2004/15/: EFTA Surveillance Authority Decision No 15/04/COL of  18 February 2004  amending for the forty-first time the Procedural and Substantive Rules in the Field of State Aid by introducing a new chapter 9C: Professional secrecy in State aid decisions
Date: 2004-02-18
Institutions: EFTA Surveillance Authority
Subjects: EFTA, European Economic Area, State aid, control of State aid, professional secret

8.6.2006

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Official Journal of the European Union

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EUROPEAN ECONOMIC AREA

EFTA SURVEILLANCE AUTHORITY

EFTA SURVEILLANCE AUTHORITY DECISION

No 15/04/COL

of 18 February 2004

amending for the forty-first time the Procedural and Substantive Rules in the Field of State Aid by
introducing a new chapter 9C: Professional secrecy in State aid decisions

THE EFTA SURVEILLANCE AUTHORITY,

Having regard to the Agreement on the European Economic
Area (1),
in particular to Articles 61 to 63 and Protocol 26
thereof,

Having regard to the Agreement between the EFTA States on
the establishment of a Surveillance Authority and a Court of
Justice (2), in particular to Article 24, Article 5(2)(b) and Article
1 in Part I of Protocol 3 thereof (3),

Whereas under Article 24 of
the Surveillance and Court
Agreement, the EFTA Surveillance Authority shall give effect
to the provisions of the EEA Agreement concerning State aid,

Whereas under Article 5(2)(b) of the Surveillance and Court
Agreement,
issue
the EFTA Surveillance Authority
notices or guidelines on matters dealt with in the EEA
Agreement,
if that Agreement or the Surveillance and Court
Agreement expressly so provides or if the EFTA Surveillance
Authority considers it necessary,

shall

Recalling the Procedural and Substantive Rules in the Field of
State Aid (4) adopted on 19 January 1994 by the EFTA
Surveillance Authority,

following

and Court Agreement,

(1) Hereinafter referred to as the EEA Agreement.
(2) Hereinafter referred to as the Surveillance and Court Agreement.
(3) It has to be noted that

the amendments to Protocol 3 to the
Surveillance
an agreement
between EFTA States of 10.12.2001, amending Protocol 3 to the
Agreement between the EFTA States on the Establishment of a
Surveillance Authority and a Court of Justice, entered into force
on 28.8.2003. These amendments incorporated ‘Council Regulation
(EC) No 659/1999 of 22.3.1999, laying down detailed rules for the
application of [ex] Article 93 of the EC Treaty’
into Protocol 3.
(4) Guidelines on the application and interpretation of Articles 61 and
62 of
the EEA Agreement and Article 1 of Protocol 3 to the
Surveillance and Court Agreement, adopted and issued by the
EFTA Surveillance Authority on 19.1.1994, OJ No L 231 of
3.9.1994, EEA Supplement No 32, last amended by the Authority's
Decision No 198/03/COL of 5.11.2003, not yet published. Here-
inafter referred to as the State Aid Guidelines.

Whereas the European Commission issued a new communi-
cation C(2003) 4582 on professional secrecy in State aid
decisions on 1 December 2003 (5),

Whereas this communication is also of
European Economic Area,

relevance for

the

Whereas a uniform application of the EEA State aid rules is to
be ensured throughout the European Economic Area,

Whereas, according to point II under the heading ‘GENERAL’ at
the end of Annex XV to the EEA Agreement,
the EFTA
Surveillance Authority is to adopt, after consultation with the
Commission, acts corresponding to those adopted by the
European Commission,

Having consulted the European Commission,

Recalling that the EFTA Surveillance Authority has consulted
the EFTA States in a multilateral meeting on 3 February 2004
on the subject,

HAS ADOPTED THIS DECISION:

1. The State Aid Guidelines shall be amended by adding a new
Chapter 9C with the title ‘Professional secrecy in State aid
decisions’.

2. The new Chapter 9C to the State Aid Guidelines can be

found in the Annex to this Decision.

(5) Commission communication C(2003) 4582 of 1 December 2003
on professional secrecy in State aid decisions, published in OJ No
C 297 of 9 December 2003, page 6.

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3. The EFTA States shall be informed by means of a letter,
including a copy of this Decision and including the Annex.

6. The Decision shall be authentic in the English language.

4. The European Commission shall be informed, in accordance
with point (d) of Protocol 27 of the EEA Agreement, by
means of a copy of this Decision, including the Annex.

Done at Brussels, 18 February 2004.

For the EFTA Surveillance Authority

5. The Decision, including the Annex, shall be published in the
EEA Section of and in the EEA Supplement to the Official
Journal of the European Union.

Hannes HAFSTEIN
President

Bernd HAMMERMANN
College Member

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ANNEX

9C. PROFESSIONAL SECRECY IN STATE AID DECISIONS

9C.1. Introduction

1.

This Communication sets out how the EFTA Surveillance Authority intends to deal with requests by EFTA States, as
addressees of State Aid decisions, to consider parts of such decisions as covered by the obligation of professional
secrecy and thus not to be disclosed when the decision is published.

2.

This involves two aspects, namely:

(a) the identification of the information which might be covered by the obligation of professional secrecy; and

(b) the procedure to be followed for dealing with such requests.

1.

2.

3.

4.

9C.2. Legal framework

Article 122 of the EEA Agreement, which corresponds in the wording to Article 287 of the EC Treaty, states that:
‘The representatives, delegates and experts of the Contracting Parties, as well as officials and other servants acting
under this Agreement shall be required, even after their duties have ceased, not to disclose information of the kind
covered by the obligation on professional secrecy,
in particular information about undertakings, their business
relations or their cost components’.

This is also reflected in Articles 24 and 25 of Part II to Protocol 3 to the Surveillance and Court Agreement on the
Functions and Powers of the EFTA Surveillance Authority in the field of State Aid (1).

Article 16 of the Surveillance and Court Agreement states: ‘Decisions of the EFTA Surveillance Authority shall state
the reasons on which they are based’.

Article 6(1), first sentence of Protocol 3 to the Surveillance and Court Agreement further stipulates with regard to
decisions to initiate the formal investigation procedures: ‘The decision to initiate the formal investigation procedure
shall summarise the relevant issues of fact and law, shall include a preliminary assessment of the EFTA Surveillance
Authority as to the aid character of the proposed measure and shall set out the doubts as to its compatibility with
the common market […]’.

9C.3. Identification of information which can be covered by professional secrecy

1.

The EC Court of Justice has established that although Article 287 of the EC Treaty primarily refers to information
gathered from undertakings, the expression ‘in particular’ shows that the principle in question is a general one which
applies also to other confidential information (2).

2.

It follows that professional secrecy covers both business secrets and other confidential information.

3.

There is no reason why the notions of business secret and other confidential information should be interpreted
differently from the meaning given to these terms in the context of antitrust and merger procedures. The fact that in
antitrust and merger procedures the addressees of the Authority decision are undertakings, while in State Aid
procedures the addressees are EFTA States, does not constitute an obstacle to a uniform approach as to the
identification of what can constitute business secrets or other confidential information.

(1) It has to be noted that the amendments to Protocol 3 to the Surveillance and Court Agreement, following an agreement between EFTA
States of 10.12.2001, amending Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance
Authority and a Court of Justice, entered into force on 28.8.2003. These amendments incorporated ‘Council Regulation (EC) No
659/1999 of 22.3.1999, laying down detailed rules for the application of [ex] Article 93 of the EC Treaty’ into Protocol 3.

(2) Case 145/83 Adams v Commission [1985] ECR 3539, para. 34, and Case T-353/94 Postbank v Commission [1996] ECR II-921, para. 86.

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1.

2.

3.

9C.3.1. Business secrets

Business secrets can only concern information relating to a business which has actual or potential economic value,
the disclosure or use of which could result in economic benefits for other companies. Typical examples are methods
of assessing manufacturing and distribution costs, production secrets (that is to say, a secret, commercially valuable
plan, formula, process or device that is used for the making, preparing, compounding, or processing of trade
commodities and that can be said to be the end product of either innovation or substantial effort) and
processes, supply sources, quantities produced and sold, market shares, customer and distributor lists, marketing
plans, cost price structure, sales policy, and information on the internal organisation of the undertaking.

It would appear that in principle business secrets can only relate to the beneficiary of the aid (or other third party)
and can only concern information submitted by the EFTA State (or third party). Hence, statements from the
Authority itself (for example, expressing doubts about feasibility of a restructuring plan) cannot be covered by
the obligation of professional secrecy.

The simple fact that disclosure of information might cause harm to the company is not of itself sufficient grounds to
consider that such information should be considered as business secret. For example, a decision of the Authority to
initiate the formal investigation procedure in the case of a restructuring aid may cast doubt on certain aspects of the
restructuring plan in the light of information the Authority has received. Such a decision could (further) affect the
credit-position of that company. However, that would not necessarily lead to the conclusion that the information on
which that decision was based must be considered as business secrets.

4.

In general, the Authority will apply the following non-exhaustive list of criteria to determine whether information
can be deemed to constitute business secrets:

(a) the extent to which the information is known outside the company;

(b) the extent to which measures have been taken to protect the information within the company, for example,

through non-compete clauses or non-disclosure agreements imposed on employees or agents, etc;

(c) the value of the information for the company and its competitors;

(d) the effort or investment which the undertaking had to undertake to acquire the information;

(e) the effort which others would need to undertake to acquire or copy the information;

(f)

the degree of protection offered to such information under the legislation of the EFTA State concerned.

5.

In principle, the Authority considers that the following information would not normally be covered by the
obligation of professional secrecy:

(a) information which is publicly available, including information available only upon payment through specialised
information services or information which is common knowledge among specialists in the field (for example
common knowledge among engineers or medical doctors). Likewise, turnover is not normally considered as a
business secret, as it is a figure published in the annual accounts or otherwise known to the market. Reasons
must be given for requests for confidentiality concerning turnover figures which are not in the public domain
and the requests must be evaluated on a case-by-case basis. The fact that information is not publicly available
does not necessarily mean that the information can be regarded as a business secret;

(b) historical information, in particular information at least five years old;

(c) statistical or aggregate information;

(d) names of aid recipients, sector of activity, purpose and amount of the aid, etc.

6. Detailed reasons must be given for any request to derogate from these principles in exceptional cases.

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1.

2.

1.

2.

3.

4.

9C.3.2. Other confidential information

In antitrust and merger cases, confidential information includes certain types of information communicated to the
Authority on condition that confidentiality is observed (for example a market study commissioned by an under-
taking which is party to the procedure and forming part of its property). It seems that a similar approach could be
retained for State Aid decisions.

In the field of State Aid, there may, however, be some forms of confidential
information, which would not
necessarily be present in antitrust and merger procedures, referring specifically to secrets of the State or other
confidential information relating to its organisational activity. Generally, in view of the Authority's obligation to
state the reasons for its decisions and the transparency requirement, such information can only in very exceptional
circumstances be covered by the obligation of professional secrecy. For example, information regarding the orga-
nisation and costs of public services will not normally be considered ‘other confidential information’ (although it
may constitute a business secret, if the criteria laid down in section 9C. 3.1 are met).

9C.4. Applicable procedure

9C.4.1. General principles

The Authority's main task is to reconcile two opposing obligations, namely the requirement to state the reasons for
its decisions under Article 16 of the Surveillance and Court Agreement and therefore ensure that its decisions
contain all the essential elements on which they are based, and that of safeguarding the obligation of professional
secrecy.

Besides the basic obligation to state the reasons for its decisions, the Authority has to take into account the need for
effective application of the State Aid rules (inter alia, by giving EFTA States, beneficiaries and interested parties the
possibility to comment on or challenge its decisions) and for transparency of its policy. There is therefore an
overriding interest in making public the full substance of its decisions. As a general principle, requests for confi-
dential treatment can only be granted where strictly necessary to protect business secrets or other confidential
information meriting similar protection.

Business secrets and other confidential information do not enjoy an absolute protection: this means for example that
they could be divulged when they are essential for the Authority's statement of the reasons for its decisions. This
means that information necessary for the identification of an aid measure and its beneficiary cannot normally be
covered by the obligation of professional secrecy. Similarly,
the
conditions of Article 61 of the EEA Agreement are met, cannot normally be covered by the obligation of profes-
sional secrecy. However, the Authority will have to consider carefully whether the need for publication is more
important, given the specific circumstances of a case, than the prejudice that might be generated for that EFTA State
or undertaking involved.

information necessary to demonstrate that

The public version of a Authority decision can only feature deletions from the adopted version for reasons of
professional secrecy. Paragraphs cannot be moved, and no sentence can be added or altered. Where the Authority
considers that certain information cannot be disclosed, a footnote may be added, paraphrasing the non-disclosed
information or indicating a range of magnitude or size, if useful to assure the comprehensibility and coherence of
the decision.

5.

Requests not to disclose the full text of a decision or substantial parts of it which would undermine the under-
standing of the Authority's statement of reasons cannot be accepted.

6.

If there is a complainant involved, the Authority will take into account the complainant's interest in ascertaining the
reasons why the Authority adopted a certain decision, without the need to have recourse to Court proceedings (3).
Hence, requests by EFTA States for parts of the decision which address concerns of complainants to be covered by
the obligation of professional secrecy will need to be particularly well reasoned and persuasive. On the other hand,
the Authority will not normally be inclined to disclose information alleged to be of the kind covered by the
obligation of professional secrecy where there is a suspicion that the complaint has been lodged primarily to
obtain access to the information.

(3) Case C-367/95 P Commission v Sytraval [ECR] 1998, I-1719, para. 64.

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7.

1.

EFTA States cannot invoke professional secrecy to refuse to provide information to the Authority which the
Authority considers necessary for the examination of aid measures.
In this respect, reference is made to the
procedure set out in Protocol 3 to the Surveillance and Court Agreement (in particular Articles 2(2), 5, 10 and
16 in Part II of Protocol 3).

9C.4.2. Procedure

The Authority currently notifies its decisions to the EFTA State concerned without delay and gives the latter the
opportunity to indicate, normally within a time period of 15 working days, which information it considers to be
covered by the obligation of professional secrecy. This time period may be extended by agreement between the
Authority and the EFTA State concerned.

2. Where the EFTA State concerned does not indicate which information it considers to be covered by the obligation
of professional secrecy within the period prescribed by the Authority, the decision will normally be disclosed in full.

3. Where the EFTA State concerned wishes certain information to be covered by the obligation of professional secrecy,
it must indicate the parts it considers to be covered and provide a justification in respect of each part for which non-
disclosure is requested.

4.

5.

6.

7.

8.

9.

The Authority will then examine the request from the EFTA State without delay. If the Authority does not accept
that certain parts of the decision are covered by the obligation of professional secrecy, it will state the reasons why
in its view those parts cannot be left out of the public version of the decision. In the absence of an acceptable
justification by the EFTA State for its request (i.e. reasoning which is not manifestly irrelevant or manifestly wrong),
the Authority need not further specify the reasons why those parts cannot be left out of the public version of the
decision other than by referring to the absence of justification.

If the Authority decides to accept that certain parts are covered by the obligation of professional secrecy without
agreeing in full with the EFTA State's request, it will notify its decision with a new draft to the EFTA State indicating
the parts which have been omitted. If the Authority accepts that the parts indicated by the EFTA State are covered
by the obligation of professional secrecy, the text of the decision will be published pursuant to Article 26 in Part II
of Protocol 3 to the Surveillance and Court Agreement, with the omission of the parts covered by the obligation of
professional secrecy. Such omissions will be indicated in the text (4).

The EFTA State will have 15 working days following receipt of the Authority's decision stating the reasons for its
refusal to accept the non-disclosure of certain parts, to react and provide additional elements to justify its request.

If the EFTA State concerned does not react further within the period prescribed by the Authority, the Authority will
normally publish the decision as indicated in its reply to the original request made by the EFTA State.

If the EFTA State concerned does submit any additional elements within the prescribed period, those elements will
be examined by the Authority without delay. If the Authority accepts that the parts indicated by the EFTA State are
covered by the obligation of professional secrecy, the text of the decision will be published as set out above.

In the event that it is not possible to reach agreement, the Authority will proceed with the publication of its decision
to initiate the formal investigation procedure forthwith. Such decisions must summarise the relevant issues of fact
and law, include a preliminary assessment of the aid character of the proposed measure and set out the doubts as to
its compatibility with the common market. Clearly certain essential information must be included in order to enable
third parties and the other EFTA States to comment usefully. The duty of the Authority to provide such essential
information will normally prevail over any claim to the protection of business secrets or other confidential
information. Furthermore,
it is in the interest of the beneficiary as well as interested parties to have access to
such a decision as quickly as possible. Permitting any delay in this respect would jeopardise the process of State Aid
control.

(4) Using square brackets […] and indicating in a footnote ‘covered by the obligation of professional secrecy’.

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10.

In the event that it is not possible to reach agreement on requests for certain information in decisions not to raise
objections and decisions to close the formal investigation procedure to be covered by the obligation of professional
secrecy, the Authority will notify its final decision to the EFTA State together with the text it intends to publish,
giving the EFTA State another 15 working days to react. In the absence of an answer which the Authority considers
pertinent, the Authority will normally proceed with the publication of the text.

11. The Authority is currently reviewing its State Aid notification forms. In order to avoid unnecessary correspondence
with EFTA States and delay in the publication of decisions, it intends, in the future, to include in the form a question
asking whether the notification contains information which should not be published, and the reasons for non-
publication. Only if that question is answered in the affirmative will the Authority enter into correspondence with
the EFTA State in respect of specific cases. Similarly, if additional information is required by the Authority, the EFTA
State will have to indicate at the moment it provides the information requested whether such information should
not be published, and the reasons for non-publication. If the Authority uses the information thus identified by the
EFTA State in its decision, it will communicate the adopted decision to the EFTA State, stating the reasons why in its
view these parts cannot be left out from the public version of the decision as laid down above.

12. Once the Authority has decided what text it will publish and notified the EFTA State of its final decision, it is for the
EFTA State to decide whether or not to make use of any judicial procedures available to it, including any interim
measures, within the time-limits provided for in Article 36 of the Surveillance and Court Agreement.

9C.4.3. Third parties

1. Where third parties other than the EFTA State concerned (for example, complainants, other EFTA States or the
beneficiary) submit information in the context of State Aid procedures, these guidelines will be applied mutatis
mutandis.

9C.4.4. Application in time

1.

These guidelines cannot establish binding legal rules and do not purport to do so. They merely set out in advance, in
the interests of sound administration, the manner in which the Authority intends to address the issue of confi-
dentiality in State Aid procedures. As a rule, if agreement cannot be reached, the Authority's decision to publish may
be the subject of specific judicial review proceedings. As these guidelines merely pertain to procedural matters (and
to a large extent set out existing practice), they will be applied with immediate effect, including for decisions not to
raise objections (5) adopted before the entry into force of the amendments (6) to Protocol 3 to the Surveillance and
Court Agreement to which third parties seek access.

(5) Decisions to initiate the formal investigation procedure and final decisions adopted before that date were already published in the
Official Journal of the European Communities (from the entry into force of the Nice Treaty renamed as Official Journal of the European
Union), EEA Section. Prior to publication, EFTA States could indicate whether any information was covered by the obligation of
professional secrecy.

(6) See footnote 1.