Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid
Date: 2006-12-15
Institutions: European Commission
Subjects: State aid, aid to undertakings, application of EU law, control of State aid

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COMMISSION REGULATION (EC) No 1998/2006

of 15 December 2006
on the application of Articles 87 and 88 of the Treaty to de minimis aid

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

conditions laid down in Regulation (EC) No 69/2001 and
to replace that Regulation.

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 thereof,

Having published a draft of this Regulation (2),

After consulting the Advisory Committee on State aid,

Whereas:

(1)

(2)

Regulation (EC) No 994/98 empowers the Commission
to set out in a Regulation a threshold under which aid
measures are deemed not
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.

to meet all

The Commission has applied Articles 87 and 88 of the
in particular, clarified in numerous
Treaty and has,
decisions the notion of aid within the meaning of
Article 87(1) of the Treaty. The Commission has also
stated its policy with regard to a de minimis ceiling,
below which Article 87(1) can be considered not
to
initially in its notice on the de minimis rule for
apply,
State aid (3) and subsequently in Commission 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 (4). In the light of the experience gained in applying
the
that Regulation and in order to take account of
evolution of
in
inflation and gross domestic product
the Community up to and including 2006 and of the
likely developments through the period of validity of this
Regulation, it appears appropriate to revise some of the

(1) OJ L 142, 14.5.1998, p. 1.
(2) OJ C 137, 10.6.2006, p. 4.
(3) OJ C 68, 6.3.1996, p. 9.
(4) OJ L 10, 13.1.2001, p. 30.

(3)

(4)

it

activities

appropriate

liberalisation,

is no longer

In view of the special rules which apply in the sectors of
primary production of agricultural products, fisheries and
aquaculture and of the risk that smaller amounts of aid
than those set out in this Regulation could fulfil the
criteria of Article 87(1) of the Treaty in those sectors,
this Regulation should not apply to those sectors. Given
in particular the
the evolution of the transport sector,
following
restructuring of many transport
their
to
exclude the transport sector from the scope of the de
minimis Regulation. The scope of this Regulation should
the transport
therefore be extended to the whole of
sector. The general de minimis ceiling should however
be adapted in order to take account of
the average
small size of undertakings active in the road freight
and passengers transport sector. For the same reasons,
and also in view of the overcapacity of the sector and
of
transport policy as regards road
congestion and freight transports, aid for the acquisition
of
transport vehicles by undertakings
performing road freight transport for hire and reward
into question
should be excluded. This does not call
the Commission's favourable approach with regard to
State aid for cleaner and more environmentally friendly
vehicles in Community instruments other than this Regu-
lation. In view of Council Regulation (EC) No 1407/2002
of 23 July 2002 on State aid to the coal industry (5), this
Regulation should not apply to the coal sector.

the objectives of

road freight

to

the

should

the first sale,

Considering the similarities between the processing and
marketing of agricultural products, on the one hand, and
this
of non-agricultural products, on the other hand,
Regulation
and
processing
apply
marketing of agricultural products, provided that certain
conditions are met. Neither on-farm activities necessary
for preparing a product
such as
for
harvesting, cutting and threshing of cereals, packing of
eggs etc., nor the first sale to resellers or processors
should be considered as processing or marketing in this
respect. As from the entry into force of this Regulation,
aid granted in favour of undertakings active in the
processing or marketing of agricultural products should
no longer be subject to 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 (6). Regulation (EC)
No
amended
accordingly.

1860/2004

therefore

should

be

(5) OJ L 205, 2.8.2002, p. 1.
(6) OJ L 325, 28.10.2004, p. 4.

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(5)

(6)

(7)

(8)

(9)

The Court of Justice of the European Communities has
established 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. 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 purchased or put on the market.
Nor should it apply to de minimis support which is linked
to an obligation to share the aid with primary producers.

In particular,

This Regulation should not apply to de minimis export aid
or de minimis aid favouring domestic over imported
products.
should not apply to aid
it
financing the establishment and operation of a distri-
bution network in other countries. Aid towards the
cost 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 not normally
constitute export aid.

This Regulation should not apply to undertakings in
difficulty within the meaning of
the Community
guidelines on State aid for rescuing and restructuring
firms in difficulty (1) in view of the difficulties linked to
determining the gross grant equivalent of aid granted to
this type of undertakings.

In the light of the Commission's experience,
it can be
established that aid not exceeding a ceiling of EUR
200 000 over any period of three years 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. As regards under-
takings active in the road transport sector, this ceiling
should be set at EUR 100 000.

The years to take into account for this purpose are the
fiscal years as used for fiscal purposes by the undertaking
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
de minimis aid granted in the fiscal year concerned, as
well as during the previous two fiscal years, needs to be
determined. Aid granted by a Member State should be
taken into account for this purpose even when financed
entirely or partly by resources of Community origin. It
should not be possible for aid measures exceeding the de
minimis ceiling to be broken down into a number of

(1) OJ C 244, 1.10.2004, p. 2.

smaller parts in order to bring such parts within the
scope of this Regulation.

(10)

In accordance with the principles governing aid falling
within Article 87(1) of the Treaty, de minimis aid should
be considered to be granted at the moment the legal
right to receive the aid is conferred on the undertaking
under the applicable national legal regime.

(11)

(12)

(13)

In order to avoid circumvention of maximum aid inten-
sities provided in different Community instruments, de
minimis aid should not be cumulated with State aid in
respect of the same eligible costs if such cumulation
would result in an aid intensity exceeding that fixed in
the specific circumstances of each case by a block
exemption Regulation or Decision adopted by the
Commission.

In order

in several

For the purposes of transparency, equal treatment and
the de minimis ceiling, all
the correct application of
Member States should apply the same method of calcu-
lation.
to facilitate this calculation and in
accordance with the present practice of application of
the de minimis rule, aid amounts not taking the form
of a cash grant should be converted into their gross
grant equivalent. Calculation of the grant equivalent of
types of aid other than grants or of aid
transparent
payable
the use of
instalments
market interest rates prevailing at the time of granting
such aid. With a view to a uniform, transparent and
simple application of
the market
this Regulation should be
rates for the purposes of
deemed to be the reference rates 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. It may, however, be necessary to add
additional basis points on top of the floor rate in view of
the securities provided or the risk associated with the
beneficiary.

the State aid rules,

requires

For the purposes of transparency, equal treatment and
effective monitoring, this Regulation should apply only
to de minimis aid which is transparent. Transparent aid is
aid for which it is possible to calculate precisely the gross
grant equivalent ex ante without a need to undertake a
for
risk assessment. Such precise
rate
instance, be realised as
subsidies and capped tax exemptions. Aid comprised in
capital injections should not be considered as transparent
de minimis aid, unless the total amount of the public
than the de minimis ceiling. Aid
injection is
comprised in risk capital measures as referred to in the

calculation can,
interest

regards grants,

lower

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(14)

(15)

Community guidelines on State aid to promote risk
capital
investments in small and medium-sized enter-
prises (1) should not be considered as transparent de
minimis aid, unless the risk capital scheme concerned
provides capital only up to the de minimis ceiling to
each target undertaking. Aid comprised in loans should
be treated as transparent de minimis aid when the gross
grant equivalent has been calculated on the basis of
market interest rates prevailing at the time of grant.

This Regulation does not exclude the possibility that a
measure, adopted by a Member State, might not be
considered as State aid within the meaning of Article
87(1) of the Treaty on the basis of other grounds than
those set out in this Regulation, for instance, in the case
injections, because such measure has been
of capital
decided in conformity with the market investor principle.

of
It

loan underlying

in difficulty. This

ceiling based on the
individual

It is necessary to provide legal certainty for guarantee
schemes which do not have the potential
to affect
trade and distort competition and in respect of which
sufficient data is available to assess any potential effects
reliably. This Regulation should therefore transpose the
general de minimis ceiling of EUR 200 000 into a
guaranteed
guarantee-specific
such
the
amount
guarantee.
is appropriate to calculate this specific
ceiling using a methodology assessing the State aid
amount included in guarantee schemes covering loans
in favour of viable undertakings. The methodology and
the data used to calculate the guarantee-specific ceiling
should exclude undertakings in difficulty as referred to in
the Community guidelines on State aid for rescuing and
restructuring firms
specific ceiling
should therefore not apply to ad hoc individual aid
granted outside the scope of a guarantee scheme,
to
aid granted to undertakings in difficulty, or to guarantees
on underlying transactions not constituting a loan, such
as guarantees on equity transactions. The specific ceiling
should be determined on the basis of the fact that taking
account of a cap rate (net default rate) of 13 %, repre-
senting a worst case scenario for guarantee schemes in
the Community,
to EUR
guarantee
1 500 000 can be considered as having a gross grant
to the general de minimis ceiling.
equivalent
This amount should be reduced to EUR 750 000 as
regards undertakings active in the road transport sector.
Only guarantees covering up to 80 % of the underlying
loan should be covered by these specific ceilings. A
methodology accepted by the Commission following
notification of such methodology on the basis of a
Commission Regulation in the State aid area,
like
Commission Regulation (EC) No 1628/2006 of 24
October 2006 on the application of Articles 87 and
88 of the Treaty to national regional investment aid (2),
may also be used by Member States for the purpose of

amounting

identical

a

(1) OJ C 194, 18.8.2006, p. 2.
(2) OJ L 302, 1.11.2006, p. 29.

if

the

assessing the gross grant equivalent contained in a
guarantee,
explicitly
approved methodology
addresses
the type of guarantees and the type of
underlying transactions at stake in the context of the
application of the present Regulation.

(16) Upon notification by a Member State, the Commission
may examine whether an aid measure which does not
consist in a grant,
injection or
risk capital measure leads to a gross grant equivalent
that does not exceed the de minimis ceiling and could
therefore be covered by the provisions of this Regulation.

loan, guarantee, capital

(17)

The Commission has a duty to ensure that State aid rules
are respected 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 establishing the necessary
machinery in order to ensure that the total amount of de
minimis aid, granted to the same undertaking under the
de minimis rule, does not exceed the ceiling of EUR
200 000 over a period of
three fiscal years. To that
end, when granting a de minimis aid, Member States
should inform the undertaking
the
amount of the aid and of its de minimis character, by
referring to this Regulation. Moreover, prior to granting
such aid the Member State concerned should obtain from
the undertaking a declaration about other de minimis aid
received during the fiscal year concerned and the two
the de
previous fiscal years and carefully check that
minimis ceiling will not be exceeded by the new de
minimis aid. Alternatively it
should be possible to
the ceiling is respected by means of a
ensure that
in the case of guarantee schemes
central register, or,
set up by the European Investment Fund,
the latter
may establish itself a list of beneficiaries and require
the de
Member States to inform the beneficiaries of
minimis aid received.

concerned of

(18)

Regulation (EC) No 69/2001 expires on 31 December
2006. This Regulation should therefore apply from 1
January 2007. In view of the fact that Regulation (EC)
No 69/2001 did not apply to the transport sector, which
was not subject to de minimis so far; given also the very
limited de minimis amount applicable in the sector of
processing and marketing of agricultural products, and
provided that certain conditions are met, this Regulation
should apply to aid granted before its entry into force to
undertakings active in the transport sector, and in the
sector of processing and marketing of agricultural
products. Moreover,
aid granted in
accordance with Regulation (EC) No 69/2001 during
the period of application of
that Regulation should
remain unaffected by this Regulation.

any individual

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the frequency with which it

(19) Having regard to the Commission's experience and in
particular
is generally
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 covered by this Regulation,

(h) aid granted to undertakings in difficulty.

2.

For the purposes of this Regulation:

HAS ADOPTED THIS REGULATION:

(a)

‘agricultural products’ means products listed in Annex I to
the EC Treaty, with the exception of fishery products;

Article 1

Scope

This Regulation applies to aid granted to undertakings in

1.
all sectors, with the exception of:

(a) aid granted to undertakings active in the fishery and aqua-
culture sectors, as covered by Council Regulation (EC)
No 104/2000 (1);

(b) aid granted to undertakings

in the primary
production of agricultural products as listed in Annex I to
the Treaty;

active

(c) aid granted to undertakings active in the processing and
marketing of agricultural products as listed in Annex I to
the Treaty, in the following cases:

(i) when the amount of the aid is fixed on the basis of the
price or quantity of such products purchased from
primary producers or put on the market by the under-
takings concerned,

(ii) when the aid is conditional on being partly or entirely

passed on to primary producers;

(d) aid to export-related activities towards third countries or
Member States, namely aid directly linked to the quantities
exported, to the establishment and operation of a distri-
bution network or to other current expenditure linked to
the export activity;

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

goods;

(f) aid granted to undertakings active in the coal sector, as

defined in Regulation (EC) No 1407/2002;

(b) ‘processing of agricultural products’ means any operation on
an agricultural product resulting in a product which is also
an agricultural product, except on farm activities necessary
for preparing an animal or plant product for the first sale;

(c)

‘marketing of agricultural products’ means holding or
display with a view to sale, offering for sale, delivery or
any other manner of placing on the market, except the
first sale by a primary producer to resellers or processors
and any activity preparing a product for such first sale; a
sale by a primary producer to final consumers shall be
takes place in separate
considered as marketing if
premises reserved for that purpose.

it

Article 2

De minimis aid

Aid measures shall be deemed not to meet all the criteria
1.
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 to 5 of
this Article.

The total de minimis aid granted to any one undertaking
2.
shall not exceed EUR 200 000 over any period of three fiscal
years. The total de minimis aid granted to any one undertaking
active in the road transport sector shall not exceed EUR
100 000 over any period of three fiscal years. These ceilings
shall apply irrespective of the form of the de minimis aid or the
objective pursued and regardless of whether the aid granted by
the Member State is financed entirely or partly by resources of
Community origin. The period shall be determined by reference
to the fiscal years used by the undertaking in the Member State
concerned.

(g) aid for the acquisition of road freight transport vehicles
granted to undertakings performing road freight transport
for hire or reward;

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

When an overall aid amount provided under an aid measure
exceeds this ceiling, that aid amount cannot benefit from this
Regulation, even for a fraction not exceeding that ceiling. In
such a case, the benefit of this Regulation cannot be claimed for
this aid measure either at the time the aid is granted or at any
subsequent time.

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The ceiling laid down in paragraph 2 shall be expressed as
3.
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.

De minimis aid shall not be cumulated with State aid in
5.
respect of the same eligible costs if such cumulation would
result in an aid intensity exceeding that fixed in the specific
circumstances of each case by a block exemption Regulation
or Decision adopted by the Commission.

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

4.
This Regulation shall apply only to 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 assessement
(‘transparent aid’). In particular:

(a) Aid comprised in loans shall be treated as transparent de
minimis aid when the gross grant equivalent has been
calculated on the basis of market interest rates prevailing
at the time of the grant.

(b) Aid comprised in capital injections shall not be considered
as transparent de minimis aid, unless the total amount of the
public injection does not exceed the de minimis ceiling.

(c) Aid comprised in risk capital measures

shall not be
considered as transparent de minimis aid, unless the risk
capital scheme concerned provides capital only up to the
de minimis ceiling to each target undertaking.

does

such

under

scheme

(d) Individual aid provided under a guarantee scheme to under-
takings which are not undertakings in difficulty shall be
treated as transparent de minimis aid when the guaranteed
part of the underlying loan provided under such scheme
does not exceed EUR 1 500 000 per undertaking. Individual
aid provided under a guarantee scheme in favour of under-
takings active in the road transport sector which are not
undertakings in difficulty shall be treated as transparent de
minimis aid when the guaranteed part of the underlying loan
provided
exceed
EUR 750 000 per undertaking. If the guaranteed part of
the underlying loan only accounts for a given proportion
of this ceiling, the gross grant equivalent of that guarantee
shall be deemed to correspond to the same proportion of
the applicable ceiling laid down in Article 2(2). The
guarantee shall not exceed 80 % of the underlying loan.
Guarantee schemes shall also be considered as transparent
if (i) before the implementation of the scheme, the metho-
dology to calculate the gross grant equivalent of the guar-
this
antees has been accepted following notification of
methodology to the Commission under another Regulation
adopted by the Commission in the State aid area and (ii) the
approved methodology explicitly addresses the type of guar-
antees and the type of underlying transactions at stake in
the context of the application of this Regulation.

not

Article 3

Monitoring

1. Where a Member State intends to grant de minimis aid to
an undertaking, it shall inform that undertaking in writing of
the prospective amount of the aid (expressed as gross grant
its de minimis character, making express
equivalent) and of
reference to this Regulation, and citing its title and publication
reference in the Official Journal of the European Union. Where the
de minimis aid is granted to different undertakings on the basis
of a scheme and different amounts of individual aid are granted
to those undertakings under the scheme,
the Member State
concerned may choose to fulfil this obligation by informing
fixed sum corresponding to the
the undertakings of
maximum aid amount
In
the fixed sum shall be used for determining
such case,
whether the ceiling laid down in Article 2(2) is met. Prior to
granting the aid,
the Member State shall also obtain a
declaration from the undertaking concerned, in written or elec-
tronic form, about any other de minimis aid received during the
previous two fiscal years and the current fiscal year.

a
to be granted under the scheme.

The Member State shall only grant the new de minimis aid after
having checked that this will not raise the total amount of de
minimis aid received by the undertaking during the period
covering the fiscal year concerned, as well as the previous
two fiscal years in that Member State, to a level above the
ceiling laid down in Article 2(2).

2. Where a Member State has set up a central register of de
minimis aid containing complete information on all de minimis
aid granted by any authority within that Member State, the first
subparagraph of paragraph 1 shall cease to apply from the
moment the register covers a period of three years.

Where an aid is provided by a Member State on the basis of a
guarantee scheme providing a guarantee which is financed from
the EU budget under mandate through the European Investment
Fund, the first subparagraph of paragraph 1 of this Article may
cease to apply.

In such cases, the following monitoring system shall apply:

(a)

the European Investment Fund shall establish, on a yearly
interme-
basis, on the basis of information that financial
diaries must provide to the EIF, a list of beneficiaries of
aid and of the gross grant equivalent received by each of
them. The European Investment Fund shall send this infor-
mation to the Member State
concerned and to the
Commission; and

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(b) the Member State concerned shall disseminate that infor-
mation to the final beneficiaries within three months of
receipt of such information from the European Investment
Fund; and

(c)

the Member State concerned shall obtain a declaration from
the overall de minimis aid it has
each beneficiary that
received does not exceed the ceiling laid down in Article
2(2). In case the ceiling is exceeded with respect to one or
more beneficiaries, the Member State concerned shall ensure
that the aid measure leading to the ceiling being exceeded is
either notified to the Commission or recovered from the
beneficiary.

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
that the conditions of this Regulation have been complied with.
Records regarding individual de minimis aid shall be maintained
for 10 years from the date on which it was granted. Records
regarding a de minimis aid scheme shall be maintained for 10
years from the date on which the last individual aid was granted
under such scheme. 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 Commission
considers necessary for assessing whether the conditions of
in particular the
this Regulation have been complied with,
total amount of de minimis aid received by any undertaking.

the information that

Article 4

Amendment

(a)

in point 1, the words ‘processing and marketing’ are deleted;

(b) point 3 is deleted.

Article 5

Transitional measures

1.
This Regulation shall apply to aid granted before its entry
into force to undertakings active in the transport sector and
undertakings active in the processing and marketing of agri-
cultural products if the aid fulfils all the conditions laid down
in Articles 1 and 2. Any aid which does not
those
conditions will be assessed by the Commission in accordance
with the relevant frameworks, guidelines, communications and
notices.

fulfil

Any individual de minimis aid granted between 2 February
2.
2001 and 30 June 2007, which fulfils the conditions of Regu-
lation (EC) No 69/2001, 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.

3.
At the end of the period of validity of this Regulation, any
de minimis aid which fulfils the conditions of this Regulation
may be validly implemented for a further period of six months.

Article 6

Entry into force and period of validity

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

Article 2 of Regulation (EC) No 1860/2004 is amended as
follows:

It shall apply from 1 January 2007 until 31 December 2013.

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

Done at Brussels, 15 December 2006.

For the Commission

Neelie KROES
Member of the Commission