Commission Regulation (EC) No 1860/2004 of 6 October 2004 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the agriculture and fisheries sectors
Date: 2004-10-06
Institutions: European Commission
Subjects: State aid, aid to agriculture, control of State aid, fishing industry

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COMMISSION REGULATION (EC) No 1860/2004

of 6 October 2004
on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the agriculture and
fisheries sectors

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,

establishing the European

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 Article 2(1) thereof,

Having published a draft of this Regulation (2),

Having consulted the Advisory Committee on State Aid,

Whereas:

(EAGGF) and amending and repealing certain Regu-
lation (4), and the Community guidelines for state aid in
the agriculture sector (5), it can be affirmed that very low
levels of aid granted in the agriculture sector do not fulfil
the criteria of Article 87(1) of the Treaty, provided that
certain conditions are met. This is the case where both
the amount of aid received by individual producers
level of aid granted to
remains small, and the overall
the agriculture sector does not go above a small
percentage of
the value of production. Agricultural
production in the Community is normally characterised
by the fact that every commodity is produced by a large
number of very small producers, producing largely inter-
changeable goods within the framework of common
organisations of the market. For this reason, the impact
of small amounts of aid granted to individual producers
over a given period of time should be related to the value
of agricultural production at sectoral level over the same
period of time. A ceiling in the form of an amount per
Member State established on the basis of the value of
output
in the agriculture sector allows a consistent
approach in all Member States, based on an objective
economic reference value.

(1)

(2)

(3)

Regulation (EC) No 994/98 empowers the Commission
to set out in a regulation a threshold below which aid
measures are considered not to meet all the criteria of
Article 87(1) of the Treaty and therefore do not fall
under the notification procedure provided for in Article
88(3) of the Treaty.

(4)

the notion of

in particular clarified,

The Commission has applied Articles 87 and 88 of the
Treaty and has
in numerous
‘aid’ within the meaning of
decisions,
Article 87(1) of
the Treaty. The Commission, most
recently in Regulation (EC) No 69/2001 (3), has also
stated its policy with regard to a de minimis ceiling,
under which Article 87(1) can be considered not
to
apply. In view of the special rules which apply in the
agriculture and fisheries sectors, and of the risks that
even low levels of aid could fulfil the criteria of Article
87(1) of
the Treaty in these sectors, Regulation (EC)
69/2001 does not apply to these sectors.

and

and

rules

arrangements

of Council Regulation

In the light of the experience of the Commission in the
assessment of State aid in the fisheries sector, especially
since the entry into force of the Community guidelines
for the examination of state aid to fisheries and aqua-
culture (6),
(EC) No
2792/1999 of 17 December 1999 laying down the
detailed
for Community
structural assistance in the fisheries sector (7), it can be
affirmed that very low levels of aid granted in the
fisheries sector do not fulfil the criteria of Article 87(1)
of the Treaty, provided that certain conditions are met.
Given the similarities of the production patterns in the
fisheries sector and the agriculture sector, this is the case
where both the amount of aid received by individual
enterprises remains small, and the overall
level of aid
granted to the fisheries sector does not go above a
small percentage of the value of production.

the

light of

experience

In the
the
Commission, especially since the entry into force of
Council Regulation (EC) No 1257/1999 of 17 May
from the
1999 on support
European Agricultural Guidance and Guarantee Fund

rural development

acquired by

for

(1) OJ L 142, 14.5.1998, p. 1.
(2) OJ C 93, 17.4.2004, p. 9.
(3) OJ L 10, 13.1.2001, p. 30.

(5) With a view to increasing transparency and legal
certainty, it seems appropriate to lay down a de minimis
rule for the agriculture and fisheries sector in a regu-
lation.

(4) OJ L 160, 26.6.1999, p. 80. Regulation as last amended by Regu-

lation (EC) No 583/2004 (OJ L 91, 30.3.2004, p. 1).

(5) Revised version OJ C 232, 12.8.2000, p. 19.
(6) OJ C 19, 20.1.2001, p. 7.
(7) OJ L 337, 30.12.1999, p. 10, as last amended by Regulation

1421/2004 (OJ L 260, 6.8.2004, p. 1).

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(6)

(7)

(8)

In the light of the World Trade Organisation (WTO)
Agreement on Agriculture (1),
this Regulation should
not exempt export aid or aid favouring domestic over
imported products. Member States are under an obli-
gation to refrain from granting any support contrary to
the commitments contained in that Agreement. Aid
towards
the cost of participating in trade fairs, or
towards studies or consultancy services needed for the
launch of a new or existing product on a new market,
does not normally constitute export aid. The European
Court of Justice in its judgment of 19 September 2002
establishes that, once the Community has legislated for
the establishment of a common organisation of
the
market in a given sector of agriculture, Member States
are under an obligation to refrain from taking any
measure which might undermine or create exceptions
to it (2). This principle also applies
in the fisheries
sector. For
this Regulation should not
apply to aid the amount of which is fixed on the basis
of price or quantity of products put on the market.

reason,

this

In the light of the Commission’s experience,
it can be
affirmed that aid not exceeding a ceiling of EUR 3 000
per beneficiary over any period of three years, where the
total amount of such aid granted to all enterprises over
three years remains below a ceiling to be set by the
Commission at around 0,3 % of the annual agricultural
output or of the fisheries output, does not affect trade
between Member States and/or does not distort or
threaten to distort competition and therefore does not
fall under Article 87(1) of the Treaty. The three-year
period should be mobile, so that for each new grant of
de minimis aid, the total amount of such aid granted
during the previous three years needs to be determined.
The de minimis aid should be considered to be granted at
the moment when the legal right to receive the aid is
conferred on the beneficiary. The de minimis rule is
without prejudice to the possibility that enterprises may
receive, for the same project, State aid authorised by the
Commission or covered by a group exemption Regu-
lation.

of the State aid rules, the market rates for the purposes
of this Regulation should be deemed to be the reference
rates, provided that, in the case of a soft loan, the loan is
backed by normal
involve
should be those
abnormal
which are periodically fixed by the Commission on the
basis of objective criteria and published in the Official
Journal of the European Union and on the Internet.

risk. The reference rates

security and does not

(9)

the overall

The Commission has a duty to ensure that State aid rules
are complied with, and in particular that aid granted
under the de minimis rules adheres to the conditions
thereof.
In accordance with the cooperation principle
laid down in Article 10 of the Treaty, Member States
should facilitate the achievement of this task by estab-
lishing the necessary machinery to ensure that the total
amount of aid, granted under the de minimis rule, does
not exceed either the ceiling of EUR 3 000 per bene-
ficiary or
the
Commission on the basis of the value of agricultural or
fishery output per Member State over a three-year period.
To that end, it is appropriate that Member States, when
granting a de minimis aid, should inform the enterprise
concerned of the de minimis character of the aid, receive
information about other de minimis aid received
full
during the previous three years, and carefully check
that the de minimis ceilings will not be exceeded by the
new de minimis aid. Alternatively, compliance with the
ceilings may also be ensured by means of a central
register.

established by

ceilings

the frequency with which it

(10) Having regard to the Commission’s experience and in
is generally
particular
necessary to revise State aid policy, it is appropriate to
limit the period of application of this Regulation. Should
this Regulation expire without being extended, Member
States should have an adjustment period of six months
with regard to de minimis aid schemes which were
covered by it. For the sake of legal certainty, it is appro-
priate to clarify the effect of
this Regulation on aid
granted before its entry into force,

In the interest of transparency, equal treatment and the
proper application of the de minimis ceilings, it is appro-
priate that Member States should apply the same method
of calculation. In order to facilitate this calculation and in
accordance with Regulation EC No 69/2001, it is appro-
priate that aid amounts not taking the form of a cash
converted into their gross grant
grant
should be
equivalent. Calculation of
the grant equivalent of aid
payable in several instalments, and calculation of aid in
the form of a soft
loan, requires the use of market
interest rates prevailing at the time of grant. With a
view to a uniform, transparent and simple application

HAS ADOPTED THIS REGULATION:

Article 1

Scope

This Regulation applies to aid granted to enterprises in the
agriculture or fisheries sectors, with the exception of:

(1) OJ L 336, 23.12.1994, p. 22.
(2) Case C-113/2000 Spain v./Commission, [2002] ECR 2002 I-7601,

point 73.

(a) aid the amount of which is fixed on the basis of price or

quantity of products put on the market,

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(b) aid to export-related activities, namely aid directly linked to
the quantities exported, to the establishment and operation
of a distribution network or to other current expenditure
linked to export activity,

The cumulative amount thus granted to various enterprises in
the agriculture sector shall not exceed the value per Member
State set out in Annex I, over any three-year period.

(c) aid contingent upon the use of domestic over imported

goods.

The cumulative amount of aid granted to various enterprises in
the fisheries sector shall not exceed the value set out per
Member State in Annex II, over any three-year period.

Article 2

Definitions

For the purpose of this Regulation:

1.

‘enterprises in the agriculture sector’ means enterprises active
in the production, processing and marketing of agricultural
products,

2.

‘agricultural product’ means the products listed in Annex I of
the Treaty, except fisheries products as defined in point (5),

3.

‘processing of an agricultural product’ means an operation
performed on an agricultural product where the product
resulting from the operation is also an agricultural product.

4.

‘enterprises in the fisheries sector’ means enterprises active in
the production, processing and marketing of
fisheries
products,

5.

‘fisheries products’ means both products caught at sea or in
inland waters and the products of aquaculture listed in
Article 1 of Council Regulation (EC) No 104/2000 (1),

6.

‘processing and marketing of a fisheries product’ means all
treatment, production and
operations,
distribution, performed between the time of
landing or
harvesting and the end-product stage.

including handling,

Article 3

De minimis aid

1.
Aid measures shall be deemed not to meet all the criteria
of Article 87(1) of the Treaty and shall therefore be exempt
from the notification requirement of Article 88(3) of the Treaty,
if they fulfil the conditions laid down in paragraphs 2 and 3.

The total de minimis aid granted to any one enterprise shall
2.
not exceed EUR 3 000 over any period of three years. This
ceiling shall apply irrespective of the form of the aid or the
objective pursued.

(1) OJ L 17, 21.1.2000, p. 22.

figures used shall be gross,

The ceilings in paragraph 2 shall be expressed as a cash
3.
grant. All
is, before any
deduction for direct taxation. Where aid is awarded in a form
other than a grant, the aid amount shall be the gross grant
equivalent of the aid.

that

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

Article 4

Cumulation and monitoring

it shall

1. Where a Member State grants de minimis aid to an
inform the enterprise about the de minimis
enterprise,
character of the aid and obtain from the enterprise concerned
full information about other de minimis aid received during the
previous three years.

The Member State may only grant the new de minimis aid after
having checked that this will not raise the total amount of de
minimis aid received during the relevant three-year period to a
level above either of the ceilings set out in Article 3(2).

2. Where a Member State has set up a central register of de
minimis aid for agriculture and fisheries, respectively, containing
complete information on all de minimis aid falling within the
scope of this Regulation and granted by any authority within
that Member State, the requirement in the first subparagraph of
paragraph 1 shall no longer apply once the register covers a
three-year period.

the conditions of

3. Member States shall record and compile all the infor-
mation regarding the application of
this Regulation. Such
records shall contain all information necessary to demonstrate
this Regulation have been fulfilled.
that
Records regarding an individual de minimis aid shall be main-
tained for 10 years from the date on which the aid was granted,
and the records regarding a de minimis aid scheme for 10 years
from the date on which the last individual aid was granted
under such scheme.

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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 that
the Commission considers necessary for
assessing whether the conditions of this Regulation have been
complied with, in particular the total amount of de minimis aid
received by any enterprise and by the agriculture or fisheries
sector of the Member State concerned.

Aid schemes falling under this Regulation shall continue
2.
to benefit from it during an adjustment period of six months
following the date provided for in the second paragraph of
Article 6.

During the adjustment period, the schemes may continue to be
applied under the conditions of this Regulation.

Article 5

Transitional provisions

1.
This Regulation shall apply to aid granted before its entry
into force, if it fulfils all the conditions laid down in Articles 1
and 3. Any aid which does not fulfil those conditions shall be
assessed by the Commission in accordance with the relevant
frameworks, guidelines, communications and notices.

Article 6

Entry into force and applicability

This Regulation shall enter into force on 1 January 2005.

It shall expire on 31 December 2008.

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

Done at Brussels, 6 October 2004.

For the Commission

Franz FISCHLER
Member of the Commission

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ANNEX 1

Cumulative amounts for agriculture per Member State as referred to in Article 3 (2):

(in EUR)

BE

DK

DE

EL

ES

FR

IE

IT

LU

NL

AT

PT

FI

SE

UK

CZ

EE

CY

LV

LT

HU

MT

PL

SI

SK

22 077 000

27 294 000

133 470 000

34 965 000

106 755 000

195 216 000

17 637 000

130 164 000

789 000

62 232 000

17 253 000

17 832 000

11 928 000

13 689 000

72 357 000

9 696 000

1 266 000

1 871 100

1 686 000

3 543 000

16 980 000

474 000

44 895 000

3 018 000

4 566 000

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ANNEX II

Cumulative amounts for fisheries per Member State as referred to in Article 3(2):

(in EUR)

BE

DK

DE

EL

ES

FR

IE

IT

LU

NL

AT

PT

FI

SE

UK

CZ

EE

CY

LV

LT

HU

MT

PL

SI

SK

1 368 900

6 341 400

7 287 000

2 036 370

15 272 100

11 073 300

1 944 000

9 413 400

0

3 548 100

114 000

2 703 300

460 200

1 557 900

12 651 900

169 200

407 400

123 000

510 300

906 000

144 180

21 000

1 652 100

21 900

86 100