committee of the opening of consultations as referred to in 
Article 113 of the Agreement, 

at the same time it shall provide the Joint Committee with all the 
information necessary for these consultations. 

4. 

In any  event, the  consultations  within  the  Joint  Committee  shall be 
deemed to be completed thirty days after the notification referred to 
in the fourth subparagraph of paragraph 1 and in paragraph 3. 

At the end of the consultations or on expiry of the period of thirty 
days,  and  if  no  other  arrangement  proves  possible,  the  commission, 
after  consulting  the  Committee,  may  take  appropriate  measures  to 
implement Articles 112 and 114 of the Agreement. 

5. 

The decision referred to in paragraph 4 shall be notified forthwith to 
the Council, the Member States and the EFTA States; it shall also be 
notified to the Joint Committee. 

The decision shall be immediately applicable. 

6. 

7. 

Any  Member  State  may  refer  the  Commission  decision, referred  to  in 
paragraph 4  to  the  Council  within  ten  working  days  of  receiving 
notification of the decision. 

If the Commission  has not taken a decision within the meaning of the 
second subparagraph of paragraph 4 within ten working days of the end 
of the consultations with the Joint committee or, as the case may be, 
the end  of the period  of  thirty  days referred  to  in that paragraph, 
any  Member  state which  has  referred  the matter  to  the  commission in 
accordance with paragraph 3 may refer it to the Council. 

y 

8. 

In the cases referred to in paragraphs 6 and 7 the Council, acting by 
a  qualified  majority,  may  adopt  a  different  decision  within  two 
months. 

Article 2 

1. 

2. 

Where  exceptional  circumstances  arise  within  the  meaning  of 
Article 113(3)  of  the  Agreement,  the  Commission  may  take  immediate 
safeguard measures in the cases referred to in Articles  112 and 114 of 
the Agreement. 

If  the  Commission  receives  a  request  from  a  Member  State,  it  shall 
take  a  decision  thereon  within  five  working  days  of  receipt  of  the 
request. 

The Commission  shall notify the Council and the Member  States of its 
decision. 

3. 

Any Member state may refer the Commission's decision to the Council in 
accordance with the procedure provided for in Article 2(6). 

The  procedure  provided  for  in  Article 2(7)  and  (8)  shall  be 
applicable. 

If  the  Commission  has  not  taken  a  decision  within  the  time  limit 
mentioned  in  paragraph 2,  any  Member  State  which  has  referred  the 
matter  to  the  Commission  may  refer  it  to  the  Council  in  accordance 
with the procedures laid down in the first and second subparagraphs of 
this paragraph. 

Article 3 

By way of derogation from Articles 1 and 2, if the circumstances demand that 
measures  are  taken  concerning  agricultural  products  on  the  basis  of 
Article 112 of the Agreement or on the basis of provisions in the Protocols 
or Annexes covering  these products, such measures  shall be taken  according 
to procedures provided  for by the rules establishing  a common  organization 

9 

of  the  agricultural  markets,  or  in  specific  provisions  adopted  under 
Article 235 of the EEC Treaty and applicable to products resulting  from the 
processing  of  agricultural  products,  provided  that  the  conditions 
established under Article 113 of the Agreement are met. 

Article 4 

1. 

2. 

1. 

To enable the principles contained in Articles 1(2)(e) and 53 to 60 of 
the EEA Agreement to be put  into effect, the Community  rules  giving 
effect  to  the  principles  covered  by  Articles 85  and  86  of  the  EEC 
Treaty  and  Council  Regulation  (EEC)  No 4064/89  on  the  control  of 
concentrations between undertakings shall apply mutatis mutandis. This 
shall  also  hold  good  for  all  the  relevant  provisions  which  the 
Community might adopt in the future in the field of competition. 

To  enable  the  principle  contained  in Article 8(4} of  Protocol 23 of 
the EEA Agreement to be put into effect, the Commission shall grant an 
authorization  to  the  representatives  of  the  EFTA  Surveillance 
Authority to enable them to participate in the investigations referred 
to in that provision. 

Article 5 

When  individual  cases  falling  under  Articles 53  and  54  of  the  EEA 
Agreement  are  referred  to  the  EFTA  Surveillance  Authority  in 
accordance with Article 56 of the EEA Agreement, the Commission shall 
carry  out  those  tasks  entrusted  to  it  by  Protocol 23  in  close  and 
permanent liaison with the competent authorities of the Member States. 

lo 

2. 

3. 

In particular, it shall  forward to the Member States, without delay, 
the  notifications,  information  and  other  documents  forwarded  by  the 
EFTA Surveillance Authority  in accordance with Articles 2, 3, 4, 6, 7 
and 8 of Protocol 23. 

Should the Member States wish  to present  formal written  observations 
in  particular  individual  cases  dealt  with  by  the  EFTA  Surveillance 
Authority,  those  observations  shall  be  forwarded  to  the  Commission, 
which  will  lend  its  good  offices  to  find  a  commonly  acceptable 
solution  at  Community  level  reflecting  the  unanimous  opinion  of  the 
Member States which have forwarded observations. 

The  Commission  shall  present  the  Community  position,  once  it  is 
defined, to the EFTA Surveillance Authority. 

If  no  such  position  has  been  established  within  thirty  days  of  the 
date referred to in Article 2 of Protocol 23, the observations of the 
Member  states and  the  Commission  shall be  forwarded  together  by the 
Commission to the EFTA Surveillance Authority. 

4. 

Notwithstanding  the  application  of  paragraph 3,  Member  States  may 
participate  in meetings  of the EFTA Advisory  Committee  in accordance 
with Protocol 23. 

Article 6 

If,  in  order  to  ensure  that  the  Agreement  functions  properly,  the  EFTA 
States are consulted on draft measures which the Commission proposes to take 
when  exercising  its  executive  powers,  in  spheres  in  which  the  Banking 
Advisory Committee and the Insurance Committee are competent, the Chair and 
Vice-Chair of those Committees shall be associated with such consultation. 

-M 

Article 7 

1. 

2. 

3. 

Pursuant  to  Article 4.1  of  Protocol 38  of  the  EEA  Agreement,  the 
Commission  shall determine, on behalf  of the Community, the  share of 
each beneficiary  region  in the overall  level of  financial  assistance 
from  the  Financial  Mechanism  provided  for  in  Part  VIII  of  the  EEA 
Agreement.  These shares shall be determined for a five-year period in 
the  light  of  the  beneficiary  regions•  relative  level  of  economic 
development and population size and of other relevant factors. 

The  Commission  shall  communicate  its  decision  to  the  Council  and 
thereafter  to the EFTA States and to the European  Investment Bank at 
the  earliest  opportunity  after  the  adoption  by  the  Council  of  this 
Regulation. 

The annual commitments  in individual  regions  shall take  into account 
the rate at which projects are presented for financing, as well as the 
total  annual  commitments  provided  under  Protocol  38  of  the  EEA 
Agreement.  The Commission  shall make the necessary arrangements with 
the EIB and the EFTA Financial Mechanism Committee to ensure that the 
annual  commitments  to  individual  regions  do  not  prejudice  the five-
year shares as determined under paragraph 1 above. 

Article 8 

The  Member  States  shall  take  any  measures  necessary  to  ensure  that 
obligations deriving from the EEA Agreement for the Community are fulfilled. 

Article 9 

This  Regulation  shall  enter  into  force  on  the  day  that  the  EEA  Agreement 
enters into force. 

This Regulation shall be binding in its entirety  and directly applicable in 
all Member States. 

Done at Brussels, 

For the Council 
The President 

ISSN 0254-1475 

COM(92) 495 final 

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