2001/464/EC: Decision No 4/2001 of the EU-Latvia Association Council of 20 March 2001 adopting the implementing rules for the application of the provisions on State aid referred to in Article 64(1)(iii) and (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 Republic of Latvia, of the other part
Date: 2001-03-20
Institutions: EC–Latvia Association Council
Subjects: Latvia, State aid, association agreement (EU), competition law, control of State aid

L 163/16

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Official Journal of the European Communities

20.6.2001

II

(Acts whose publication is not obligatory)

COUNCIL

DECISION No 4/2001 OF THE EU-LATVIA ASSOCIATION COUNCIL

of 20 March 2001

adopting the implementing rules for the application of the provisions on State aid referred to in
Article 64(1)(iii) and (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
Republic of Latvia, of the other part

(2001/464/EC)

THE ASSOCIATION COUNCIL,

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

(5)

(6)

Whereas:

(1)

(2)

(3)

(4)

Article 64(3) of the Europe Agreement lays down that
the Association Council shall, by 31 December 1997,
adopt by decision the necessary rules for the imple-
mentation of paragraphs 1 and 2 of that Article.

the concept of

It is recalled that in accordance with Article 64(2) of the
Europe Agreement,
‘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 87 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
Republic of Latvia (State aid).

The Republic of Latvia will appoint a national institution
or administration to become a monitoring authority
with responsibility for State aid matters.

This monitoring authority will be responsible for the
analysis of existing and future individual aid awards and
programmes in the Republic of Latvia and will give an
opinion as to their compatibility with Article 64(1)(iii)
and (2) of the Europe Agreement.

The Republic of Latvia will, when providing for the
necessary rules to ensure effective supervision, ensure in
particular that the monitoring authority receives in due
time all the relevant information from the other govern-
level.
ment departments at central, regional and local

The Commission of the European Communities will,
under the relevant Community programmes, assist the
monitoring authority by providing for documentation,
training,
technical
assistance,

study tours and other

relevant

HAS DECIDED AS FOLLOWS:

Article 1

The Implementing Rules for the application of the provisions
on State aid referred to in Article 64(1)(iii) and (2) pursuant to
Article 64(3) of the Europe Agreement establishing an associa-
tion between the European Communities and their Member
States, of the one part, and the Republic of Latvia of the other
part, are hereby adopted.

Article 2

These Implementing Rules shall enter into force on the first day
of the month following the adoption of the rules.

Done at Brussels, 20 March 2001.

For the Association Council

The President

I. BĒRZIŅŠ

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IMPLEMENTING RULES

for the application of the provisions on State aid referred to in Article 64(1)(iii) and (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 Republic of Latvia, of the other
part

SURVEILLANCE OF STATE AID BY MONITORING AUTHORITIES

but are specifically brought to the attention of all Member
States.

Article 1

Surveillance of State aid by monitoring authorities

to the procedural rules in force in the European
Subject
Community (‘the Community’) and the Republic of Latvia, 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 Republic of
the
Latvia,
in
Community shall be
the European
Communities (‘the Commission’), and in the Republic of Latvia
the State aid Surveillance Commission.

respectively. The monitoring

the Commission of

authority

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 87 of
the Treaty establishing the European Community, including the
present and future secondary legislation, frameworks, guide-
lines and other relevant administrative 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 any decision taken by the Association Council pursuant to
Article 4(3).

Insofar as the aid awards or aid programmes are destined for
products covered by the Treaty establishing the European Coal
and Steel Community, the first subparagraph applies fully with
the exception that the assessment shall not be made on the
basis of the criteria arising from the application of the rules of
Article 87 of the Treaty establishing the European Community
but on the basis of the criteria arising from the application of
the rules on State aid of the Treaty establishing the European
Coal and Steel Community.

2.
The monitoring authority of the Republic of Latvia shall
be informed of any acts relating to the adoption, abolition or
modification of
the Community criteria of compatibility
referred to in paragraph 1, insofar as these are not published

information about

3. Where such changes do not encounter objections from
the Republic of Latvia within three months from the date of
they shall
receiving the official
become criteria of compatibility as provided for in paragraph 1
of this Article. Where such changes encounter objections from
the Republic of Latvia and having regard to the approximation
of legislation as provided for in the Europe Agreement, consul-
tations shall take place, in accordance with Articles 7 and 8 of
these Rules.

them,

The same principles shall apply in respect of other signifi-

4.
cant changes in Community policy on State aids.

Article 3

De minimis aid

Aid programmes or individual aid awards which do not involve
export aid and which fall below the threshold applicable in the
Community for de minimis aid (1) 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 Republic of Latvia shall
be regarded as an area identical
the
Community referred to in Article 87(3)(a) of the Treaty estab-
lishing the European Community.

to those areas of

The monitoring authorities shall

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

3.
The monitoring authorities may, if necessary and at the
request of the Republic of Latvia jointly evaluate problems
raised by the implementation of the Community acquis in the
field of State aids awarded by the Republic of Latvia as it
completes transition to a market economy. The evaluation of
such problems shall not relate to the agricultural sector, fish-
eries, coal and steel, or to sensitive sectors (automobiles, man-
made fibres or shipbuilding) for which specific Community
arrangements exist. Where appropriate, the monitoring author-
ities shall submit a joint proposal to the Association Council,
which may adopt a decision.

(1) Currently the Community de minimis

threshold according to the
Commission Notice on de minimis aid (OJ C 68, 6.3.1996, p. 9) is
EUR 100 000 of total aid per firm over a three-year period.

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PROCEDURES FOR CONSULTATION AND PROBLEM SOLVING

Article 5

Examination of certain aid

1. Where the amount of the aid in question amounts to
over EUR 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
authority to the Sub-Committee dealing with competition
policy and State aids for examination. The Sub-Committee may
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.

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.

3.
The Association Committee may decide to extend further
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 information about this from the authority responsible.
In any event, both monitoring authorities shall endeavour to
keep each other informed of important developments that may
be of practical

interest for the other.

Article 7

Consultation and comity

1. Whenever the Commission or the monitoring authority
of the Republic of Latvia considers that the award of State aid
on the territory for which the other authority is responsible
substantially affects its important
it may request
consultation with the other authority, and consequently it may
request that the other Party's monitoring authority initiate any
appropriate procedures 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.

interests,

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

Article 8

Problem solving

1. Where consultations under Article 7 do not lead to a
mutually acceptable solution, an exchange of views shall take
place within the Sub-Committee dealing with competition
policy and State aids established in the framework of
the
Europe Agreement at the request of one Party within three
months following the request.

2. Where this exchange of views does not lead to a mutually
acceptable solution, or after the expiration of
the period
referred to in paragraph 1, the matter may be submitted to the
Association Committee which may make appropriate recom-
mendations for the settlement of these cases.

3.
These procedures shall be without prejudice to any action
under Article 64(6) of the Europe Agreement. Trade instru-
ments 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.

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

TRANSPARENCY

Article 10

Inventory

the

Under

relevant Community programmes,

1.
the
Commission shall assist the Republic of Latvia 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.

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.

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

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Article 11

Mutual information

MISCELLANEOUS

Article 12

Administrative assistance (languages)

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.

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