1999/349/EC: Commission Decision of 14 October 1998 concerning the application by Italy of the aid scheme provided for by Law No 1329/65 (Legge Sabatini) for the processing and marketing of agricultural products (notified under document number C(1998) 3213) (Only the Italian text is authentic)
Date: 1998-10-14
Institutions: European Commission
Subjects: Italy, State aid, agricultural product, agro-industry, aid to industry, marketing

28. 5. 1999

EN

Official Journal of the European Communities

L 133/57

COMMISSION

COMMISSION DECISION

of 14 October 1998

concerning the application by Italy of the aid scheme provided for by Law No
1329/65 (Legge Sabatini) for the processing and marketing of agricultural
products

(notified under document number C(1998) 3213)

(Only the Italian text is authentic)

(1999/349/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of
Article 93(2) thereof,

Having given notice to the parties concerned to submit
their comments in accordance with the above Article (1),

Whereas:

I. PROCEDURE

(1)

(2)

(3)

By letter dated 12 September 1997,
the Italian
Permanent Representative to the European Union,
in accordance with Article 93(3) of
the Treaty,
forwarded to the Commission the text of Article
12(1) and (4) of Law No 266 of 7 August 1997 on
refinancing the aid referred to in law No 1329 of
28 November 1965 (the ‘Legge Sebatini').

this notice covers only the
As indicated above,
application of the provisions in question to the
processing and marketing of agricultural products.

By letter dated 17 February 1998, the Commission
notified the Italian authorities of its decision to
open the procedure provided for by Article 93(2) of
the Treaty with respect to the application of the aid
measures referred to in Law No 1329/65 in the
sector concerned.

(1) OJ C 100, 2.4.1998, p. 17.

(5)

(6)

(7)

(8)

The decision to open the procedure was published
in the Official
the European
Journal
Communities. The Commission gave notice to the
other Member States and interested parties
to
submit their comments on the aid.

of

The Commission received no comments from the
other Member States or interested parties.

The Italian authorities submitted comments by
letter dated 2 April 1998. By letter dated 8
September 1998, the Commission asked for further
details which were supplied by letter dated 16
September 1998.

II. DESCRIPTION OF THE AID AND THE
COMMISSION

REASONS WHY

THE

DECIDED TO OPEN THE PROCEDURE

Law No 1329/65 (the refinancing of which is the
subject of this Decision) provides for aid for invest-
ment in the purchase of machinery and technical
equipment.

The aid is granted for hire purchase of machinery
and equipment and consists of
reductions on
interest rates for discounting bills of exchange
signed by the purchaser in favour of the seller. The
the difference between the net
aid consists of
receipt calculated at the reference discount rate
valid on the day discounting takes place and the
net receipt calculated at the reduced discount rate.

L 133/58

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Official Journal of the European Communities

28. 5. 1999

(9)

The aid is paid to the purchaser, either directly by
the seller at the moment the hire purchase opera-
tion takes place (in the form of a discount on the
price of the goods) or through the bank which
discounts the bill of exchange presented by the
seller (in the form of an ex-post subsidy).

(17)

(10)

The reduction may not exceed:

(11)

(12)

(13)

(14)

(15)

(16)

(cid:190) 85 % of the reference discount rate, up to a
maximum of eight percentage points,
for
investments relating to installations in Objec-
tive 1 regions,

(cid:190) 50 % of the reference discount rate, up to a
maximum of five percentage points, for other
regions.

The eligible cost for each operation (a maximum of
ITL 3 000 million or ITL 4 500 million where the
same undertaking carries out several operations in
the same year) is represented by the capital to be
(the
repaid and the interest on that payment
interest rate may not exceed the reference rate).
Repayments must be made within five years.

the aid
The gross subsidy equivalent
cannot be calculated on the basis of the above.

(GSE) of

The aid must be assessed in the light of the guide-
lines for State aid in connection with investments
in the processing and marketing of agricultural
products (1).

Those guidelines lay down that State aid granted
for the investments referred to in the second and
third indents of point 1.2 of
the Annex to
Commission Decision 94/173/EC (2) or excluded
unconditionally in point 2 of that Decision may
not be considered compatible with the common
market.

The intensity of the aid may not exceed 55 % of
(75 % in Objective 1
the eligible investment
regions).

Since the Italian authorities have given no assur-
ance that the aid complied with the sectoral limits
laid down in Decision 94/173/EC or with the
above intensities, the Commission took the view
that the aid measure was incompatible with the
common market since the aid might be granted for
investments excluded under the guidelines for State
aid in connection with investments
in the
processing and marketing of agricultural products
and the information available did not permit veri-
fication of whether the limits laid down in the
guidelines were respected.

(18)

(19)

(20)

III. COMMENTS SUBMITTED BY THE ITALIAN

AUTHORITIES

the

By letters dated 2 April 1998 and 16 September
the
1998,
following details and made the following undertak-
ings:

Italian authorities

submitted

(a) the intensity of the aid, expressed as GSE, does
not exceed 17 % in Objective 1 regions and
9,5 % in other regions;

(b) compliance with the sectoral limits laid down
in the Annex to Decision 94/173/EC will be
ensured by the application, also under Law No
1329/65, of the criteria used under Law No
488/92. This latter Law was their subject of the
final Commission Decision of 22 July 1998 (3),
which confirmed the
compatibility, under
certain conditions, of investment aid provided
for in that Law with the Community guidelines
for State aid in connection with investments in
the processing and marketing of agricultural
products
and therefore with the common
market. The Italian authorities have given
assurances that the conditions referred to in the
Decision of 22 July 1998 will be respected
when the measures provided for in Law No
1329/65 are applied in the sector concerned.

IV. CONCLUSIONS

The assurances given by the Italian authorities in
their letters dated 2 April 1998 and 16 September
1998 clear the doubts which led the Commission
to open the procedure provided for in Article 93(2)
of the Treaty with respect to the aid in question.

The investment aid referred to in Law No 1329/65
may be considered to comply, under the conditions
referred to in point 17 of this Decision, with the
Community guidelines for State aid in connection
with investments in the processing and marketing
of agricultural products. The aid may therefore
benefit from the derogation provided for in Article
92(3)(c) of the Treaty.

the above Community guidelines,

In application of the second subparagraph of point
3(b) of
the
Commission will ask the Italian Government to
submit an annual report giving details of any grant
of aid during the year and, in particular, containing
all
the
Commission to conclude, without recourse to addi-
tional enquiry, that aid is indeed granted in accord-
ance with each of the conditions referred to in
point 2 of the Annex to Decision 94/173/EC,

information necessary to enable

the

(1) OJ C 29, 2.2.1996, p. 4.
(2) OJ L 79, 23.3.1994, p. 29.

(3) C(1998) 2407 final, not yet published.

28. 5. 1999

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Official Journal of the European Communities

L 133/59

HAS ADOPTED THIS DECISION:

Article 1

The application with regard to the processing and
marketing of agricultural products of the investment aid
scheme provided for by Law No 1329 of 28 November
1965 is compatible with the common market under the
following conditions:

(a) the intensity of the aid, expressed as gross subsidy
equivalent (GSE), does not exceed 17 % in Objective
1 regions and 9,5 % in other regions;

(b) the sectoral limits laid down in the Annex to Decision
94/173/EC, as referred to in the implementing provi-
sions for Law No 488 of 19 December 1992, as
amended in accordance with the Commission
Decision of 22 July 1998, are respected.

The Italian Government shall notify the Commission of
the provisions adopted to comply with the above condi-
tions within fifteen days of their adoption.

Article 3

The Italian Government shall submit to the Commission
an annual report giving details of any grant of aid during
the year and, in particular, containing all the information
necessary to enable the Commission to conclude, without
recourse to additional enquiry, that each of the conditions
referred to in point 2 of the Annex to Decision 94/
173/EC has been met.

Article 3

This Decision is addressed to the Italian Republic.

Article 2

Done at Brussels, 14 October 1998.

Before implementing the scheme referred to in Article 1
with respect to the processing and marketing of agricul-
tural products, the Italian Government shall amend its
implementing provisions in order to comply with the
conditions set out in that Article.

For the Commission

Franz FISCHLER

Member of the Commission