2008/626/EC: Commission Decision of 30 April 2008 State aid C 40/06 (ex NN 96/05) Loan assistance schemes implemented by the United Kingdom (notified under document number C(2008) 1612) (Text with EEA relevance)
Date: 2008-04-30
Institutions: European Commission
Subjects: State aid, United Kingdom, control of State aid, fishing industry, loan

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COMMISSION

COMMISSION DECISION

of 30 April 2008

State aid C 40/06 (ex NN 96/05)

Loan assistance schemes implemented by the United Kingdom

(notified under document number C(2008) 1612)

(Only the English version is authentic)

(Text with EEA relevance)

(2008/626/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Kingdom provided the Commission with further infor­
mation by letters dated 10 December 2004, 6 April
2005, 8 September 2005 and 31 January 2006.

Having regard to the Treaty
Community,
and in particular
Article 88(2) thereof,

establishing the European
subparagraph of
the

first

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having regard to Council Regulation (EC) No 659/1999 of
22 March 1999 laying down detailed rules for the application
of Article 93 of the EC Treaty (1), and in particular Article 7(2)
and (3) thereof,

Having called on interested third parties
comments pursuant to the provisions cited above (2),

to submit

their

Whereas:

I. PROCEDURE

(1)

By letter dated 15 June 2004,
the Commission was
informed by a citizen of the United Kingdom of aid
the public
granted by the Shetland Islands Council,
Islands of
authority
the United
Kingdom to the
sector, which possibly
concerned illegal State aid. By letters dated 24 August
2004, 4 February 2005, 11 May 2005 and 16 December
2005, the Commission requested the United Kingdom to
such aid. The United
provide

in the Shetlands
fisheries

information about

(1) OJ L 83, 27.3.1999, p. 1. Regulation as last amended by Regulation

(EC) No 1791/2006 (OJ L 363, 20.12.2006, p. 1).

(2) OJ C 292, 1.12.2006, p. 6.

(2)

(3)

(4)

(5)

By letter dated 13 September 2006, the Commission
the decision to
informed the United Kingdom of
initiate the procedure laid down in Article 88(2) of the
EC Treaty in respect of the aid. The United Kingdom
provided its comments on the aid by letter dated
16 October 2006. Following the requests from the
Commission dated 31 January 2007 and 5 February
2008, additional
information was provided by letters
dated 4 September 2007 and 27 February 2008.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union on
30 November 2006 (3). The Commission invited any
interested parties to submit their comments on the aid.
The Commission received no comments from interested
parties.

II. DETAILED DESCRIPTION

the scope of

The Shetland Islands Council made payments to the
two general aid
fisheries sector under
measures named ‘Aid to the Fish Catching and Processing
Industry’ and ‘Aid to the Fish Farming Industry’, which
actually consisted of
types of aid
schemes. Amongst
these schemes were the so-called
Loan assistance schemes (‘the scheme’).

several different

Aid has been granted to salmon farmers, by way of loan
assistance granted through the Fish Farming Association
and to fish processors, by way of loan assistance granted
through the Fish Processors' Association.

(3) OJ C 292, 1.12.2006, p. 6.

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(6)

(7)

(8)

(9)

Salmon Farming Loan Assistance

The Salmon Farming Loan Assistance was established in
2000 for the purpose of providing working capital loans
to individual salmon farming companies to on-grow fish
to a harvestable size. The loans granted under the scheme
vary from GBP 87 000 to GBP 250 000, those amounts
representing a maximum of 75 % of the costs of buying
smolts (young salmon). The total amount of the loans
granted is GBP 3 477 130.

(10) As regards the compatibility of the loans, as State aid,
with the Guidelines for the examination of State aid to
fisheries and aquaculture applicable at the time the aid
was granted, the Commission doubted that the loans
loans and therefore
could be considered commercial
considered them to be State aid. As regards the compati­
bility of
the
Commission moreover doubted that, on the basis of
the information available, they could be considered to
comply with the conditions of the respective Guidelines
for the examination of State aid to fisheries and aqua­
culture, applicable at the respective times of granting the
aid.

the loans with the common market,

The loans were made to companies that could demon­
strate viability through the production of an acceptable
business plan and financial projections for a period
covering at least three years. The loans were subject to
interest at rates generally corresponding to the applicable
UK base rate plus 2 %. In order to secure the loan, it was
granted under the condition that the lender took the
‘right of title’ on the smolts, thus securing the loan on
the basis of the sale value of the adult fish.

III. COMMENTS FROM THE UNITED KINGDOM

(11)

In its letters dated 16 October 2006, 4 September 2007
and 27 February 2008, the United Kingdom provided
the
further
schemes.

information on the loans granted under

Loan scheme for fish processing

Under the Loan scheme for fish processing, five loans
were granted during the period from 1996 to 2002.
The loans varied from GBP 73 000 to GBP 200 000,
with a total of GBP 698 300. The loans were made to
companies that during the period of the loan undertook
to provide professionally audited accounts, to work to
the relevant national and Community standards on
hygiene, health and safety, and to be a member of the
Shetland Fish Processors' Association.

Grounds for initiating the procedure

the

The Commission considered that it could not be estab­
lished from the information available whether the loans
under
conditions
schemes were granted under
acceptable to normal private lenders on the market. As
the loans appeared to have been granted under more
circumstances or with more
favourable
favourable
conditions
than would be acceptable to a normal
private lender, the beneficiaries appeared to have been
granted a benefit which they would not have received
under normal economic circumstances. As, moreover,
the companies concerned were considered to be in
direct
in the
fisheries sector,
the loans appeared to be State aid
within the meaning of Article 87 of the EC Treaty.

competition with other

companies

(12)

The United Kingdom stated that
the loans had been
granted under circumstances acceptable to a normal
the loans did not
private lender and that,
constitute State aid within the meaning of Article 87(1)
of the Treaty.

therefore,

(13)

respect,

the interest

the United Kingdom provided a
In this
description of
rate policy applied with
regard to granting the loans. The interest rates had
been set by reference to achievement of a return on
capital consistent with the EC (UK) base rate and
following an assessment of the risk. This resulted in an
interest rate policy giving indicative interest rates of UK
base rate plus 2 % for low-risk loans, UK base rate plus
3 % for medium-risk loans and UK base rate plus 4 % for
high-risk loans. The United Kingdom considered this
policy to be in line with the market economy investor
principle.

Salmon Farming Loan Assistance

(14) As regards the loans granted to salmon farmers under
the Salmon Farming Loan Assistance, 15 loans were
granted during the period from September 2000 to
January 2003. The conditions and interest rates of the
loans varied as follows:

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Beneficiary

Date

Amount (GBP)

Loan as % of
total project

Loan term

Interest rate in
%

Johnson Seawell Ltd

06-2000

250 000

North Atlantic Salmon Ltd

06-2000

211 500

Hoove Salmon Ltd

06-2000

87 000

Dury Salmon Ltd

06-2000

250 000

Hoganess Salmon Ltd

09-2000

213 000

North Isles Seafood Ltd

08-2000

250 000

Bressay Salmon Ltd

06-2000

156 300

Wester Sound Salmon Ltd

10-2000

250 000

Scord Salmon (Shetland) Ltd

02-2001

107 100

Hoove Salmon Ltd

07-2001

226 481

Skerries Salmon Ltd

07-2001

249 750

Unst Salmon Ltd

08-2001

250 000

SSG Seafoods Ltd

04-2002

250 000

Cro Lax Ltd

05-2002

250 000

Aqua Farm Ltd

09-2002

250 000

24

71,8

51,1

64,3

72

74,7

74,9

56,8

72,6

73,2

75,7

28,9

30,2

49,6

34,8

20 months

2 years

21 months

2 years

2 years

2 years

2 years

2 years

2 years

2 years

2 years

2 years

2 years

2 years

15 months

8,0

8,0

8,0

8,0

8,0

8,0

8,0

8,0

7,5

7,5

7,5

7,5

6,5

6,5

6,5

(15)

(16)

(17)

The United Kingdom stated that majority of these loans had been granted by applying the Bank of
England base rate plus 2 %, sometimes plus 3 %. The repayments terms had been designed to reflect
the growing cycle of the smolts. Typically the term was approximately 2 years with interest being
paid monthly and capital being repaid on expiry of the loan period, which was structured to coincide
with the harvest. The loan to value ratios ranged from 24 % to 75 %.

In order to secure the loans, they were granted under the condition that the lender took the ‘right of
title’ on the smolts, thus securing the loan on the basis of the sale value of the adult fish. The United
Kingdom claimed that, in a normal market, it would be anticipated that the value of the smolts
would increase over the on-growing period, and therefore the loan to value ratio would improve over
the same period. In addition, security had been held for the loans advanced by way of floating
charges, which provided security not only through the value of the fish, but also through all tangible
assets held by the company, for example, fish cages, licences, etc.

The United Kingdom finally provided details of the undertakings to which the loans were granted,
their registered capital, the percentage of lost capital at the time of the investments and in the 12
months before the investments, information showing that none of the undertaking had been subject
to insolvency proceedings at the respective times of grant, and the financial projections submitted by
the undertakings demonstrating their financial viability at the moment of application, as well as
information on the specific securities and ranking arrangements of each loan.

Loan scheme for fish processing

(18)

Concerning the loans granted to fish processors under the Loan scheme for fish processing, the loans
were as follows:

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Beneficiary

Date

Amount of the
loan (GBP)

Loan as % of
total project

Loan term

Interest rate in %

Lerwick Fish Traders Ltd

05-1996

200 000

Shetland Seafood Specialities Ltd

10-1996

73 000

Whalsay Fish Processing Ltd

08-1997

173 000

D Watt (Shetland) Ltd

12-1998

110 000

D Watt (Shetland) Ltd

05-2002

142 002

24,4

39,2

36,6

21,6

39,1

10 years

10 years

10 years

7,75

9,0

8,0

10 years

8,0/5,0 (1)

7 years

6,5

(1) The beneficiary of this loan was granted an interest relief grant of GBP 20 000, thus allowing for an interest rate of only 5 % to be paid

by the undertaking concerned.

(19)

(20)

(21)

The United Kingdom stated that all the loans, except one,
had been granted at interest rates in excess of both the
Bank of England base rate and the EC (UK) reference rate;
that the loans were typically for equipment and generally
for terms of 10 years; the terms were considered to be in
line with the terms which would be offered by normal
commercial lenders and that, in all cases, the loan value
rate was not greater than 40 %. The loans were subject to
securities in the form standard securities and floating
charges.

the time of
before
and
information showing that none of

The United Kingdom provided details of the undertakings
to which the loans were granted, their registered capital,
the
lost capital at
the percentage of
the
in the 12 months
investments
investments,
the
undertaking had been subject to insolvency proceedings
at
the respective times of grant, and the financial
projections submitted by the undertakings demonstrating
their financial viability at the moment of application, as
well as information on the specific securities and ranking
arrangements of each loan.

interest rate for this loan was 8 %,

Finally, as regards the loan granted to D Watt (Shetland)
Ltd in 1998, the United Kingdom stated that although
the original
it had
been reduced to 5 % trough an interest reduction grant
of GBP 20 000 paid directly to the lender by the
Shetland Islands Council. The United Kingdom noted
that the grant element could have been paid directly to
the borrower, as the borrower was eligible for grant
to
assistance. However,
administer, the grant had been paid to the lender and
the loan interest reduced.

to make matters

easier

Compatibility and recovery

(22)

The United Kingdom submitted that, if the Commission
were to consider the loans not to be commercial, they
were compatible with the relevant State aid rules.

aid granted prior
to 3 June 2003 should not be
required as that would be contrary to the principle of
the protection of legitimate expectations. In this respect,
the United Kingdom made reference to Commission
Decision 2003/612/EC of 3 June 2003 on loans for
the purchase of fishing quotas in the Shetland Islands
(United Kingdom) (1)
to Commission
as well
Decision 2006/226/EC of 7 December 2005 on
investments of Shetland Leasing and Property Develop­
(United Kingdom) (2),
ments
stating that until 3 June 2003 the Shetland Islands
legitimately considered the funds used to be
Council
private rather than public.

in the Shetland Islands

as

IV. ASSESSMENT

(24)

It must be determined first
the measure can be
regarded as State aid and if this is the case, whether
the aid is compatible with the common market.

if

Existence of State aid

(25) According to Article 87(1) of the EC Treaty,

‘save as
otherwise provided in this Treaty, any aid granted by a
Member State or through State resources in any form
whatsoever which distorts or threatens to distort compe­
tition
the
certain
favouring
production of certain goods shall,
insofar as it affects
trade between Member States, be incompatible with the
common market’.

undertakings

by

or

(26) According to established case-law (3) the granting of a
loan by the State or by State-controlled entities to a
that
firm within the meaning of
firm may favour
Article 87(1) of
is
the EC Treaty if
granted terms that are more favourable than those that
it would have obtained in the capital market.

the borrower

(27) An appropriate way of establishing whether a loan is
State aid is to apply the criterion of determining to
what extent the undertaking would have been able to
obtain the sums in question on the private capital
markets under similar conditions.

(23)

Finally,
the
the United Kingdom indicated that
Commission adopted a negative decision, recovery of

if

(1) OJ L 211, 21.8.2003, p. 63.
(2) OJ L 81, 18.3.2006, p. 36.
(3) Case C-142/87 Belgium v Commission [1986] ECR 231.

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(28)

Relevant factors for assessing the loan in comparison with private capital markets are in particular the
duration and amount of the loan, the risk of default by the borrower, the interest rate, the nature of
the security given and the ranking arrangement.

(29) As regards the interest rate of such loans, the market rate to be used as a reference point for
comparison is the reference rate established by the Commission in accordance with the Commission
notice on the method for setting the reference and discount rates (1). The reference rate thus
determined is a floor rate which may be increased in situations involving a particular risk (for
example, where an undertaking is in difficulty or where the security normally required by banks is
not provided). In such cases, the premium may amount to 400 basis points or more if no private
bank would have agreed to grant the relevant loan.

(30)

The table below compares the applied interest rates under the schemes with the Community
reference rate applicable at the respective times of granting.

Beneficiary

Date

Applied interest rate in %

EU reference rate in %

Loan scheme for fish processing

Lerwick Fish Traders Ltd

05-1996

Shetland Seafood Specialities Ltd

10-1996

Whalsay Fish Processing Ltd

D Watt (Shetland) Ltd

D Watt (Shetland) Ltd

08-1997

12-1998

05-2002

7,75

9,0

8,0

8,0/5,0 (1)

6,5

Salmon Farming Loan Assistance

Johnson Seawell Ltd

North Atlantic Salmon Ltd

Hoove Salmon Ltd

Dury Salmon Ltd

Hoganess Salmon Ltd

North Isles Seafood Ltd

Bressay Salmon Ltd

Wester Sound Salmon Ltd

Scord Salmon (Shetland) Ltd

Hoove Salmon Ltd

Skerries Salmon Ltd

Unst Salmon Ltd

SSG Seafoods Ltd

Cro Lax Ltd

Aqua Farm Ltd

06-2000

06-2000

06-2000

06-2000

09-2000

08-2000

06-2000

10-2000

02-2001

07-2001

07-2001

08-2001

04-2002

05-2002

09-2002

8,0

8,0

8,0

8,0

8,0

8,0

8,0

8,0

7,5

7,5

7,5

7,5

6,5

6,5

6,5

11,18

10,26

8,15

7,77

6,01

7,64

7,64

7,64

7,64

7,64

7,64

7,06

7,06

7,06

7,06

7,06

6,01

6,01

6,01

6,01

(1) The beneficiary of this loan was granted an interest relief grant of GBP 20 000, thus allowing for a reduction of the interest

rate to 5 %.

(1) OJ C 14, 19.1.2008, p. 6.

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(31)

In the case of the three loans granted under the Loan
scheme for fish processing in May 1996 to Lerwick Fish
Traders Ltd, in October 1996 to Shetland Seafood Speci­
alities Ltd and in August 1997 to Whalsay Fish
the applied interest rates were below
Processing Ltd,
the Community reference rate. Moreover,
the interest
rate of the loan granted to D Watt (Shetland) Ltd in
1998, although originally set at a level above the
Community reference rate, was lowered by way of an
to a level below the Community
interest relief grant
reference rate. These loans should thus be considered
to have been granted under
that are more
favourable than those in the capital market and thereby
to favour the undertakings concerned.

terms

(32) However, it can be established that the interest rates for
all other loans, provided from September 2000 onwards
under the Loan Scheme for Fish Processing and the
scheme for Salmon Farming Loan Assistance, were all
above the Community reference rate applicable at the
time the respective loans were granted and might
therefore have been granted under normal market
is
it
conditions on the capital market. Consequently,
relevant
those
to establish how all other aspects of
loans compare to loans granted under normal market
conditions.

(33)

(34)

The information submitted by the United Kingdom,
providing the financial situation of each undertaking,
shows that the loans were granted in accordance with
the interest rate policy referred to in recital 13 and have
been subject to a case-by-case risk assessment, allowing
the granting authority to establish the duration, interest
rate and securities and ranking arrangements on a case-
by-case basis for each loan depending on the actual risk
of each loan and in line with normal commercial
conditions.

In this regard, it is noted in particular that none of the
undertakings were, at the time the respective loans were
granted, firms in difficulty within the meaning of the
rescue and
Community Guidelines on State aid for
restructuring firms in difficulty (1).
In view thereof, as
it is also
regards the risk of default by the borrower,
showed a
noted that, although some undertakings
risk has
greater
been offset
rate
in such cases by a higher
combined with extra security in a way which is
comparable to normal conditions on the private market
for loans to this sector.

risk of defaulting than others,

interest

that

(35)

Consequently, it may be concluded that the loans granted
from September 2000 onwards
regarded
comparable to what a private lender, acting in a
market economy, would have been prepared to lend on
the same terms and that
these loans therefore were
granted on terms which were no more favourable that
normal market conditions.

can be

(1) OJ C 288, 9.10.1999, p. 2.

(36)

(37)

(38)

reflecting normal market
Loans made on terms
conditions do not provide an advantage to the benefi­
ciaries of the loans as compared with other operators on
the market and, in the absence of an advantage to the
undertakings concerned, are thus not to be regarded as
State aid within the meaning of Article 87(1) of the
Treaty.

The undertakings in question are in direct competition
with other companies in the fisheries sector, in particular
in the sector of fish processing, both within the United
Kingdom and in other Member States, which competition
is distorted or can be threatened to be distorted by the
loans. Consequently,
these loans must be considered
State aid within the meaning of Article 87(1) of the
Treaty.

Compatibility

State aid may be declared compatible with the common
market if it complies with one of the exceptions provided
for in the EC Treaty. As regards State aid to the fisheries
sector, State aid measures are deemed to be compatible
with the common market
they comply with the
conditions of the applicable Guidelines for the examina­
tion of State aid to fisheries and aquaculture.

if

(39) According to the second paragraph of point 5.3 of the
current Guidelines for the examination of State aid to
fisheries and aquaculture (2) an ‘unlawful aid’ within the
meaning of Article 1(f) of Regulation (EC) No 659/1999
will be appraised in accordance with the guidelines
applicable at
the time when the administrative act
this
setting up the aid has entered into force. As
assessment concerns four loans granted in 1996, 1997
and 1998, the aid must be assessed on the compatibility
with the Guidelines for the examination of State aid to
fisheries and aquaculture of 1994 (‘the 1994 Guidelines’)
and those of 1997 (3) (‘the 1997 Guidelines’) (4).

The fish processing loans granted in May and October 1996

(40)

the

conditions

Point 2.3 of the 1994 Guidelines stipulates that aid for
investments in the processing and marketing of fishery
products may be deemed to be compatible with the
common market provided that
for
granting it are comparable with those laid down in
Council Regulation (EC) No 3699/93 of 21 December
and arrangements
1993 laying down the
regarding Community
in the
assistance
fisheries and aquaculture sector and the processing and
least as
the marketing of
stringent and provided that the level of the aid does
not exceed,
level of
the national and Community subsidies permitted under
Annex IV to that Regulation.

in subsidy equivalent, the overall

its products (5) and are at

criteria
structural

(2) OJ C 84, 3.4.2008, p. 10.
(3) OJ C 260, 17.9.1994, p. 3.
(4) OJ C 100, 27.3.1997, p. 12.
(5) OJ L 346, 31.12.1993, p. 1.

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(41) According to Article 11 of Regulation (EC) No 3699/93
and point 2.4 of Annex III thereto, eligible investments
are to relate in particular to the construction and acqui­
sition of buildings and installation, the acquisition of new
equipment and installations needed for the processing
and the marketing of fishery and aquaculture products
between the time of landing and the end-product stage
and the application of new technologies intended in
particular to improve competitiveness.
Investments are
to be eligible for assistance when they concern
not
fishery and aquaculture products intended to be used
and
human
purposes
consumption, with the exception of investments exclu­
sively for the handling, processing and marketing of
fishery and aquaculture wastes.

processed

other

than

for

(42)

(43)

served to assist

The loan of GBP 200 000, granted in May 1996 to
Lerwick Fish Traders Ltd,
in the
financing of the establishment of a salmon packing and
processing factory. Such a project falls within the scope
of the requirements outlined in recitals 40 and 41. In
particular, it concerns assistance to an investment for the
construction of building and installation and the acqui­
sition of new equipment. Moreover, the investments did
not concern fishery and aquaculture products intended to
be used and processed for purposes other than human
consumption.

The loan of GBP 73 000, granted in October 1996 to
Shetland Seafood Specialities Ltd, served to assist
the
purchase and installation and commissioning of a soup
production line. Such a project falls within the scope of
In
the requirements outlined in recitals 40 and 41.
particular,
it concerns assistance to an investment for
the acquisition of new equipment and installations
needed for the processing and marketing of fishery and
aquaculture products between the time of landing and
the end product stage. Moreover, the investments did
not concern fishery and aquaculture products intended
to be used and processed for purposes other than human
consumption.

fish processing loans granted in August 1997 and

The
December 1998

the 1997 Guidelines

(44) As regards the loans granted in 1997 and 1998, point
2.3 of
the conditions
previously laid down in the 1994 Guidelines, referred
to in recital 39. Thus the aid falls to be assessed under
the conditions of Regulation (EC) No 3699/93.

repeats

the acquisition of new equipment and installations
needed for the processing and marketing of fishery and
aquaculture products between the time of landing and
the end product stage. Moreover, the investments did
not concern fishery and aquaculture products intended
to be used and processed for purposes other than human
consumption.

(46) As regards the aid granted to D Watt (Shetland) Ltd in
December 1998, Regulation (EC) No 3699/93 was
replaced by Council Regulation (EC) No 2468/1998 of
3 November 1998 laying down the
and
arrangements regarding Community structural assistance
in the fisheries and aquaculture sector and the processing
and marketing of its products (1). According to Article 20
of Regulation(EC) No 2468/98, references to Regulation
(EC) No 3699/93 are to be construed as references to the
new Regulation. The provisions concerning aid for
investments in processing and marketing of
fisheries
products are laid down in Article 11 of Regulation
(EC) No 2468/98 and point 2.4 of Annex II thereto.

criteria

thereto,

(47) According to Article 11 of and Point 2.4 of Regulation
(EC) No 2468/98 and Annex II
eligible
investments are to relate in particular to the construction
and acquisition of buildings and installations, the acqui­
sition of new equipment and installations needed for the
fishery and aquaculture
processing and marketing of
landing and the end
products between the time of
product stage (including in particular data-processing
and data-transmission equipment). Investments are not
to be eligible for assistance when they concern fishery
and aquaculture products
intended to be used and
processed for purposes other than human consumption,
with the exemption of investments exclusively for the
handling, processing and marketing of fishery and aqua­
culture wastes.

(48)

falls within the scope of

The loan of GBP 110 000, granted in December 1998 to
D Watt (Shetland) Ltd, was granted for the building and
equipping of a new shellfish processing factory. Such a
project
the requirements
outlined in recital 47. In particular, it concerns assistance
to an investment for the acquisition of new equipment
and
and
marketing of fishery and aquaculture products between
the time of landing and the end product stage. Moreover,
the investments did not concern fishery and aquaculture
products intended to be used and processed for purposes
other than human consumption.

installations needed

the processing

for

(45)

The loan of GBP 173 000, granted in August 1997 to
Whalsay Fish Processors Ltd, concerned a project
to
install a fish processing line and chill
facility in the
existing factory. Such a project falls within the scope of
the requirements outlined in recitals 40 and 41.
In
it concerns assistance to an investment for
particular,

Aid rate

(49) According to Annex IV to Regulation (EC) No 3699/93
and Annex III to Regulation (EC) No 2468/98, aid may
be granted up to 50 % of the eligible costs.

(1) OJ L 312, 20.11.1998, p. 19.

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EN

Official Journal of the European Union

L 202/69

(50)

(51)

(52)

(53)

(54)

thus covering approximately 24,4 % of

The loan of GBP 200 000 to Lerwick Fish Traders Ltd
was granted for a project with a total cost of GBP
819 672,
the
actual project cost. The loan was to be paid back in
108 equal monthly instalments of GBP 2 784,94. The
applied interest
compared to a
rate was 7,75 %,
Community reference rate of 11,18 %.

(57)

thus covering approximately 39,2 % of

The loan of GBP 73 000 to Shetland Seafood Specialities
Ltd was granted for a project with a total cost of GBP
186 000,
the
actual project cost. The loan was to be paid back in
120 equal monthly instalments. The applied interest
rate was 9 %, compared to a Community reference rate
of 10,26 %.

does not constitute State aid within the meaning of
Article 87(1) of the Treaty.

The Commission finds that the aid granted under the
Loan Scheme for Fish Processing in May 1996 to
Lerwick Fish Traders Ltd, in October 1996 to Shetland
Seafood Specialities Ltd, in August 1997 to Whalsay Fish
Processors Ltd and in December 1998 to D Watt
(Shetland) Ltd constitutes State aid within the meaning
of Article 87(1) of the Treaty. However, that aid complies
with the conditions of the Guidelines for the examination
of State aid to fisheries and aquaculture and is therefore
considered compatible with the common market on the
basis of Article 87(3)(c) of the EC Treaty,

thus covering approximately 36,6 % of

The loan of GBP 173 000 to Whalsay Fish Processors Ltd
was granted for a project with a total cost of GBP
473 150,
the
actual project cost. The loan was to be paid back in
96 equal monthly instalments commencing 24 months
after the advance of
instalment
thereof. The applied interest rate was 8 %, compared to
a Community reference rate of 8,15 %.

the loan or the first

The loan of GBP 110 000 to D Watt (Shetland) Ltd was
granted for a project with a total cost of GBP 510 000,
thus covering approximately 21,6 % of the actual project
cost. The loan was to be paid back in 120 equal monthly
instalments. The applied interest rate was 5 %, compared
to a Community reference rate of 7,77 %.

To calculate the aid rate it is necessary to compare the
project costs related to each loan with the gross grant
equivalent of that loan. In the light of the figures referred
to in recitals 50 to 53, each of the loans, even before
calculating the gross grant equivalent, comprised less
than 50 % of the total project cost.

(55)

Therefore, the aid rate for the loans can be regarded as
complying with the conditions of Annex IV to Regu­
lation (EC) No 3699/93 and Annex III to Regulation
(EC) No 2468/98, as referred to in recital 49.

HAS ADOPTED THIS DECISION:

Article 1

1.
The aid which the United Kingdom granted in the period
from 2000 to 2002 under the scheme for Salmon Farming
Loan Assistance does not constitute aid within the meaning
of Article 87(1) of the Treaty.

2.
The aid which the United Kingdom granted in 2002 to D
Watt (Shetland) Ltd under the Loan Scheme for Fish Processing
does not constitute aid within the meaning of Article 87(1) of
the Treaty.

The aid which the United Kingdom granted under the
3.
Loan Scheme for Fish Processing in the period from 1996 to
1998 to Lerwick Fish Traders Ltd, Shetland Seafood Specialities
Ltd, Whalsay Fish Processors Ltd and D Watt (Shetland) Ltd is
compatible with the common market within the meaning of
Article 87(3)(c) of the Treaty.

Article 2

This Decision is addressed to the United Kingdom of Great
Britain and Northern Ireland.

V. CONCLUSION

Done at Brussels, 30 April 2008.

(56)

In view of the foregoing, the Commission finds that the
aid granted under the Scheme for Salmon Farming Loan
Assistance as well as the aid granted in 2002 to D Watt
(Shetland) Ltd under the Loan Scheme for Fish Processing

For the Commission

Joe BORG
Member of the Commission