Commission Regulation (EC) No 68/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to training aid
Date: 2001-01-12
Institutions: European Commission
Subjects: EU aid, in-service training, professional qualifications, vocational training

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COMMISSION REGULATION (EC) No 68/2001

of 12 January 2001

on the application of Articles 87 and 88 of the EC Treaty to training aid

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

this Regulation, since its contents are replaced by this
Regulation.

Having regard to the Treaty establishing the European
Community,

Having regard to 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 (1), and in particular point (a)(iv) of Article
1(1) thereof,

Having published a draft of this Regulation (2),

Having consulted the Advisory Committee on State Aid,

Whereas:

(1)

(2)

(3)

(4)

Regulation (EC) No 994/98 empowers the Commission
to declare, in accordance with Article 87 of the Treaty,
that under certain conditions training aid is compatible
with the common market and not subject to the noti-
fication requirement of Article 88(3) of the Treaty.

The Commission has applied Articles 87 and 88 of the
Treaty to training aid in numerous decisions and has
also stated its policy, most recently in the Community
framework on training aid (3).
the
Commission's considerable experience in applying those
Articles to training aid, it is appropriate, with a view to
ensuring efficient supervision and simplifying adminis-
tration without weakening Commission monitoring, that
the Commission should make use of
the powers
conferred by Regulation (EC) No 994/98.

In the light of

In order to establish a transparent and coherent policy
for all sectors, it is appropriate that the scope of this
Regulation be as broad as possible and include the agri-
cultural sector, fisheries and aquaculture.

This Regulation is without prejudice to the possibility
for Member States to notify training aid. Such notifica-
tions will be assessed by the Commission in particular in
the light of the criteria set out in this Regulation, or in
accordance with the applicable Community guidelines
and frameworks,
if such guidelines and frameworks
exist. This is currently the case for activities relating to
the production, processing and marketing of products
listed in Annex I to the Treaty and for the sector of
maritime transport. The framework on training aid
should be abolished from the date of entry into force of

(1) OJ L 142, 14.5.1998, p. 1.
(2) OJ C 89, 28.3.2000, p. 8.
(3) OJ C 343, 11.11.1998, p. 10.

(5)

(6)

For reasons of transparency, it should be recalled that in
accordance with the second subparagraph of Article
51(1), of Council Regulation (EC) No 1257/1999 of 17
May 1999 on support for rural development from the
European Agricultural Guidance and Guarantee Fund
(EAGGF) and amending and repealing certain Regula-
tions (4), Articles 87 to 89 of the Treaty do not apply to
financial contributions provided by the Member States
for measures subject to Community support for training
according to Article 9 of the said Regulation.

For reasons of transparency it should be underlined that
this Regulation should only apply to training measures
which constitute State aid within the meaning of Article
87(1) of the Treaty. Many training measures are not
caught by that Article, but constitute general measures
because they are open to all enterprises in all sectors
without discrimination and without discretionary power
for the authorities applying the measure, e.g. general tax
incentive schemes, such as automatic tax credits, open to
all firms investing in employee training. Other training
measures do not fall within the scope of Article 87(1) of
the Treaty because they directly benefit people every-
where and do not grant an advantage to certain enter-
prises or sectors. Examples are: schooling and initial
(such as
training
and day-release
the training or re-training of unemployed
schemes);
including traineeships in enterprises; measures
people,
directly targeted at workers or even at certain categories
of workers, affording them the opportunity of receiving
training unconnected with the firm or industry in which
they work (for example the ‘learning account’). On the
other hand, it should be recalled that contributions from
sectoral funds, if they are made compulsory by the State,
are not considered as private resources, but constitute
State resources within the meaning of Article 87(1) of
the Treaty.

apprenticeships

(7)

This Regulation should exempt any aid that meets all the
relevant requirements of this Regulation, and any aid
scheme, provided that any aid that could be granted
under such scheme meets all the relevant requirements
of this Regulation. With a view to ensuring efficient
supervision and simplifying administration without
weakening Commission monitoring, aid schemes and
individual grants, outside any aid scheme,
should
contain an express reference to this Regulation.

(4) OJ L 160, 26.6.1999, p. 80.

(8)

(9)

(10)

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In order to eliminate differences that might give rise to
distortions of competition, in order to facilitate coordi-
nation between different Community and national initia-
tives concerning small and medium-sized enterprises,
reasons of administrative clarity and legal
and for
‘small and medium-sized
the definition of
certainty,
enterprises’ used in this Regulation should be that laid
down in Commission Recommendation 96/280/EC of 3
April 1996 concerning the definition of small and
medium-sized enterprises (1).

In order to determine whether or not aid is compatible
with the common market pursuant to this Regulation, it
is necessary to take into consideration the aid intensity
and thus the aid amount expressed as a grant equivalent.
Calculation of the grant equivalent of aid payable in
several instalments, and calculation of aid in the form of
a soft loan, require the use of market interest rates
prevailing at
the time of grant. With a view to a
uniform, transparent and simple application of the State
aid rules,
this
Regulation should be deemed to be the reference rates,
in the case of a soft loan, the loan is
provided that,
backed by normal
involve
security and does not
abnormal risk. The reference rates should be those
which are periodically fixed by the Commission on the
basis of objective criteria and published in the Official
Journal of the European Communities and on the Internet.

the market rates for the purposes of

the other hand, which mainly benefits the enterprise,
involves a greater risk of distortion of competition so
that
the intensity of aid which can be considered
compatible and exempted from prior notification should
be much lower.

(13)

(14)

In view of
the handicaps with which SMEs are
confronted and the higher relative costs that they have
to bear when they invest in the training of their workers,
the intensities of aid exempted by this Regulation should
be increased for SMEs.

In assisted areas under Article 87(3)(a) and (c) of the
Treaty, training has a relatively greater external impact,
since there is a substantial underinvestment in training
in those regions and a higher unemployment rate.
Consequently, the intensities of aid exempted by this
Regulation should be increased for those areas.

(15)

The characteristics of training in the maritime transport
sector justify a specific approach for that sector.

improves

firms may draw,

Training usually has positive external effects for society
as a whole since it increases the pool of skilled workers
from which other
the
competitiveness of Community industry and plays an
important role in employment strategy. In view of the
fact that enterprises in the Community generally under-
invest in the training of their workers, State aid might
help to correct this market imperfection and therefore
to be
can be considered under certain conditions
compatible with the common market and therefore
exempted from prior notification.

(11)

In order to ensure that State aid is limited to the
minimum necessary to obtain the Community objective
which market forces alone would not make possible, the
permissible intensities of exempted aid should be modu-
lated according to the type of training provided, the size
of the enterprise and its geographical

location.

(12) General training provides transferable qualifications and
substantially improves the employability of the trained
worker. Aid for this purpose has less distortive effects on
competition, so that higher intensities of aid can be
considered compatible with the common market and
exempted from prior notification. Specific training, on

(1) OJ L 107, 30.4.1996, p. 4.

(16)

(17)

(18)

is appropriate that

It
large amounts of aid remain
subject to an individual assessment by the Commission
before they are put into effect. Accordingly, aid amounts
exceeding a fixed amount, which should be set at
EUR 1 000 000, are excluded from the exemption
provided for in this Regulation and remain subject to the
requirements of Article 88(3) of the Treaty.

This Regulation should not exempt aid cumulated with
including aid granted by national,
other State aid,
regional and local authorities, or with Community assis-
tance, in relation to the same eligible costs when such
cumulation exceeds
fixed in this
Regulation.

thresholds

the

In order to ensure transparency and effective monitoring
in accordance with Article 3 of Regulation (EC) No
994/98, it is appropriate to establish a standard format
in which Member States should provide the Commission
with summary information whenever, in pursuance of
this Regulation, an aid scheme is implemented or an
individual aid outside such schemes is granted, with a
view to publication in the Official Journal of the European
Communities. For the same reasons, it is appropriate to
establish rules concerning the records that Member
States should keep regarding the aid exempted by this
Regulation. For the purposes of the annual reports to be
submitted to the Commission by Member States, it is
appropriate for the Commission to establish its specific
requirements, including, in view of the wide availability
of the necessary technology, information in computer-
ised form.

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(19) Having regard to the Commission's experience and in
particular the frequency with which it is generally neces-
sary to revise State aid policy, it is appropriate to limit
the period of application of this Regulation. Should this
Regulation expire without being extended, aid schemes
already exempted by this Regulation should continue to
be exempted for six months,

the aid. Aid
amount shall be the grant equivalent of
payable in several
instalments shall be discounted to its
value at the time of granting. The interest rate to be used
for discounting purposes and for calculating the aid
amount in a soft loan shall be the reference rate applicable
at the time of grant;

HAS ADOPTED THIS REGULATION:

Article 1

Scope

This Regulation applies to aid in all sectors,
including the
activities relating to the production, processing and marketing
of products listed in Annex I of the Treaty.

Article 2

Definitions

For the purpose of this Regulation:

(a) ‘aid’ shall mean any measure fulfilling all the criteria laid

down in Article 87(1) of the Treaty;

(b) ‘small and medium-sized enterprises’ shall mean enterprises

as defined in Annex I;

(c) ‘large enterprises’ shall mean enterprises not coming under

the definition of SME in Annex I;

(d) ‘specific training’ shall mean training involving tuition
directly and principally applicable to the employee's
present or
future position in the assisted firm and
providing qualifications which are not or only to a limited
extent transferable to other firms or fields of work;

(e) ‘general

training’ shall mean training involving tuition
which is not applicable only or principally to the em-
ployee's present or future position in the assisted firm, but
which provides qualifications that are largely transferable to
other firms or fields of work and thereby substantially
improve the employability of the employee. Training shall
be considered ‘general’

if, for example,

— it is jointly organised by different independent enter-
prises, or if employees of different enterprises may avail
themselves of the training,

— it is recognised, certified or validated by public authori-
ties or bodies or by other bodies or institutions on
which a Member State or the Community has conferred
the necessary powers.

(g) ‘disadvantaged worker’ shall mean:

— any young person under 25 who has not previously

obtained his first regular paid employment,

— any person with serious disabilities which result from
physical, mental or psychological impairments and yet
capable of entering the labour market,

— any migrant worker who moves or has moved within
the Community or becomes resident in the Community
to take up work and who needs professional and/or
language training,

— any person wishing to re-enter working life after a
break of at least three years, and particularly any person
who gave up work on account of the difficulty of
reconciling his working life and family life, for the first
six months after recruitment,

— any person older than 45 who has not attained an
upper secondary educational qualification or its equiva-
lent,

— any long-term unemployed person, i.e. any person who
was without work for 12 consecutive months, for the
first six months after recruitment.

Article 3

Conditions for exemption

1.
Individual aid outside any scheme, fulfilling all the condi-
tions of this Regulation, shall be compatible with the common
market within the meaning of Article 87(3) of the Treaty and
shall be exempt from the notification requirement of Article
88(3) of the Treaty provided that it contains an express refer-
ence to this Regulation, by citing its title and publication
reference in the Official Journal of the European Communities.

2.
Aid schemes fulfilling all the conditions of this Regula-
tion shall be compatible with the common market within the
meaning of Article 87(3) of the Treaty and shall be exempt
from the notification requirement of Article 88(3) of the Treaty
provided that:

(a) any aid that could be awarded under such scheme fulfils all

the conditions of this Regulation;

(f) ‘aid intensity’ shall mean the gross aid amount expressed as
a percentage of the project's eligible costs. All figures used
shall be taken before any deduction for direct taxation.
Where aid is awarded in a form other than a grant, the aid

(b) the scheme contains an express reference to this Regula-
tion, by citing its title and publication reference in the
Official Journal of the European Communities.

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Aid granted under the schemes referred to in paragraph 2
3.
shall be compatible with the common market within the
meaning of Article 87(3) of the Treaty and shall be exempt
from the notification requirement of Article 88(3) of the Treaty
provided that the aid granted directly fulfils all the conditions
of this Regulation.

Article 4

Exempted training aid

Aid schemes and individual aid for training must fulfil the

1.
conditions laid down in paragraphs 2 to 7.

7.

The eligible costs of a training aid project shall be:

(a) trainers' personnel costs,

(b) trainers' and trainees' travel expenses,

(c) other current expenses such as materials and supplies,

(d) depreciation of tools and equipment, to the extent that they

are used exclusively for the training project,

(e) cost of guidance and counselling services with regard to the

training project,

(f) trainees' personnel costs up to the amount of the total of
the other eligible costs referred to in (a) to (e). Only the
hours during which the trainees actually participate in the
training, after deduction of any productive hours or of their
equivalent, may be taken into account.

2. Where the aid is granted for specific training, its intensity
shall not exceed 25 % for large enterprises and 35 % for small
and medium-sized enterprises.

The eligible costs shall be supported by documentary evidence,
which shall be transparent and itemised.

These intensities shall be increased by five percentage points
for enterprises in areas which qualify for regional aid pursuant
to Article 87(3)(c) of the Treaty and by 10 percentage points
for enterprises in areas which qualify for regional aid pursuant
to Article 87(3)(a) of the Treaty.

3. Where the aid is granted for general training, its intensity
shall not exceed 50 % for large enterprises and 70 % for small
and medium-sized enterprises.

These intensities shall be increased by five percentage points
for enterprises in areas which qualify for regional aid pursuant
to Article 87(3)(c) of the Treaty and by 10 percentage points
for enterprises in areas which qualify for regional aid pursuant
to Article 87(3)(a) of the Treaty.

4.
The maximum intensities referred to in paragraphs 2 and
3 shall be increased by 10 percentage points if the training is
given to disadvantaged workers.

5.
In cases where the aid project involves both specific and
general training components which cannot be separated for the
calculation of the aid intensity, and in cases where the specific
the training aid project cannot be
or general character of
established,
the intensities applicable to specific training
pursuant to paragraph 2 shall apply.

6. Where the aid is granted in the maritime transport sector,
it may reach an intensity of 100 %, whether the training
project concerns specific or general training, provided that the
following conditions are met:

(a) the trainee shall not be an active member of the crew but

shall be supernumerary on board, and

(b) the training shall be carried out on board ships entered on

Community registers.

Article 5

Large individual aid grants

The exemption shall not apply if the amount of aid granted to
one
exceeds
single
enterprise
EUR 1 000 000.

training project

for

a

Article 6

Cumulation

1.
The aid ceilings fixed in Articles 4 and 5 shall apply
regardless of whether the support for the project is financed
entirely from State resources or is partly financed by the
Community.

Aid exempted by this Regulation shall not be cumulated
2.
with any other State aid within the meaning of Article 87(1) of
the Treaty, or with other Community funding, in relation to
the same eligible costs, if such cumulation would result in an
aid intensity exceeding that fixed by this Regulation.

Article 7

Transparency and monitoring

1.
On implementation of an aid scheme, or grant of indi-
vidual aid outside any scheme, exempted by this Regulation,
Member States shall, within 20 working days, forward to the
Commission, with a view to its publication in the Official
Journal of the European Communities, a summary of the informa-
tion regarding such aid scheme or individual aid according to
the model

laid down in Annex II.

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2. Member States shall maintain detailed records regarding the aid schemes exempted by this Regulation,
the individual aid granted under those schemes, and the individual aid exempted by this Regulation that is
granted outside any existing aid scheme. Such records shall contain all information necessary to establish
that the conditions for exemption, as laid down in this Regulation, are fulfilled. Member States shall keep a
record regarding an individual aid for 10 years from the date on which it was granted, and regarding an aid
scheme, for 10 years from the date on which the last individual aid was granted under such scheme. On
written request, the Member State concerned shall provide the Commission, within a period of 20 working
days or such longer period as may be fixed in the request, with all the information which the Commission
considers necessary to assess whether the conditions of this Regulation have been complied with.

3. Member States shall compile a report on the application of this Regulation in respect of each whole
or part calendar year during which this Regulation applies, in the form laid down in Annex III, also in
computerised form. Member States shall provide the Commission with such report no later than three
months after the expiry of the period to which the report relates.

Article 8

Entry into force and period of validity

This Regulation shall enter into force on the 20th day following its publication in the Official Journal

1.
of the European Communities.

It shall remain in force until 31 December 2006.

At the end of the period of validity of this Regulation, aid schemes exempted under this Regulation

2.
shall remain exempted during an adjustment period of six months.

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

Done at Brussels, 12 January 2001.

For the Commission

Mario MONTI

Member of the Commission

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ANNEX I

Definition of small and medium-sized enterprises

(extract from Commission Recommendation 96/280/EC of 3 April 1996 concerning the definition of small and medium-sized
enterprises (OJ L 107, 30.4.1996, p. 4))

1.

Small and medium-sized enterprises, hereinafter referred to as “SMEs”, are defined as enterprises which:

‘Article 1

— have fewer than 250 employees, and

— have either,

— an annual turnover not exceeding EUR 40 million, or
— an annual balance-sheet total not exceeding EUR 27 million,

— conform to the criterion of independence as defined in paragraph 3.

2. Where it is necessary to distinguish between small and medium-sized enterprises, the “small enterprise” is defined as
an enterprise which:

— has fewer than 50 employees and

— has either,

— an annual turnover not exceeding EUR 7 million, or
— an annual balance-sheet total not exceeding EUR 5 million,

— conforms to the criterion of independence as defined in paragraph 3.

3.
Independent enterprises are those which are not owned as to 25 % or more of the capital or the voting rights by
one enterprise, or jointly by several enterprises, falling outside the definitions of an SME or a small enterprise, whichever
may apply. This threshold may be exceeded in the following two cases:

— if the enterprise is held by public investment corporations, venture capital companies or institutional

investors,

provided no control

is exercised either individually or jointly,

— if the capital is spread in such a way that it is not possible to determine by whom it is held and if the enterprise
declares that it can legitimately presume that it is not owned as to 25 % or more by one enterprise, or jointly by
several enterprises, falling outside the definitions of an SME or a small enterprise, whichever may apply.

In calculating the thresholds referred to in paragraphs 1 and 2, it is therefore necessary to cumulate the relevant
4.
figures for the beneficiary enterprise and for all the enterprises that it directly or indirectly controls through possession of
25 % or more of the capital or of the voting rights.

5. Where it is necessary to distinguish microenterprises from other SMEs, these are defined as enterprises having fewer
than 10 employees.

6. Where, at the final balance-sheet date, an enterprise exceeds or falls below the employee thresholds or financial
ceilings, this is to result in its acquiring or losing the status of “SME”, “medium-sized enterprise”, “small enterprise” or
“microenterprise” only if the phenomenon is repeated over two consecutive financial years.

7.
The number of persons employed corresponds to the number of annual working units (AWU), that is to say, the
number of full-time workers employed during one year with part-time and seasonal workers being fractions of AWU. The
reference year to be considered is that of the last approved accounting period.

8.
The turnover and balance-sheet total thresholds are those of the last approved 12-month accounting period. In the
case of newly established enterprises whose accounts have not yet been approved, the thresholds to apply shall be derived
from a reliable estimate made in the course of the financial year.’

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ANNEX II

Form of summary information to be provided whenever an aid scheme exempted by this Regulation is implemented
and whenever an individual aid exempted by this Regulation is granted outside any aid scheme

Summary information on State aid granted in conformity with Commission Regulation (EC) No 68/2001

Summary information to be filled in

Explanatory remarks

Member State

Region

Indicate the name of the region if the aid is granted by a
subcentral authority

Title of aid scheme or name of company receiving an
individual aid

Indicate the name of the aid scheme or in the case of indivi-
dual aid, the name of the beneficiary.

Legal basis

In the latter case, no subsequent annual report is necessary!

Indicate the precise national
scheme or for the individual aid

legal reference for the aid

Annual expenditure planned under the scheme or overall
amount of individual aid granted to the company

Amounts are to be given in euro or, if applicable, national
currency.

In the case of an aid scheme:

indicate the annual overall amount of the budget appropria-
tion(s) or the estimated tax loss per year for all aid instru-
ments contained in the scheme.

In the case of an individual aid award:

indicate the overall aid amount/tax loss. If appropriate, indi-
cate also for how many years the aid will be paid in instal-
ments or over how many years tax losses will be incurred.

For guarantees in both cases,
amount of loans guaranteed

indicate the (maximum)

Indicate the maximum aid intensity or the maximum aid
amount per eligible item

Indicate the date from which aid may be granted under the
scheme or when the individual aid is granted

Indicate the date (year and month) until which aid may be
granted under the scheme or in the case of an individual aid
and if appropriate the expected date (year and month) of the
last instalment to be paid

In the case of training aid, indicate whether the training is
specific or general.

In the case of general training, documentary evidence (e.g.
description of the contents of the training) must be attached
regarding the qualification of the training as general

Maximum aid intensity

Date of implementation

Duration of scheme or individual aid award

Objective of aid

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Summary information to be filled in

Explanatory remarks

Economic sector(s) concerned

Choose from the list, where relevant

(cid:1) All sectors

or

(cid:1) Agriculture

(cid:1) Fisheries and Aquaculture

(cid:1) Coalmining

(cid:1) All manufacturing

or

(cid:1) Steel

(cid:1) Shipbuilding

(cid:1) Synthetic fibres

(cid:1) Motor vehicles

(cid:1) Other manufacturing

(cid:1) All services

or

(cid:1) Maritime transport services

(cid:1) Other transport services

(cid:1) Financial services

(cid:1) Other services

Remarks:

Name and address of the granting authority

Other information

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ANNEX III

Form of the periodic report to be provided to the Commission

Annual reporting format on aid schemes exempted under a group exemption regulation adopted pursuant to
Article 1 of Council Regulation (EC) No 994/98

Member States are required to use the format below for their reporting obligations to the Commission under group
exemption regulations adopted on the basis of Council Regulation (EC) No 994/98.

The reports should also be provided in computerised form.

Information required for all aid schemes exempted under group exemption regulations adopted pursuant to Article 1 of Council
Regulation (EC) No 994/98

1. T i t l e o f a i d s c h e m e

2. C o m m i s s i o n e x e m p t i o n r e g u l a t i o n a p p l i c a b l e

3. E x p e n d i t u r e

Separate figures have to be provided for each aid instrument within a scheme or individual aid (e.g. grant, soft loans,
etc). The figures have to be expressed in euro or, if applicable, national currency. In the case of tax expenditure, annual
tax losses have to be reported. If precise figures are not available, such losses may be estimated.

These expenditure figures should be provided on the following basis:

for the year under review indicate separately for each aid instrument within the scheme (e.g. grant, soft loan, guarantee,
etc.):

3.1. amounts committed, (estimated) tax losses or other revenue forgone, data on guarantees, etc. for new assisted
projects. In the case of guarantee schemes, the total amount of new guarantees handed out should be provided;

3.2. actual payments, (estimated) tax losses or other revenue forgone, data on guarantees, etc. for new and current
projects. In the case of guarantee schemes, the following should be provided: total amount of outstanding
guarantees, premium income, recoveries, indemnities paid out, operating result of the scheme under the year
under review;

3.3. number of new assisted projects;

3.4. estimated overall number of jobs created or maintained by new projects (if appropriate);

3.5. estimated overall amount of investment aided by new projects;

3.6. regional breakdown of amounts under point 3.1 either by regions defined at NUTS (1) level 2 or below or by

Article 87(3)(a) regions, Article 87(3)(c) regions and non-assisted regions;

3.7. sectorial breakdown of amounts under point 3.1. by beneficiaries' sectors of activity (if more than one sector is

covered,

indicate the share of each):

— agriculture

— fisheries and/or aquaculture

— coalmining

— manufacturing

of which:

steel

shipbuilding

synthetic fibres

motor vehicles

other manufacturing (please specify)

(1) NUTS is the nomenclature of territorial units for statistical purposes in the EC.

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— services

of which:

maritime transport services

other transport services

financial services

other services (please specify)

— other sectors (please specify)

4. O t h e r

i n f o r m a t i o n a n d r e m a r k s