2006/641/EC: Commission Decision of 21 December 2005 on State Aid C 26/05 (ex N 580/B/03) under the programme submitted by Sicily as part of the assistance scheme for growing citrus fruit in Italy (notified under document number C(2005) 5354)
Date: 2005-12-21
Institutions: European Commission
Subjects: Sicily, State aid, agronomic research, aid to agriculture, citrus fruit, control of State aid, fruit-growing

27.9.2006

EN

Official Journal of the European Union

L 268/25

COMMISSION DECISION

of 21 December 2005

on State Aid C 26/05 (ex N 580/B/03) under the programme submitted by Sicily as part of the
assistance scheme for growing citrus fruit in Italy

(notified under document number C(2005) 5354)

(Only the Italian version is authentic)

(2006/641/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(7)

Having regard to the Treaty establishing the European Commu-
nity, and in particular the first subparagraph of Article 88(2)
thereof,

Having called on interested parties to submit their comments
pursuant to those provisions (1),

Whereas:

(1)

(2)

(3)

(4)

I.

PROCEDURE

By letter dated 15 December 2003,
registered on
16 December 2003, the Italian Permanent Representation
to the European Union notified the Commission of a
number of assistance measures
Italian citrus-fruit
cultivation in accordance with Article 88(3) of the Treaty.

for

By letter dated 20 January 2004, the Commission requested
additional information on these measures from the Italian
authorities.

By letter dated 30 April 2004, the Commission, having
received no response to its request for information of
20 January 2004, sent a reminder to the Italian authorities.

By letter dated 24 May 2004, registered on 25 May 2004,
the Italian Permanent Representation to the European
Union sent
the Commission a letter from the Italian
authorities in which they requested an extension of the
deadline for a reply to the questions asked in the letter of
20 January 2004.

(5) An extension was granted to the Italian authorities by letter

dated 3 June 2004.

(6)

By letter dated 30 June 2004, registered on 2 July 2004, the
Italian Permanent Representation to the European Union
sent the Commission the additional information which the
Italian authorities had been requested to provide in the
letter dated 20 January 2004.

The above-mentioned assistance consisted of an additional
budget allocation for funding the measures approved under
aid scheme N 313/01 (2) but, as indicated in the notifica-
tion, part of that budget was to be used to finance measures
to control citrus tristeza virus which had not been examined
under aid scheme N 313/01. The Commission, having
established that it had all the information necessary to
examine the funding of the measures approved under that
aid scheme N 313/01 but
it still did not have
information on the measures to control citrus tristeza virus,
decided, so as not to hinder the funding of the measures
already approved, to divide the file into two parts: Part A
for the funding referred to above and Part B for the
measures to control citrus tristeza virus.

that

(8)

Part A of the file was approved by the Commission (3).

(9)

By letter dated 12 August 2004, the Commission asked the
Italian authorities for additional information on part B of
the file.

(10) By letter dated 27 September 2004,

registered on
29 September 2004, the Italian Permanent Representation
to the European Union sent the Commission the additional
Italian authorities had been
information which the
requested to provide in its letter dated 12 August 2004.

(11) As the information provided by the Italian authorities was
incomplete, the Commission requested a number of further
details by letter dated 11 October 2004.

(12) By letter of 25 October 2004, registered on 27 October
2004, and by letter of 9 November 2004, registered on
15 November 2004, the Italian Permanent Representation
to the European Union sent the Commission the further
details which the Italian authorities had been requested to
provide in the letter dated 11 October 2004.

(13) As the information provided by the Italian authorities was
still incomplete, the Commission again requested a number
of further details by letter dated 23 November 2004.

(1) OJ C 256, 15.10.2005, p. 18.

(2) See letter SG(2003) D/228423 dated 7.2.2003.
(3) See letter SG(2004)-Greffe D/203509 dated 13.8.2004.

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(14)

In the meantime, by letter dated 19 November 2004,
registered on 24 November 2004, the Italian Permanent
Representation to the European Union sent the Commis-
sion a letter from the Italian authorities to which the tristeza
control programme for Campania was annexed.

the

(21) By letter dated 28 February 2005, registered on 1 March
2005,
Italian Permanent Representation to the
European Union sent the Commission a letter from the
Italian authorities to which the tristeza control programme
for Sicily was annexed.

(15) By letter dated 19 December 2004, the Commission drew
the Italian authorities’ attention to the fact that, as the file
related to a number of regions, the compatibility of the
planned measures would be examined when the tristeza
control plans of all the regions had been received.

(16) By letter dated 16 December 2004,

registered on
20 December 2004, the Italian Permanent Representation
to the European Union sent the Commission a letter from
the Italian authorities requesting that each programme be
examined as soon as it had been sent in.

(22)

In the course of March 2005, despite what had been agreed
at the meeting on 25 January 2005, the Italian authorities
repeatedly requested a separate decision on the tristeza
control programme submitted by Calabria.

(23) The Commission decided to divide file N 580/03 once
more and for one last time to create a part C relating to the
tristeza control programme submitted by Calabria. At the
same time, by letter dated 5 April 2005, it sent a new
request for further information on the remainder of part B
of the file, in other words the funding of the tristeza control
measures provided for in the programmes for Campania,
Basilicata and Sicily.

the

(17) By letter dated 10 January 2005, registered on 11 January
2005,
Italian Permanent Representation to the
European Union sent the Commission a letter from the
Italian authorities to which the tristeza control programme
for Basilicata was annexed.

(24) By letter dated 13 May 2005, registered on 18 May 2005,
the Italian Permanent Representation to the European
information
Union sent the Commission the additional
which the Italian authorities had been requested to provide
in the letter dated 5 April 2005, but only for
the
programmes in Campania and Basilicata.

(18)

the
In response, by letter dated 19 January 2005,
Commission reminded the Italian authorities that, for the
sake of administrative simplification, one single decision
would be taken on the control programmes submitted and
that
the Italian authorities should indicate when they
thought that all the tristeza control programmes would be
submitted. This position was reiterated at a meeting with
the Italian authorities held on 25 January 2005, during
which it was finally confirmed that the latter would inform
the Commission when transmission of
control
programmes could be considered complete.

the

the

(19) By letter dated 26 January 2005, registered on 27 January
2005,
Italian Permanent Representation to the
European Union sent the Commission a letter from the
Italian authorities to which the tristeza control programme
for Calabria was annexed.

(25) By letter dated 10 June 2005, registered on 17 June 2005,
the Italian Permanent Representation to the European
information
Union sent the Commission the additional
requested in connection with the programme for Sicily in
the letter dated 5 April 2005 referred to above.

(26) By letter dated 22 July 2005 (4), the Commission informed
Italy of its decision not to raise any objections to the
Campania and Basilicata tristeza control programmes and
the prevention and technical assistance measures provided
for in the tristeza control programme for Sicily, and to
initiate the procedure under Article 88(2) of the EC Treaty
in respect of the research funding provided for in that
tristeza control programme.

(27) The Commission decision to initiate the procedure was
published in the Official Journal of the European Union (5).
The Commission called on interested parties to submit their
comments on the aid concerned.

the

(20) By letter dated 14 February 2005, registered on 15 February
2005,
Italian Permanent Representation to the
European Union sent the Commission a letter from the
Italian authorities requesting a decision on the measures
planned under the tristeza control programmes for Calabria,
Campania and Basilicata.

(28) The Commission did not receive any comments from

interested parties.

(4) See letter SG(2005)-Greffe D/203803 dated 22.7.2005.
(5) See footnote 1.

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II.

DESCRIPTION

d)

(29) The

tristeza control programme submitted by Sicily
provides for research to be carried out into the biological
and agronomic factors associated with outbreaks of the
disease.

(30) The budget forecast to fund these measures in full totals
€4 200 000,
to be transferred from national resources
governed by Decree No 25486 of 29 December 2003 and
Decree No 1090 of 14 July 2004. The duration of the
measures will depend on the analysis and publication of the
findings of the research.

III.

INITIATING THE PROCEDURE LAID DOWN IN

ARTICLE 88(2) OF THE TREATY

(31) The Commission initiated the procedure laid down for
control
funding the
programme submitted by Sicily as
it had concerns
regarding compliance with the applicable rules governing
State aid for research and development.

research aspect of

tristeza

the

(32) Under these rules, research in the agricultural sector may be
funded in full only if the four conditions laid down in the
1998 Commission Communication amending the Com-
munity framework for State aid for research and develop-
ment (‘1998 rules’) (6) are met.

the aid fulfils the conditions laid down in Annex II,
‘Domestic support: the basis for exemption from the
reduction commitments’,
to the Agreement on
agriculture concluded during the Uruguay Round of
last
multilateral
conditions, funding of research should not give rise
to price support for producers and should not imply
direct payments to producers or processors).

trade negotiations (7)

these

(for

(34) On the basis of the information available to the Commis-
sion, it was not in a position to establish full compliance
with these four conditions, given that the Italian authorities
had not given any commitments, either on equal conditions
for accessing the findings of the research or on compliance
with the requirements under Annex II of the Agreement on
agriculture concluded during the Uruguay Round of
trade negotiations (there was evidence of
multilateral
compliance with other requirements).

(35) Accordingly, the Commission had to examine the funding
of research under the tristeza control programme in the
the Community rules governing State aid for
light of
research and development (8). On the basis of
the
information available to the Commission, it was not in a
position even to ascertain whether the planned funding
complied with these rules. Hence the Commission could
merely express concern as to the eligibility of aid forecast to
fund the planned research work.

(33) The four conditions are as follows:

IV.

COMMENTS FROM THE ITALIAN AUTHORITIES

a)

b)

interest to the particular
the project is of general
sector
subsector) concerned, without unduly
distorting competition in other sectors (or subsectors);

(or

least national distribution and not

information is published in appropriate journals, with
at
limited to
members of any particular organisation, to ensure that
any operator potentially interested in the work can
readily be aware that it is or has been carried out, and
that the results are or will be made available, on
request,
to any interested party. This information
should be published on a date not later than any
information given directly to members of individual
organisations;

c)

the work are made available for
the results of
exploitation by all
including the
beneficiary of the aid, on an equal basis in terms both
of cost and of time;

interested parties,

(36) By letter dated 16 September 2005,

registered on
20 September 2005, the Italian Permanent Representation
to the European Union sent the Commission the comments
from the Italian authorities following initiation of
the
procedure under Article 88(2) of the Treaty on the funding
of research planned under the tristeza control programme
submitted by Sicily.

(37)

In their comments, the Italian authorities specified that the
findings of the research would be made available to all
interested parties under equal conditions in terms of cost
and time. They also pointed out that the requirements
under Annex II to the Agreement on agriculture concluded
during the Uruguay Round of multilateral trade negoti-
ations would be respected since neither producers nor
processors would be paid any form of direct aid and the
measures would not have the effect of price support. Given
that the programme concerned fundamental research,
it
would not directly affect agricultural or agri-food produc-
tion.

(6) OJ C 48, 13.2.1998, p. 2.

(7) OJ L 336, 23.12.1994, p. 3.
(8) OJ C 45, 17.2.1996, p. 5.

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V.

ASSESSMENT

(38) According to Article 87(1) of the EC Treaty, any aid granted
by a Member State or through State resources in any form
whatsoever which distorts or threatens to distort competi-
tion by favouring certain undertakings or the production of
certain goods shall, in so far as it affects trade between
Member States, be incompatible with the common market.
The funding in question corresponds to this definition since
it concerns certain undertakings (citrus-growing under-
takings) and since it is such that it may affect trade, given
the important position occupied by Italy in agricultural
production (e.g.,
Italy produced the most
vegetables in the EU).

in 2003,

(39) However, in cases covered by Article 87(2) and (3) of the
to be

Treaty, some measures may enjoy derogations
considered compatible with the common market.

(40) The only possible derogation in this case, given the type of
scheme in question, is laid down in Article 87(3)(c) of the
Treaty, according to which aid may be
considered
compatible with the common market if it is found to
facilitate the development of certain economic activities or
of certain economic areas, where such aid does not
adversely affect trading conditions to an extent contrary
to the common interest.

(41)

(42)

In order for the derogation to be applicable, the measure in
question (funding research in full) must comply with the
four conditions laid down in the 1998 rules.

In the light of the clarification provided by the Italian
authorities in their comments submitted after initiation of
the procedure under Article 88(2) of the Treaty, it would
appear that the two conditions of the above-mentioned
communication with which compliance remained ques-
tionable will indeed be met.

(43) The Commission is therefore in a position to state that the
funding of research planned under the Sicilian tristeza
control programme will be implemented in line with the
applicable provisions of the above-mentioned communica-
tion.

VI.

CONCLUSION

(44) Since the Italian authorities have shown that the research
planned under the Sicilian tristeza control programme will
be funded in line with the applicable provisions contained
in the 1998 rules, the funding in question is eligible for the
derogation under Article 87(3)(c) as the aid is designed to
facilitate the development of certain economic activities or
of certain economic areas, where such aid does not
adversely affect trading conditions to an extent contrary
to the common interest,

HAS ADOPTED THIS DECISION:

Article 1

The research funding provided for in the citrus tristeza control
programme for Sicily is compatible with the common market.

Implementation of the aid is therefore authorised.

Article 2

This decision is addressed to the Italian Republic.

Done at Brussels, 21 December 2005.

For the Commission

Mariann FISCHER BOEL

Member of the Commission