WRITTEN QUESTION E-0824/03 by Paul Rübig (PPE-DE) to the Commission. Restrictions on the transfer of securities in the Czech Republic.
Date: 2003-03-18
Institutions: European Parliament, Provisional data
Subjects: Czechia, European Energy Charter, capital transfer, financial legislation, free movement of capital, gas industry, liberalisation of the market, privatisation

C 88 E/16

Official Journal of the European Union

EN

8.4.2004

The remaining bulk of the Community assistance has been provided through the TFET. This has been
done on the basis of reports prepared by the World Bank and the Asian Development Bank and
presented to meetings of the Donors’ Council of the Trust Fund for East Timor. The conclusions of
these reports have generally been considered very positive by donors, and on the basis of the reports
further tranches of funding for the Trust have been committed.

The Commission considers that the impact of its assistance to East Timor since 1999 has been
extremely positive. This assistance has been provided in a systematic and logical approach comprising
four types of intervention: (a) initial emergency humanitarian assistance, (b) medium-term support for
administrative capacity building and rehabilitation, (c) support for the democratic process, and (d)
longer-term development assistance. These interventions have been linked to each other in that, for
example, humanitarian assistance in the health sector has led on to longer-term policy development
and development co-operation financing with Community funding in that sector. Likewise, capacity
building under the UNDP project in the Ministry of Agriculture will provide the administrative
framework for the implementation of Community and other donors’ future longer-term interventions
in that sector.

In so far as it has assisted East Timor to reach its newly-found independence and to prepare itself for
its longer-term development, the Community aid provided can be considered most successful.

An overview of Community assistance to East Timor can be found on the Europa website at: (http://
europa.eu.int/comm/external_relations/east_timor/index.htm).

Two NGO projects for East Timor have been selected, as a result of the call for proposals 2001 of the
European Initiative for Democracy and Human Rights, their details are sent direct to the Honourable
Member and to Parliament’s Secretariat.

(2004/C 88 E/0015)

WRITTEN QUESTION E-0824/03

by Paul Rübig (PPE-DE) to the Commission

(18 March 2003)

Subject: Restrictions on the transfer of securities in the Czech Republic

Even though investors in the south Bohemian energy supply company JÈP exercise all their shareholders’
rights for a significant proportion of their stake, the shares are owned by the municipalities in southern
Bohemia. The reason is that, under the JÈP statutes, the transfer of shares is restricted (transfers can be
made only between municipalities and state funds). Investors may acquire rights only in respect of the
acquisition of shares, dividends, etc. Shareholders’ requests for an amendment to the statutes abolishing
these restrictions on transfers have been consistently rejected by the Czech state (following the
privatisation of RWE). Similar applications have been approved by the state for almost all the other
Czech gas and electricity distribution companies (there were also ‘municipality shares’ in the case of the
electricity companies).

Owing to the restrictions on selling, the holders of JÈP shares (the municipalities) are not in a position to
dispose freely of their shares. Does this not represent discrimination against the shareholders and hence a
contravention of EU rules?

Is the fact that some investors are placed at a disadvantage compatible with the investment protection
provisions of the European energy charter, which has also been ratified in the Czech Republic, and with
the spirit of energy market liberalisation, which provides ‘inter alia’ for the equal treatment of market
participants?

In view of the dominant position of RWE in the Czech natural gas sector,
this situation appears
counterproductive. How does the Commission assess this situation on the Czech natural gas market, which
is a significant market for Europe?

8.4.2004

EN

Official Journal of the European Union

C 88 E/17

Answer given by Verheugen on behalf of the Commission

(6 May 2003)

The situation described in the question of the Honourable Member should not be considered as a
discrimination linked to the nationality of the shareholders of Jiho Ceska Plynarenska (JCP), the south
Bohemian energy supply company. Two German companies, RWE and EON are apparently among the
largest JPC shareholders. It appears that Czech municipalities are also major shareholders in the capital of
this company and have a controlling stake (34 percent). It would appear that municipalities hold JCP
shares which are not legally tradable, which is not the case for the other JCP shares held by other
investors.

Community legislation requires shares of companies which are traded on an official stock exchange listing
to be freely negotiable (Article 46(1) of Directive 2001/34/EC of the Parliament and of the Council of
28 May 2001 on the admission of securities to official stock exchange listing and on the information to be
published on those securities (1)). However, paragraph 3 of the said Article authorises an approval clause
under the condition that it does not distort the market.

JCP is listed on the Czech Stock Exchange. To the extent that the shares held by the Czech municipalities
are of a different category and not admitted to the official list on the Czech Stock Exchange, this practice is
not incompatible with Community law. Only in the case of shares which are listed and for which a
restriction of selling clause could not be assimilated to an approval clause, as explained above, any
potential contradiction with Community legislation would need to be verified.

The Commission is in contact with the Czech Authorities to ensure that the relevant ‘acquis’
complied with.

is fully

It should be noted that the Czech Republic has obtained a Transition Period, within the framework of the
Accession Negotiations, concerning liberalisation of the gas market until the end of 2004 and this is set
down in the Accession Treaty.

The investment provisions of the European Energy Charter Treaty concern only the requirements with
respect to investors from another Contracting Party. For established investments, there is a requirement
that such investments of an investor from any other Contracting Party be treated no less favourably than
the established investments of an investor from the Contracting Party in question (‘national treatment’). For
the ‘Making of Investments’, however, which appears to be the case in question, there is only a ‘best
endeavours’ requirement to give such ‘national treatment’.

The award to RWE of the privatisation tender in the gas sector was concluded after clearance by the Czech
Competition Office, which is responsible under the Europe Agreement currently in force. As stated in the
2002 Regular Report (2), the Commission believes that the privatisation process has helped to prepare the
Czech gas sector for the competitive internal energy market.

(1) OJ L 184, 6.7.2001.
(2) COM(2002) 700 final.

(2004/C 88 E/0016)

WRITTEN QUESTION E-0904/03

by Jan Mulder (ELDR) to the Commission

(24 March 2003)

Subject: Use of agricultural diesel in border areas

Netherlands farmers working their land in Germany with red diesel in the fuel tanks of their farm vehicles,
face fines imposed by the German customs authorities, who do not allow this diesel, on which there are
tax concessions, to be used on German territory.

A German court has evidently referred the matter to the European Court of Justice for a preliminary
ruling.