Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid
Date: 1998-05-07
Institutions: Council of the European Union
Subjects: EU Member State, European Commission, State aid, aid system, application of EU law

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(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 994/98

of 7 May 1998

on the application of Articles 92 and 93 of the Treaty establishing the European
Community to certain categories of horizontal State aid

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 94 thereof,

Having regard to the proposal from the Commission (1),

After consulting the European Parliament (2),

Having regard to the opinion of the Economic and Social
Committee (3),

(1) Whereas, pursuant to Article 94 of the Treaty, the
Council may make any appropriate regulations for
the application of Articles 92 and 93 and may, in
particular, determine the conditions
in which
Article 93(3) shall apply and the categories of aid
exempted from this procedure;

(2) Whereas, under

the assessment of
compatibility of aid with the common market
essentially rests with the Commission;

the Treaty,

(3) Whereas the proper functioning of the internal
market requires strict and efficient application of
the rules of competition with regard to State aids;

(4) Whereas the Commission has applied Articles 92
and 93 of the Treaty in numerous decisions and
has also stated its policy in a number of communi-
cations; whereas, in the light of the Commission’s
considerable experience in applying Articles 92
and 93 of the Treaty and the general texts issued by
the Commission on the basis of those provisions, it
is appropriate, with a view to ensuring efficient
supervision
administration,
without weakening Commission monitoring, that

simplifying

and

the Commission should be enabled to declare by
means of regulations, in areas where the Commis-
sion has sufficient experience to define general
compatibility criteria, that certain categories of aid
are compatible with the common market pursuant
to one or more of the provisions of Article 92(2)
and (3) of the Treaty and are exempted from the
procedure provided for in Article 93(3) thereof;

(5) Whereas group exemption regulations will increase
transparency and legal certainty; whereas they can
be directly applied by national courts, without
prejudice to Articles 5 and 177 of the Treaty;

(6) Whereas it is appropriate that the Commission,
when it adopts regulations exempting categories of
aid from the obligation to notify provided for in
Article 93(3) of the Treaty, specifies the purpose of
the aid, the categories of beneficiaries and thresh-
the conditions
olds limiting the exempted aid,
governing the cumulation of aid and the conditions
of monitoring, in order to ensure the compatibility
with the common market of aid covered by this
Regulation;

(7) Whereas it is appropriate to enable the Commis-
sion, when it adopts regulations exempting certain
categories of aid from the obligation to notify in
Article 93(3) of the Treaty, to attach further detailed
conditions in order to ensure the compatibility
with the common market of aid covered by this
Regulation;

(1) OJ C 262, 28. 8. 1997, p. 6.
(2) OJ C 138, 4. 5. 1998.
(3) OJ C 129, 27. 4. 1998, p. 70.

(8) Whereas it may be useful to set thresholds of other
appropriate conditions requiring the notification of
awards of aid in order to allow the Commission to

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examine individually the effect of certain aid on
competition and trade between Member States and
its compatibility with the common market;

HAS ADOPTED THIS REGULATION:

(9) Whereas the Commission, having regard to the
development and the functioning of the common
market, should be enabled to establish by means of
a regulation that certain aid does not fullfil all the
criteria of Article 92(1) of the Treaty and is there-
fore exempted from the notification procedure laid
down in Article 93(3), provided that aid granted to
the same undertaking over a given period of time
does not exceed a certain fixed amount;

(10) Whereas in accordance with Article 93(1) of the
Treaty the Commission is under an obligation, in
cooperation with Member States, to keep under
constant review all systems of existing aid; whereas
for this purpose and in order to ensure the largest
possible degree of
transparency and adequate
control it is desirable that the Commission ensures
the establishment of a reliable system of recording
and storing information about the application of
the regulations it adopts,
to which all Member
States have access, and that it receives all necessary
information from the Member States on the imple-
mentation of aid exempted from notification to
fulfil this obligation, which may be examined and
evaluated with the Member States within the
Advisory Committee; whereas for this purpose it is
also desirable that the Commission may require
such information to be supplied as is necessary to
ensure the efficiency of such review;

(11) Whereas the control of the granting of aid involves
factual,
legal and economic issues of a very
complex nature and great variety in a constantly
evolving environment; whereas the Commission
should therefore regularly review the categories of
aid which should be exempted from notification;
whereas the Commission should be able to repeal
or amend regulations it has adopted pursuant to
this Regulation where circumstances have changed
with respect
to any important element which
constituted grounds for their adoption or where the
progressive development or the functioning of the
common market so requires;

Article 1

Group exemptions

The Commission may, by means of

1.
regulations
adopted in accordance with the procedures laid down in
this Regulation and in accordance with
Article 8 of
Article 92 of the Treaty, declare that the following categ-
ories of aid should be compatible with the common
market and shall not be subject
to the notification
requirements of Article 93(3) of the Treaty:

(a) aid in favour of:

(i) small and medium-sized enterprises;

(ii) research and development;

(iii) environmental protection;

(iv) employment and training;

(b) aid that complies with the map approved by the
Commission for each Member State for the grant of
regional aid.

The Regulations referred to in paragraph 1 shall

2.
specify for each category of aid:

(a)

the purpose of the aid;

(b) the categories of beneficiaries;

(c) thresholds expressed either in terms of aid intensities
in relation to a set of eligible costs or in terms of
maximum aid amounts;

(d) the conditions governing the cumulation of aid;

(e) the conditions of monitoring as specified in Article 3.

In addition, the regulations referred to in paragraph

3.
1 may, in particular:

(a) set thresholds or other conditions for the notification

of awards of individual aid;

(b) exclude certain sectors from their scope;

(c) attach further conditions for the compatibility of aid

exempted under such regulations.

Article 2

De minimis

(12) Whereas the Commission, in close and constant
liaison with the Member States, should be able to
define precisely the scope of these regulations and
the conditions attached to them; whereas, in order
to provide for cooperation between the Commis-
sion and the competent authorities of the Member
is appropriate to set up an advisory
States,
committee on State aid to be consulted before the
Commission adopts regulations pursuant to this
Regulation,

it

The Commission may, by means of a Regulation
1.
adopted in accordance with the procedure laid down in
Article 8 of this Regulation, decide that, having regard to
the development and functioning of the common market,
certain aids do not meet all the criteria of Article 92(1)
and that they are therefore exempted from the notifica-
tion procedure provided for in Article 93(3), provided that
aid granted to the same undertaking over a given period
of time does not exceed a certain fixed amount.

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2. At the Commission’s request, Member States shall, at
any time, communicate to it any additional information
relating to aid exempted under paragraph 1.

3. Regulations adopted pursuant to Articles 1 and 2
shall provide for a period as referred to in paragraph 2,
should their application not be extended when they
expire.

Article 3

Transparency and monitoring

1. When adopting regulations pursuant to Article 1, the
Commission shall impose detailed rules upon Member
States to ensure transparency and monitoring of the aid
exempted from notification in accordance with those
regulations. Such rules shall consist, in particular, of the
requirements laid down in paragraphs 2, 3 and 4.

2. On implementation of aid systems or individual aids
granted outside any system, which have been exempted
pursuant to such regulations, Member States shall forward
to the Commission, with a view to publication in the
Official Journal of the European Communities, sum-
maries of the information regarding such systems of aid
or such individual aids as are not covered by exempted
aid systems.

the
3. Member States shall record and compile all
the group
information regarding the application of
exemptions. If the Commission has information which
leads it to doubt that an exemption regulation is being
applied properly, the Member States shall forward to it
any information it considers necessary to assess whether
an aid complies with that regulation.

4. At least once a year, Member States shall supply the
Commission with a report on the application of group
exemptions,
in accordance with the Commission’s
specific requirements, preferably in computerised form.
The Commission shall make access to those reports avail-
able to all the Member States. The Advisory Committee
referred to in Article 7 shall examine and evaluate those
reports once a year.

Article 4

Period of validity and amendment of regulations

1. Regulations adopted pursuant to Articles 1 and 2
shall apply for a specific period. Aid exempted by a
regulation adopted pursuant to Articles 1 and 2 shall be
exempted for the period of validity of that regulation and
for the adjustment period provided for in paragraphs 2
and 3.

2. Regulations adopted pursuant to Articles 1 and 2
may be repeated or amended where circumstances have
changed with respect
that
their adoption or where the
constituted grounds for
the
the functioning of
progressive development or
common market so requires. In that case the new regula-
tion shall set a period of adjustment of six months for the
adjustment of aid covered by the previous regulation.

to any important element

Article 5

Evaluation report

Every five years the Commission shall submit a report to
the European Parliament and to the Council on the
application of this Regulation. It shall submit a draft
report
for consideration by the Advisory Committee
referred to in Article 7.

Article 6

Hearing of interested parties

thereof

Where the Commission intends to adopt a regulation, it
shall publish a draft
interested
persons and organisations to submit their comments to it
within a reasonable time limit
to be fixed by the
Commission and which may not under any circumstances
be less than one month.

to enable all

Article 7

Advisory committee

An advisory committee, hereinafter referred to as the
Advisory Committee on State Aid, shall be set up. It shall
be composed of representatives of the Member States and
chaired by the representative of the Commission.

Article 8

Consultation of the Advisory Committee

The Commission shall

1.
Committee on State Aid:

consult

the Advisory

(a) before publishing any draft regulation;

(b) before adopting any regulation.

2. Consultation of the Committee shall take place at a
meeting called by the Commission. The drafts and docu-
ments to be examined shall be annexed to the notifica-
tion. The meeting shall take place no earlier than two
months after notification has been sent.

This period may be reduced in the case of the consulta-
tions referred to in paragraph 1(b), when urgent or for
simple extension of a regulation.

3.
The representative of the Commission shall submit
to the Committee a draft of the measures to be taken. The
Committee shall deliver its opinion on the draft, within a
time limit which the Chairman may lay down according
to the urgency of the matter, if necessary by taking a vote.

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The opinion shall be recorded in the minutes; in
4.
addition, each Member State shall have the right to ask to
have its position recorded in the minutes. The Advisory
Committee may recommend publication of the opinion
in the Official Journal of the European Communities.

5.
The Commission shall take the utmost account of
the opinion delivered by the Committee. It shall inform
the Committee of the manner in which its opinion has
been taken into account.

Article 9

Final provisions

This Regulation shall enter
into force on the day
following its publication in the Official Journal of the
European Communities.

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

Done at Brussels, 7 May 1998.

For the Council

The President

M. BECKETT