Invitation to submit comments on the draft Commission Regulation on the application of Articles 87 and 88 of the EC Treaty to de minimis aid
Date: 2006-11-14
Institutions: European Commission
Subjects: EU Member State, State aid, aid system, aid to agriculture, exchange of information, fishing industry

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Invitation to submit comments on the draft Commission Regulation on the application of Articles
87 and 88 of the EC Treaty to de minimis aid

(2006/C 276/07)

Interested parties may submit their comments within one month of the date of publication of this draft
Regulation to:

European Commission
Directorate-General for Fisheries and Maritime Affairs
DG FISH-D3 (Legal issues)
rue Joseph II, 99
B-1049 Brussels
Fax: (32-2) 295 19 42
E-mail: fish-aidesdetat@ec.europa.eu

The text will also be available on the following website:

http://ec.europa.eu/fisheries/legislation/state_aid_en.htm

Draft Regulation on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the
fisheries sector and amending Regulation (EC) No 1860/2004

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

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:

(1)

(2)

(3)

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

On the basis of that Regulation, the Commission adopted Regulation (EC) No 69/2001 of 12
January 2001 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid (3), which
sets a ceiling of EUR 100 000 per beneficiary over a period of three years. Originally that Regulation
did not apply to the agriculture, fisheries and aquaculture and transport sectors, in view of the
special rules which apply in those sectors.

As regards the agriculture and fisheries sector, 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 sector (4) established a specific ceiling of EUR 3 000 per beneficiary per
three-year period to apply to those sectors, as in the light of the experiences acquired by the
Commission, it could be affirmed that very low levels of aid granted in those sectors do not fulfil
the criteria of Article 87(1) of the Treaty, provided that certain conditions are met. This is the case
were both the amount of aid received by individual producers remains small, and the overall level of
aid granted to these sectors does not go above a small percentage of the value of production;

(1) OJ L 142, 14.5.1998, p. 1.
(2) OJ C …
(3) OJ L 10, 13.1.2001, p. 30.
(4) 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 sector, OJ L 325, 28.10.2004, p. 4.

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(4)

(5)

(6)

(7)

(8)

(9)

Owing to changed economic circumstances and in the light of the experiences gained in applying
the existing de minimis rules, changes to those rules have been deemed necessary. For that reason it
has recently been proposed to increase the general de minimis ceiling laid down in Regulation (EC)
No 69/2001 from EUR 100 000 to EUR 200 000; to include the transport sector in the scope of
that Regulation, and to extend the application of the Regulation also the sector concerning the
processing and marketing of agricultural products.

Recent experience in applying the rules on State aid to the fisheries sector, and in particular the de
minimis ceiling set in Regulation (EC) No 1860/2004 and the Guidelines for the examination of
State aid to fisheries and aquaculture (1) has shown that the risk of distortion of competition by de
minimis aid is lower than was projected in 2004.

This Regulation should not exempt export aid or aid favouring domestic over imported products. In
addition, the Court of Justice of the European Communities, in its judgement of 19 September
2002, established that, once the Community had legislated for the establishment of a common orga-
nisation of the market in a given agricultural sector, Member States are under an obligation to
refrain from taking any measure which might undermines or create exceptions to it (2). This prin-
ciple also applies in the fisheries sector. For this reason, 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. Moreover
this Regulation should not apply to aid financing the establishment and operation of a distribution
network in other Member States of the Community. Aid towards the costs of participating in trade
fairs, or of studies or consultancy services needed for the launch of a new or existing product on a
new market does normally not constitute export aid.

In the light of the experience gained by the Commission, aid to undertakings in the fisheries sector
not exceeding EUR 30 000 per beneficiary over any three-year period may be deemed not to affect
trade between Member States and/or not to distort or threaten to distort competition where the
total amount of such aid granted to all undertakings in the fisheries sector over three years is below
a ceiling of around 2,5 % of the annual fisheries output, and it therefore does not fall under Article
87(1) of the Treaty. The years to take into account for this purpose are the fiscal years as used for
fiscal purposes in the Member State concerned. The relevant period of three years should be assessed
on a rolling basis, so that for each new grant of de minimis aid, the total amount of such aid granted
in the fiscal year concerned, as well as during the previous two fiscal years needs to be determined.

Consistent with the principles governing aid falling within Article 87 (1) EC, 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 under the applicable national regime. The de minimis rule is without prejudice to the
possibility that undertakings may receive State aid authorised by the Commission or covered by a
group exemption Regulation.

Having regard to the objectives of the common fisheries policy, aid serving to increase fishing capa-
city and aid granted for the construction or purchase of fishing vessels should not fall within the
scope of this Regulation, except for aid for modernisation over the main deck as referred to in
Article 11 of Council Regulation (EC) No 2371/2002 of 20 December 2002 on the conservation
and sustainable exploitation of fisheries resources under the Common Fisheries Policy (3).

(10)

For the purpose of transparency, equal treatment and the proper application of the de minimis
ceiling, it is appropriate 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 appropriate
that aid amounts not taking the form of a cash grant should be converted into their gross grant
equivalent. [Moreover, to ensure effective monitoring, this Regulation should only apply to aid

(1) OJ C 229, 14.9.2004 p. 5.
(2) Case C-113/2000 Spain v./Commission, [2002] ECR 2002 I-7601, point 73.
(3) Regulation (EC) No 2371/2002 (OJ L 358, 31.12.2002, p. 59).

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measures which are transparent in that the value of the aid can readily be quantified.] Calculation of
the grant equivalent of transparent types of aid other than grants payable in several instalments
requires the use of market interest rates prevailing at the time of granting the aid. With a view to a
uniform, transparent and simple application of the State aid rules, the market rates for the purposes
of this Regulation should be deemed to be the reference rates. The reference rates should be those
which are periodically fixed by the Commission on the basis of objective criteria and published in
the Official Journal of the European Union or on the Internet.

(11)

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 Article
10 of the Treaty, Member States should facilitate the achievement of this task by establishing the
necessary machinery to ensure that the total amount of aid, granted under the de minimis rules, does
not exceed either the ceiling of EUR 30,000 per beneficiary or the overall ceiling established by the
Commission on the basis of the value of the 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 undertaking concerned of the de minimis character of the aid, receive full information
about other de minimis aid received 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 using a central register.

(12)

For reasons of clarity and as the ceiling for de minimis aid for the fisheries sector thus differs from
the ceiling for de minimis aid to the agriculture sector, a specific regulation applicable only to the
fisheries sector should be adopted and Regulation (EC) No 1860/2004 should be amended accord-
ingly.

(13) Having regard to the Commission's experience and in particular the frequency with which it is
generally necessary to revise State aid policy, and in particular having regard to the period of appli-
cation of Regulation (EC) No 69/2001 and Regulation (EC) No 1860/2004, it is appropriate that the
period of application of this Regulation be limited until 31 December 2013. Should this Regulation
expire without being extended, Member States should have an adjustment period of six months with
regard to de minimis aid covered by it. For the sake of legal certainty, it is appropriate to clarify the
effect of the Regulation on aid granted before its entry into force.

HAS ADOPTED THIS REGULATION:

Article 1

Scope

This Regulation applies to aid granted to undertakings in the fisheries sector, with the exception of:

(a) aid the amount of which is fixed on the basis of price or quantity of products put on the market;

(b) aid to export-related activities, namely aid directly linked to the quantities exported and aid contingent

upon the use of domestic over imported goods;

(c) the establishment and operation of a distribution network or to other current expenditure linked to the

export activity of Member States;

(d) aid serving to increase fishing capacity, expressed in terms of tonnage or power, as defined in Article
3(n) of Council Regulation (EC) No 2371/2002, unless it concerns aid for modernisation over the main
deck as referred to in Article 11(5) of that Regulation,

(e) aid for the purchase or construction of fishing vessels.

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Article 2

Definitions

1.

For the purposes of this Regulation:

(a) ‘undertakings in the fisheries sector’ means undertakings active in the production, processing and

marketing of fisheries products;

(b) ‘fisheries products’ means the products defined in Article 1 of Council Regulation (EC) No 104/2000 (1)

(c) ‘processing and marketing’ means all operations, including handling, treatment, production and distri-

bution, performed between the time of landing or harvesting and the end-product stage.

2.
[This Regulation shall only apply to aid awarded in the form of grants and other types of aid in
respect of which it is possible to calculate precisely the gross grant equivalent of the aid ex ante without
need to undertake a risk assessment.

Aid compromised in loans, guarantees, risk capital measures and capital injections shall not be treated as
de minimis aid, unless the total value of the transaction in question does not exceed the ceiling, as laid
down in Article 3(2).]

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 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.

2.
The total de minimis aid granted to any one undertaking shall not exceed EUR 30 000 over any
period of three fiscal years. This ceiling shall apply irrespective of the form of the aid or the objective
pursued. The period shall be determined by reference to the fiscal years used in the Member State
concerned

When the overall amount exceeds this ceiling, that aid cannot benefit from this Regulation, even for a frac-
tion not exceeding that ceiling, either at the time it is granted or in respect of a later period.

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

3.
The ceilings in paragraph 2 shall be expressed as a cash grant. All figures used shall be gross, that is,
before any deduction of tax or other charge. Where aid is awarded in a form other than a grant, the aid
amount shall be the gross grant equivalent of the aid.

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 gross equivalent shall be the reference
rate applicable at the time of the grant.

Article 4

Cumulation and monitoring

1. Where a Member State grants de minimis aid to an undertaking, it shall inform the undertaking in
writing about the amount of the aid (expressed in gross equivalent) and about the de minimis character,
making express reference to this Regulation and citing its title and publication reference in the Official
Journal of the European Union. It shall also obtain from the undertaking concerned a written declaration
about any other de minimis aid [or other State aid] received during the previous two fiscal years.

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

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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 period of three years 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 fisheries containing complete
information on all de minimis aid granted by any authority within that Member State, the first subparagraph
of paragraph 1 shall no longer apply once the register covers a period of three fiscal years.

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

On a 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, and in particular the total amount of de minimis aid received by any undertaking and by the
fisheries sector of the Member State concerned.

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, 2, 3 and 4. Any aid which does not fulfil those conditions shall be assessed by the
Commission in accordance with the relevant frameworks, guidelines, communications and notices.

2.
Any de minimis aid granted between 1 January 2005 and six months after entry into force of this
Regulation, which fulfils the conditions of Regulation (EC) No 1860/2004 as applicable to the fisheries
sector until the date of entry into force of this Regulation, 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.

At the end of the period of validity of this Regulation, any de minimis aid which fulfils the conditions

3.
of this Regulation may be validly implemented for a period of 6 months.

Article 6

Amendment

Regulation (EC) No 1860/2004 shall be amended as follows:

(a) In the title, the words ‘and fisheries sectors’ are replaced by ‘sector’.

(b) In Article 1, the words ‘the agriculture or fisheries sectors’ are replaced by ‘the agriculture sector’.

(c) In Article 2:

(i) in point (2), the words ‘except fisheries products as defined in point (5)’ are replaced by ‘except fish-

eries products as defined in Article 1 of Council Regulation (EC) No 104/2000(10)’;

(ii) points 4, 5 and 6 are deleted.

(d) In Article 3(2), the third subparagraph is deleted.

(e) In Article 4(2), the words ‘and fisheries, respectively’ are deleted.

(f) In the second subparagraph of Article 4(3), the words ‘or fisheries’ are deleted.

(g) Annex II is deleted.

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Article 7

Entry into force and applicability

This Regulation shall enter into force on the seventh day following that of its publication in the Official
Journal of the European Union.

Articles 1 to 5 shall expire on 31 December 2013.

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

Done at Brussels, …

For the Commission

…

Member of the Commission

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

ANNEX

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

11 407 500 EUR

52 845 000 EUR

60 725 000 EUR

16 969 475 EUR

127 267 500 EUR

92 277 500 EUR

16 200 000 EUR

78 445 000 EUR

0 EUR

29 567 500 EUR

928 333 EUR

22 527 500 EUR

3 835 000 EUR

12 982 500 EUR

105 432 500 EUR

1 410 000 EUR

3 395 000 EUR

1 025 000 EUR

4 252 500 EUR

7 550 000 EUR

1 201 500 EUR

175 000 EUR

13 767 500 EUR

182 500 EUR

717 500 EUR