CELEX: 51997PC0179
Language: en
Date: 1997-05-02
Title: Proposal for a Council and Commission Decision On the position to be taken by the Community within the Association Council established by the Europe Agreement between the European Communities and their Member States of the one part, and the Slovak Republic, of the other part, signed on 4 October 1993, with regard to the adoption of the necessary rules for the implementation of Article 64 paragraph 1 (iii) and paragraph 2 of the Europe Agreement and Article 8 (1) (iii) and (3) of Protocol 2 to the said Agreement on ECSC products

COMMISSION OF THE EUROPEAN COMMUNITIES
                                               Brussels, 02.05.1997
                                                 COM(97) 179 final
                                                 97/0125 (ACC)
                    Proposal for a Council and Commission Decision
On the position to be taken by the Community within the Association Council established
 by the Europe Agreement between the European Communities and their Member States
  of the one part, and the Slovak Republic, of the other part, signed on 4 October 1993,
  with regard to the adoption of the necessary rules for the implementation of Article 64
paragraph 1 (iii) and paragraph 2 of the Europe Agreement and Article 8(1) (iii) and (3)
                of Protocol 2 to the said Agreement on ECSC products
                         (presented by the Commission)
 ---pagebreak---  ---pagebreak---                            EXPLANATORY MEMORANDUM
Article 64 (3) of the Europe Agreement establishing an association between the European
Communities and their Member States, of the one part, and the Slovak Republic, on the
other part signed in Brussels on 4 October 1993, provides that the necessary rules for the
implementation of paragraphs 1 and 2 of that Article (i.e. competition provisions and
provisions on state aids) shall be adopted by the Association Council. The time-limit for
these rules to be adopted is three years from the entry into force of the Agreement; in
accordance with Article 124, the time-limit runs from 1 January 1992.
The provisions on state aids are one of the basic points of the Europe Agreement between
the European Communities and the Slovak Republic. Their actual implementation,
through the adoption of the attached rules by the Association Council is a prerequisite for
the smooth development of trade between the two parties. Covering any aid granted by
the State or through State resources in any form whatsoever which might affect trade
between the European Community and the Slovak Republic, the proposed decision lays
down cooperation between the two parties' monitoring authorities.
According to Article 2 (1) of the Decision of the Council and the Commission of 19
December 1994 on the conclusion of the Europe Agreement the position to be taken by
the Community within the Association Council shall be laid down in accordance with the
corresponding provisions of the Treaties establishing the three Communities. Article 113
and 228 of the EC Treaty as well as Article 95 of the ECSC Treaty are an appropriate
legal basis for the position to be adopted by the Community in the Association Council
with regard to the implementing rules for state aids. (The application of the conditions
resulting from Article 92 of the EC Treaty to aids granted by the Slovak Republic
requires, if their compatibility with the Europe Agreement is to be ensured, the
introduction by the Association Council of specific arrangements which then come
under the commercial policy). It is therefore desirable that the Council and the
Commission adopt the attached decision.
The Commission therefore requests the Council to adopt the attached proposal for a
Council and Commission Decision.
 ---pagebreak---                      Proposal for a Council and Commission Decision
 On the position to be taken by the Community within the Association Council established
  by the Europe Agreement between the European Communities and their Member States
   of the one part, and the Slovak Republic, of the other part, signed on 4 October 1993,
   with regard to the adoption of the necessary rules for the implementation of Article 64
 paragraph 1 (iii) and paragraph 2 of the Europe Agreement and Article 8(1) (iii) and (3)
                  of Protocol 2 to the said Agreement on ECSC products
The Council of the European Union,
The Commission of the European Communities,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 in conjunction with the first sentence of Article 228 (2) thereof,
Having regard to the Treaty establishing the European Coal and Steel Community and in
particular Article 95 thereof,
Having regard to the proposal of the Commission of the European Communities,
Having regard to the opinion of the Consultative Committee,
Whereas the European Community and its Member States concluded the Europe
Agreement with the Slovak Republic on 19 December 1994;
Whereas Article 64 (3) of the Europe Agreement lays down that the Association Council
shall adopt the rules necessary for the implementation of paragraphs 1 and 2 of that
Article;
Whereas Article 8 (3) of Protocol 2 to the Europe Agreement on products covered by the
ECSC Treaty lays down that the Association Council shall adopt the necessary rules for
the implementation of paragraph 1 and 2 of that Article;
Whereas the application of the conditions contained within Article 92 of the Treaty
establishing the European Community to aids granted by the Slovak Republic requires that
specific arrangements be drawn up to apply to trade between the European Community
and the Slovak Republic,
HAVE DECIDED AS FOLLOWS:
The position to be taken by the Community within the Association Council established by
the Europe Agreement between the European Communities and their Member States, of
the one part and the Slovak Republic of the other part, with regard to the rules
implementing Article 64 (1) (iii) and (2) of the aforementioned Europe Agreement, and to
the rules implementing Article 8 (1) (iii) and (3) of Protocol 2 on ECSC products to the
Europe Agreement shall be based on the draft decision of the Association Council
annexed to this Decision.
 ---pagebreak--- Done at Brussels on
For the Council            For the Commission
                    %: V O
 ---pagebreak--- Association between the European Union
and the Slovak Republic
The Association Council
                     Draft decision n°.../... of the Association Council
      between the European Communities and their Member States of the one part
                         and the Slovak Republic of the other part
                                            of.../...
adopting the necessary rules for the implementation of Article 64(l)(iii) and (2) of the
Europe Agreement between the European Communities and their Member States of the
one part and the Slovak Republic of the other part, and the rules for the implementation of
Article 8(l)(iii) and (3) of Protocol 2 on ECSC products to the said agreement on ECSC
products
The Association Council,
Having regard to the Europe Agreement establishing an association between the European
Communities and the Member States of the one part, and the Slovak Republic of the other
part, and in particular Article 64(3) thereof,
Having regard to Protocol 2 on ECSC products in the aforementioned Europe
Agreement, and in particular Article 8(3) thereof,
Whereas Article 64(3) of the Europe Agreement lays down that the Association Council
shall, within three years of the entry into force of the Agreement, adopt by decision the
necessary rules for the implementation of paragraphs 1 and 2 of that Article;
Whereas Article 8(3) of Protocol 2 to the Europe Agreement lays down that the
Association Council shall, within three years of the entry into force of the Agreement,
adopt by decision the necessary rules for the implementation of paragraphs 1 and 2 of that
Article;
HAS DECIDED AS FOLLOWS:
The necessary rules implementing Article 64(l)(iii) and para 2 of the Europe Agreement
establishing as association between the European Communities and their Member States
of the one part, and the Slovak Republic of the other part, and the rules implementing
Article 8(l)(iii) and (3) of Protocol 2 on ECSC products to the aforementioned Europe
Agreement, as set out in the Annex to this Decision, are hereby adopted.
Done at Brussels on
The Secretaries                                 For the Association Council
                                                The President
 ---pagebreak---                             Implementing Rules for State Aids
Rules for the implementation of the provisions on state aid provided for in Article 64
(l)(iii) and (2) pursuant to Article 64 (3) of the Europe Agreement between the European
Communities and their Member States, of the one part, and the Slovak Republic of the
other part,
Having regard to Article 64 (l)(iii), (2) and (3) of the Europe Agreement between the
European Communities and their Member States, of the one part, and the Slovak
Republic, of the other part,
Whereas it is recalled that in accordance with Article 64 (2) of the Europe Agreement, the
notion of "public aid" as contained in Article 64 (l)(iii) of the Europe Agreement shall be
assessed on the basis of the criteria arising from the application of the rules of Article 92
of the Treaty establishing the European Community, and thus covers any aid granted by
the State or through State resources in any form whatsoever which distorts or threatens to
distort competition by favouring certain undertakings or the production of certain goods,
insofar as it may affect trade between the European Community (EC) and the Slovak
Republic (state aid),
Whereas it is recognised that the Slovak Republic is an economy in transition and faces
specific problems as a consequence. For the present rules account must be taken of this
particular situation,
Whereas account is to be taken of the approximation of legislation as foreseen in the
Europe Agreement,
Whereas the Slovak Republic will appoint a national institution or administration to
become a monitoring authority with responsibility for state aid matters,
Whereas this monitoring authority will be responsible for the analysis of existing and
future individual aid awards and programmes in the Slovak Republic, and shall give an
opinion as to their compatibility with Article 64 (1) (iii), (2) of the Europe Agreement,
Whereas the Slovak Republic will, when providing for the necessary rules to ensure
effective supervision, ensure in particular that the monitoring authority receives in due
time all the relevant information from the other government departments at central,
regional and local level,
Whereas the EC Commission will under the relevant Community programmes, assist the
monitoring authority by providing for documentation, training, study tours and other
relevant technical assistance,
The following rules have been adopted for the implementation of Article 64 (l)(iii) and
(2) of the Europe Agreement:
 ---pagebreak--- SURVEILLANCE OF STATE AID AND MONITORING AUTHORITIES
ARTICLE 1: SURVEILLANCE                     OF    STATE       AID      AND      MONITORING
AUTHORITIES
Subject to the procedural rules in force in the EC and the Slovak Republic, the granting of
state aid shall be surveyed and assessed as to its compatibility with the Europe Agreement
by the responsible monitoring authorities in the EC and the Slovak Republic, respectively.
The monitoring authority in the EC shall be the EC Commission, and in the Slovak
Republic the Ministry of Finance.
CONCRETE GUIDANCE FOR DEALING WITH CASES
ARTICLE 2: CRITERIA FOR COMPATIBILITY
Regarding the assessment of compatibility of individual aid awards and programmes with
the Europe Agreement as provided for in Article 1 of the present implementing rules, they
shall be assessed on the basis of the criteria arising from the application of the rules of
Article 92 of the Treaty establishing the European Community, including the present and
future secondary legislation, frameworks, guidelines and other relevant administrative acts
in force in the EC, the case law of the Court of First Instance and the Court of Justice,
and the special guidance to be developed pursuant to Article 4 (3).
Where changes in the secondary EC legislation and other acts as well as the case law as
provided for in the first paragraph of this Article do not encounter objections on the
Slovak side within three months, they shall become the criteria of compatibility as
provided for in the same first paragraph of this Article.
Where such changes encounter objections on the Slovak side, consultations shall take
place in the Association Committee, in accordance with the provisions contained in
Articles 7 and 8 of the present implementing rules.
The same principles shall apply regarding other significant changes in the EC state aid
policy.
The monitoring authority of the Slovak Republic shall be informed of any acts related to
the adoption, abolition or modification of the criteria of compatibility referred to in the
first paragraph of this Article as far as these are not published but are specifically brought
to the attention of all Member States.
ARTICLE 3. DE MINIMIS AID
Aid programmes or individual aid awards which do not involve export aid and which are
limited to a total amount of aid per firm over a three year period of ECU 100,000 shall be
considered as having only a negligible effect on competition and trade between the Parties
and are therefore not to be treated under the present implementing rules1. This rule does
not apply in sectors covered by specific state aid rules.
1
  Amount subject to upward revision by the Sub-Committee in line with internal developments of
the European Union
                                                6
 ---pagebreak--- ARTICLE 4: DEROGATIONS
In accordance with Article 64 (4) (a) of the Europe Agreement, the Slovak Republic shall
be regarded as an area identical to those areas of the Community referred to in Article 92
(3)(a)oftheECTreaty.
The monitoring authorities shall jointly evaluate the maximum aid intensities and specific
regional coverage of areas eligible for regional assistance.
The EC Commission and the monitoring authority shall also work out, in addition to the
types of aid allowed in the Union, special guidance on the compatibility of aid designed to
combat the specific problems of the Slovak Republic as it undergoes transition to a market
economy.
PROCEDURES FOR CONSULTATION AND PROBLEM SOLVING
ARTICLE 5: EXAMINATION OF CERTAIN AID
Aid programmes or individual aid awards - whether covered by frameworks and
guidelines in the Community or not - where the amount of the aid concerns amounts over
3 million ECU may be referred by the relevant monitoring authority to the Sub-committee
for Competition for examination. The Sub-Committee may formulate appropriate draft
decisions or recommendations concerning the compatibility of the aid programme or aid
award with the Europe Agreement and these implementing rules for the Association
Committee.
The principal purpose of such decisions or recommendations should be to avoid resort to
commercial defence measures as a consequence of the aid in question.
The Association Committee may decide, upon the joint proposal of the Parties in the
framework of the Sub-Committee for Competition, to further extend the possibility of
examination as provided for in this Article.
ARTICLE 6: REQUEST FOR INFORMATION
Whenever the monitoring authority of a Party becomes aware of the fact that an aid
programme or individual aid award appears to substantially affect important interests of
that Party, it may request information about this from the authority responsible. In any
event, both authorities shall endeavour to keep each other informed of important
developments that may be of practical interest for the other.
ARTICLE 7: CONSULTATION AND COMITY
Whenever the EC Commission and the Slovak monitoring authority consider that the
award of state aid on the territory for which the other authority is responsible is
substantially affecting important interests of the respective Party, it may request
consultation with the other authority, and consequently it may request that the other
Party's monitoring authority initiate any appropriate procedures with a view to take
remedial action. This is without prejudice to any action under the respective Parties'
relevant legislation and does not hamper the full freedom of ultimate decision of the
 ---pagebreak--- authority so addressed, within the framework set by the provisions of the Europe
Agreement.
The monitoring authority so addressed shall give full and sympathetic consideration to
such views and factual material as may be presented by the requesting authority and in
particular to the alleged harmful effects on the important interests of the requesting Party.
Without prejudice to any of their rights and obligations, the monitoring authorities
involved in consultations under this Article shall endeavour to find, within three months, a
mutually acceptable solution in the light of the respective important interests involved.
ARTICLE 8: PROBLEM SOLVING
Where consultations under Article 7 do not lead to a mutually acceptable solution, an
exchange of views shall take place within the Sub-Committee for Competition established
in the framework of the Europe Agreement at the request of one Party within three
months following the request.
Following this exchange of views, or after the expiration of the delay stated above, the
matter may be submitted to the Association Committee which may make appropriate
recommendations for the settlement of these cases.
These procedures are without prejudice to any action under the relevant respective
legislation in force in the territories of the Parties, and without prejudice to Article 64(6)
of the Europe Agreement. Commercial defence measures should however only be used as
a last resort.
ARTICLE 9: SECRECY AND CONFIDENTIALITY OF INFORMATION
Having regard to Article 64 (7) of the Europe Agreement, neither monitoring authority is
required to provide information to the other authority if disclosure of that information to
the requesting authority is prohibited by the law of the authority possessing the
information.
Each monitoring authority agrees to maintain the confidentiality of any information
provided to it in confidence by the other authority.
TRANSPARENCY
ARTICLE 10: INVENTORY
Under the relevant Community programmes, the EC Commission shall assist the Slovak
Republic to implement these rules, and draw up and thereafter update an inventory of its
aid programmes and individual aid award, established on the same basis as in the
Community, in order to ensure and continuously improve transparency.
The EC Commission shall provide the Slovak Republic with regular information on the
documentation it produces with a similar aim in relation to the EC Member States.
ARTICLE 11: MUTUAL INFORMATION
 ---pagebreak--- Both Parties shall ensure transparency in the domain of state aid by providing for
appropriate publications and the exchange of information on state aid policy on a regular
and reciprocal basis.
 ---pagebreak--- ECSC PRODUCTS
ARTICLE 12: TREATY ESTABLISHING THE EUROPEAN COAL AND STEEL
COMMUNITY (ECSC)
The provisions contained in Articles 1,2,4(3) and 5 to 11 above shall apply mutatis
mutandis with respect to the coal and steel sector as referred to in Protocol 2 to the
Europe Agreement.
MISCELLANEOUS
ARTICLE 13: ADMINISTRATIVE ASSISTANCE (LANGUAGES)
The EC Commission and the Slovak monitoring authority will provide for practical
arrangements for mutual assistance or any other appropriate solution concerning in
particular the question of translations.
Director General for                                      The Slovak Republic
Competition of the Commission
of the European Communities
Alexander Schaub                                          Jozef Magula
The Director-General                                      State Secretary
                                                          Ministry of Finance
                                         10
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 179 final
                                             DOCUMENTS
EN                                                                       08 11
                                    Catalogue number : CB-C0-97-168-EN-C
                                                             ISBN 92-78-18958-8
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