Decision No 1/98 of the Association Council between the European Communities and their Member States, of the one part, and the Czech Republic, of the other part of 24 June 1998 adopting the implementing rules for the application of the provisions on State aid referred to in Article 64(1)(iii) and Article 64(2) pursuant to Article 64(3) of the Europe Agreement establishing an association between the European Communities and their Member States, on the one part, and the Czech Republic, on the other part, and in Article 8(1)(iii) and Article 8(2) of Protocol 2 on ECSC products to that Agreement
Date: 1998-06-24
Institutions: EC–Czech Republic Association Council
Subjects: Czechia, ECSC, State aid, agreement (EU), association agreement (EU), control of State aid

11. 7. 98

‹

EN

‹

Official Journal of the European Communities

L 195/21

II

(Acts whose publication is not obligatory)

COUNCIL

DECISION No 1/98 OF THE ASSOCIATION COUNCIL

between the European Communities and their Member States, of the one part,
and the Czech Republic, of the other part

of 24 June 1998

adopting the implementing rules for the application of the provisions on State
aid referred to in Article 64(1)(iii) and Article 64(2) pursuant to Article 64(3) of the
Europe Agreement establishing an association between the European Commu-
nities and their Member States, of the one part, and the Czech Republic, of the
other part, and in Article 8(1)(iii) and Article 8(2) of Protocol 2 on ECSC products
to that Agreement

(98/440/EC, ECSC)

THE ASSOCIATION COUNCIL,

Having regard to the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Czech Republic, of the
other part, and in particular Article 64(3) thereof,

Having regard to Protocol 2 on ECSC products to the 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 it is recalled that in accordance with Article 64(2) of the Europe Agreement, the
concept of ‘public aid’ as contained in Article 64(1)(iii) of the Europe Agreement is to be
assessed on the basis of 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 and the Czech Republic
(State aid);

Whereas the Czech 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 Czech Republic and will give an
opinion as to their compatibility with Article 64(1)(iii) and Article 64(2) of the Europe
Agreement, and Article 8(1)(iii) and Article 8(2) and (4) of Protocol 2 on ECSC products to
the Europe Agreement;

L 195/22

‹

EN

‹

Official Journal of the European Communities

11. 7. 98

Whereas the Czech Republic will, when providing for the necessary rules to ensure ef-
fective 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 Commission of the European Communities will, under the relevant Com-
munity programmes, assist the monitoring authority by providing for documentation,
training, study tours and other relevant technical assistance,

HAS DECIDED AS FOLLOWS:

Sole Article

The implementing rules for the application of the provisions on State aid referred to in
Article 64(1)(iii) and Article 64(2) pursuant to Article 64(3) of the Europe Agreement es-
tablishing an association between the European Communities and their Member States, of
the one part, and the Czech Republic of the other part, and in Article 8(1)(iii) and Article
8(2) of Protocol 2 on ECSC products to that Agreement as set out in the Annex to this
Decision, are hereby adopted.

Done at Brussels, 24 June 1998.

For the Association Council

The President

J. S (cid:7)EDIV (cid:1)Y

11. 7. 98

‹

EN

‹

Official Journal of the European Communities

L 195/23

ANNEX

Implementing Rules for the application of the provisions on State aid referred to in Article
64(1)(iii) and Article 64(2) pursuant to Article 64(3) of the Europe Agreement establishing an
association between the European Communities and their Member States, of the one part,
and the Czech Republic, of the other part, and in Article 8(1)(iii) and Article 8(2) of Protocol
2 on ECSC products to that Agreement

SURVEILLANCE OF STATE AND AID BY MONITORING
AUTHORITIES

Article 3

De minimis aid

Article 1

Surveillance of State aid by monitoring authorities

Subject to the procedural rules in force in th European Com-
munity (‘the Community’) and the Czech 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 Community and the Czech Republic, respect-
ively. The monitoring authority in the Community shall be the
Commission of the European Communities (‘the Commission’),
and in the Czech Republic the Ministry of Finance.

GUIDANCE FOR DEALING WITH CASES

Article 2

Criteria for compatibility

1.
The assessment of compatibility of individual aid awards
and programmes with the Europe Agreement, as provided for in
Article 1 of these Rules, shall be made on the basis of the criteria
arising from the application of the rules of Article 92 of the
including the
Treaty establishing the European Community,
present and future secondary legislation, frameworks, guidelines
and other relevant administrtive acts in force in the Community,
as well as the case-law of the Court of First Instance and the
Court of Justice of the European Communities and the special
guidance to be developed pursuant to Article 4(3).

2.
The monitoring authority of the Czech Republic shall be
informed of any acts relating to the adoption, abolition or mod-
ification of the Community criteria of compatibility referred to
in paragraph 1, insofar as these are not published but are speci-
fically brought to the attention of all Member States.

3. Where such changes do not encounter objections from the
Czech Republic within three months, they shall become criteria
of compatibility as provided for in paragraph 1 of this Article.
Where such changes encounter objections from the Czech Re-
public and having regard to the approximation of legislation as
provided for in the Europe Agreement, consultations shall take
place in the Association Committee, in accordance with Article 7
of these Rules.

The same principles shall apply in respect of other signi-

4.
ficant changes in Community policy on State aids.

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 shall therefore not be treated under these
Rules. This Article does not apply to the industries covered by
the Treaty establishing the European Coal and Steel Community,
to shipbuilding, to transport nor to aid towards expenditure in
connection with agriculture or fisheries.

Article 4

Derogations

1.
In accordance with and within the limits of Article 64(4)(a)
of the Europe Agreement, the Czech Republic shall be regarded
as an area identical to those areas of the Community referred to
in Article 92(3)(a) of
the Treaty establishing the European
Community.

The monitoring authorities

2.
jointly evaluate the
maximum aid intensities and specific regional coverage of areas
eligible for national regional aid. They shall submit a joint
proposal to the Association Committee which shall establish a
decision to this effect.

shall

3.
the
The Commission and the monitoring authority of
Czech Republic shall also evaluate whether, in addition to the
they can provide
types of aid allowed in the Community,
guidance on the compatibility of aid designed to combat the
specific problems of the Czech Republic as it undergoes transi-
tion to a market economy.

PROCEDURES FOR CONSULTATION AND PROBLEM
SOLVING

Article 5

Examination of certain aid

1. Where the amount of the aid in question amounts to over
ECU 3 million, aid programmes or
individual aid awards,
whether or not covered by frameworks and guidelines in the
Community, may be referred by the relevant monitoring au-
thority to the sub-committee on approximation of legislation for
examination. The sub-committee shall submit a report to the
Association Committee which may adopt appropriate decisions
or recommendations concerning the compatibility of the aid
programme or aid award with the Europe Agreement and these
Rules.

L 195/24

‹

EN

‹

Official Journal of the European Communities

11. 7. 98

2.
The principal purpose of such decisions or recommenda-
tions shall be to avoid the resorting to commercial defence
measures as a consequence of the aid in question.

The Association Committee may decide to extend further
3.
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
affect important interests of that Party, it may request informa-
tion about this from the authority responsible. In any event, both
monitoring authorities
to keep each other
shall endeavour
informed of important developments that any be of pratical in-
terest for the other.

Article 7

Consultation and comity

1. Whenever the Commission and the monitoring authority of
the Czech Republic consider that the award of State aid on the
territory for which the other authority is responsible is substanti-
ally affecting important interests of the Party, it may request
consultation with the other authority, or it may request that the
other Party’s monitoring authority initiate any appropriate pro-
cedures with a view to taking 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 of
the Europe Agreement.

2.
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.

3. Without prejudice to any of their rights and obligations, the
monitoring authorities
this
Article shall endeavour to find, within three months, a mutually
acceptable solution in the light of the respective important in-
terests involved.

involved in consultations under

Article 8

Problem solving

1. Where consultations under Article 7 do not lead to a mutu-
ally acceptable solution, an exchange of views shall take place
within the sub-committee on approximation of legislation es-
tablished 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
2.
the matter may be
the period referred to in paragraph 1,
submitted to the Association Committee which may make appro-
priate recommendations for the settlement of these cases.

3.
These procedures shall be without prejudice to any action
under Article 64(6) of the Europe Agreement and Article 8(6) of

Protocol 2 on ECSC products to the Europe Agreement. Trade
instruments should however only be used as a last resort.

Article 9

Secrecy and confidentiality of information

1. With respect 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.

2.
Each monitoring authority agrees to maintain the confid-
entiality of any information provided to it in confidence by the
other authority.

TRANSPARENCY

Article 10

Inventory

1.
Under the relevant Community programmes, the Commis-
sion shall assist the Czech Republic to draw up and thereafter
update an inventory of its aid programmes and individual aid
awards, established on the same basis as in the Community, in
order to ensure and continuously improve transparency.

The Commission shall provide the Czech Republic with
2.
regular information on the documentation it produces with a
similar aim in relation to the Member States of the Community.

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 Com-
munity (ECSC)

The provisions of Article 1, 2, Article 4(3) and Articles 5 to 11 of
these Rules shall apply mutatis mutandis with respect to the
coal and steel sector as referred to in Protocol 2 on ECSC
products to the Europe Agreement.

MISCELLANEOUS

Article 13

Administrative assistance (languages)

The Commission and the monitoring authority of the Czech
Republic shall provide for practical arrangements for mutual
assistance or any other appropriate solution concerning in par-
ticular the question of translations.