Article 1 Group exemptions
1. The Commission may, by means of regulations adopted in accordance with the procedures laid down in Article 8 of this Regulation and in accordance with Article 92 of the Treaty, declare that the following categories of aid should be compatible with the common market and shall not be subject to the notification requirements of Article 93(3) of the Treaty: (a) aid in favour of: (i) small and medium-sized enterprises; (ii) research and development; (iii) environmental protection; (iv) employment and training; aid in favour of: (i) small and medium-sized enterprises; (ii) research and development; (iii) environmental protection; (iv) employment and training; (b) aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. 2. The Regulations referred to in paragraph 1 shall specify for each category of aid: (a) the purpose of the aid; (b) the categories of beneficiaries; (c) thresholds expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts; (d) the conditions governing the cumulation of aid; (e) the conditions of monitoring as specified in Article 3. 3. In addition, the regulations referred to in paragraph 1 may, in particular: (a) set thresholds or other conditions for the notification of awards of individual aid; (b) exclude certain sectors from their scope; (c) attach further conditions for the compatibility of aid exempted under such regulations.
Amendment rationale: CONTEXT OF THE PROPOSAL In the interest of enforcement and to simplify administration without weakening Commission monitoring, 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 (hereinafter the ‘Enabling Regulation’)[1] allows the Commission to declare, by means of regulations, that certain categories of State aid are compatible with the common market and are exempted from the notification requirement provided for in Article 108(3) of the TFEU. The categories concerned include de minimis aid[2], aid to small and medium-sized enterprises, aid for research and development, environmental protection or employment and training, and aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. The Commission indicated in its Communication on State aid Modernisation of 8 May 2012[3] that State aid enforcement should focus on cases with the biggest impact on the internal market. This implies on the one hand stronger scrutiny of large and potentially distortive aid, and on the other simplified analysis of cases with only limited effect on trade and limited potential to seriously distort competition. The latter can be achieved by reviewing the regime of exemptions, in particular the scope of Council Regulation (EC) No 994/98, which would enable the Commission to block-exempt further categories of aid from the notification requirement, in addition to the categories already included in the current Enabling Regulation. The proposal to include certain new categories in the Enabling Regulation entails neither the immediate block exemption of all these categories, nor does it mean that all measures within a category would be block-exempted in their entirety. Rather, it enables the Commission to adopt block exemptions gradually, when experience acquired is sufficient to allow the Commission to define clear compatibility criteria for certain types of aid measures, ensuring that the effect on competition and trade between Member States is limited. The same approach has been followed under the current Enabling Regulation: the first block exemptions were adopted in 2001 (training aid, aid to SMEs), while for other types of aid the first exemptions were adopted only at a later stage, once sufficient experience had been acquired (employment aid in 2002, regional aid in 2006, and R&D and environmental aid in 2008 with the adoption of GBER[4]). More frequent revisions of the Enabling Regulation may in the future be needed, in particular to have due regard to the investments required by and compatible with the development of the internal market, in the light of the experience gained. Following a decision on the next Multiannual Financial Framework, the Commission will also assess without delay the possibilities to simplify the State aid procedures for projects co-financed under the EU structural policies. New categories proposed for inclusion in the Enabling Regulation · State aid in the culture and heritage conservation sectors Council Regulation No 994/98 authorises the Commission to adopt an exemption regulation for all categories of State aid to SMEs. Therefore, on this basis the Commission could block-exempt State aid to SMEs in the culture and heritage conservation sectors as defined in Article 167 TFEU under the current Enabling Regulation. This would be of only limited use, though, as the recipients of State aid, in particular in the cinema and audio-visual sectors, are often large companies. These cases generate a substantial workload for the Commission and Member States, even though they are often routine cases involving limited aid amounts. Once this category of aid is included in the Enabling Regulation, the Commission will be able to adopt block exemptions, for example for measures that meet the criteria of the revised Cinema Communication or for measures for heritage conservation or culture promotion, which usually have only limited effect on trade (e.g. numerous individual notifications of restoration of classified buildings or monuments). Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid. · State aid in relation to natural disasters Regarding State aid to compensate for the damage caused by natural disasters, Council Regulation No 994/98 would, as explained above, authorise the Commission to exempt aid granted to SMEs, but does not allow aid to large companies. Block-exempting such natural disaster aid would allow Member States to react rapidly when a natural disaster occurs in order to compensate for the damage caused. The Commission has meanwhile acquired sufficient experience with this type of aid and is able to define clear ex ante conditions of compatibility. If the aid is clearly defined, limited to material damage directly caused by the disaster and in an amount verified by an independent body, exemption from the notification obligation would be justified. Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid, even for large companies. · State aid in relation to certain adverse weather conditions in fisheries Member States are also required to notify to the Commission State aid measures to make good the damage caused by certain adverse weather conditions in fisheries. The amounts granted in this area are usually limited and clear compatibility conditions can be defined. Regulation (EC) No 994/98 authorises the Commission to exempt such aid from the notification requirement only if it is granted to SMEs. However, large companies may also be affected by adverse weather conditions in fisheries. The Commission has meanwhile acquired sufficient experience with this type of aid and clear compatibility conditions can be defined on this basis. Council Regulation No 994/98 should be amended accordingly to cover this category of State aid. · State aid for innovation Council Regulation No 994/98 explicitly covers research and development, but not innovation. Innovation has since become an EU objective as part of the Innovation Union initiative. For example aid towards process and organisational innovation in services and aid for innovation clusters may not be distortive as long as targeted conditions are respected. Aid for product and technological innovation, including support for demonstration projects and prototypes, is instead already included in Article 30 of the GBER. Council Regulation No 994/98 should be amended accordingly so that aid for innovation could be exempted in the future. · State aid for forestry and promotion of non-Annex-I products in the food sector According to Article 42 TFEU the rules on competition apply to the production of and trade in agricultural products only to the extent laid down by the European Parliament and the Council. However, certain measures which are not covered by Article 42 TFEU and to which the general competition rules apply are contained in the rural development programmes or favour the promotion and advertising of non-Annex I products in the food sector and have been subject to specific compatibility conditions under the State aid rules. This is in particular true of forestry and aid for the promotion of non-Annex-I products in the food sector. So far, this type of aid could only be block-exempted if it was limited to SMEs. In view of the broad experience with this type of measures, allowing the formulation of clear compatibility conditions, Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for the conservation of marine biological resources According to Article 7 of Council Regulation of 27 July 2006 (EC) No 1198/2006 on the European Fisheries Fund[5], Articles 107, 108 and 109 of the Treaty shall apply to aid granted by the Member States to enterprises in the fisheries sector, except for payments made by Member States pursuant to, and in conformity with, Regulation (EC) No 1198/2006. Additional State aid for the conservation of marine biological resources usually has limited effects on intra-Union trade, contributes to the EU objectives in the field of maritime and fisheries policy and does not create serious distortions of competition. Furthermore, the amounts granted are usually limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for amateur sports While a considerable number of cases relating to amateur sports does not even constitute aid, others usually have limited effects on intra-Union trade and do not create serious distortions of competition; furthermore, the amounts granted are typically limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · Social aid to residents of remote regions for transport In the area of transport, specific rules already exist, in particular Council Regulation No 1370/2007 on road and rail passenger transport services of general economic interest. However, there are no specific rules regarding aid for air and maritime transport. Within these sectors, the Commission has acquired sufficient experience to formulate general compatibility criteria for social aid to residents of remote regions for transport (mainly outermost regions and islands/peninsulas assimilated as islands in the continental EU). This aid tends to be relatively minor and does not create significant distortions of competition. Council Regulation No 994/98 should be amended accordingly so that this category of State aid could in future be exempted. · State aid for the transport sector pursuant to Article 93 TFEU Article 9 of Regulation No 1370/2007 currently exempts from the prior notification requirement laid down in Article 108(3) TFEU public service compensation for the operation of public passenger transport services or for complying with tariff obligations established through general rules paid in accordance with that Regulation. Under the division of competences between the Council and Commission established by the Lisbon Treaty, set out in Articles 108(4) and 109 TFEU, it is for the Council to determine the categories of aid exempt from State aid notification, but for the Commission to establish the detailed rules relating to such exemption. In order to bring the public service compensation exemption into line with these provisions, this category should be brought under the scope of Council Regulation No 994/98. Article 9 of Regulation No 1370/2007 should cease to apply six months after the entry into force of a regulation adopted by the Commission concerning this category of State aid. The Commission currently expects such a block exemption would however reproduce the substance of the current exemption, except to the extent that Regulation 1370/2007 is amended by planned legislative proposals relating to the rail sector. · State aid for certain broadband infrastructure In recent years, the Commission has acquired vast experience with aid for the broadband sector and has devised guidelines. On that basis the Commission is able to formulate precise compatibility criteria allowing block exemption with regard to aid for certain types of broadband infrastructure under specific conditions. This applies to aid covering basic broadband in regions where there is no broadband infrastructure and where no such infrastructure is likely to be developed in the near future (‘white’ areas), and small individual aid measures covering very high-speed next-generation access (‘NGA’) networks in ‘white NGA’ areas. Moreover, aid for broadband-related civil engineering works and passive broadband infrastructure could be block exempted. Support for civil engineering works in many cases constitutes aid if it concerns the installation of dedicated telecommunication infrastructure (ducts). Passive broadband infrastructure covers the installation of both ducts and dark fibres. It is pro-competitive since it can be used by different operators (fixed, wireless, mobile), has no predetermined access or technology, and is typically owned by public authorities who have no interest to discriminate between operators. A block exemption for civil engineering works and passive broadband infrastructure could speed up investments since (small) local authorities often prefer to support this, rather than adopting broadband schemes and having to comply with their more extensive State aid conditions. The Commission has acquired sufficient case experience in the area of aid to passive infrastructure. A block exemption may trigger increasing use in rural areas where existing passive infrastructure is not adequate. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could in future be exempted. Specifying block-exempted aid categories Article 1(2)(c) specifies that for each category of block-exempted aid the thresholds should be ‘expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts’. Given the development of new forms of State support, such as financial engineering instruments or different forms of risk capital, the Commission considers that the way these thresholds are set should be updated to include the possibility of block exemption for these new forms of State support too. It should therefore be possible to define the thresholds not only in terms of aid intensities or maximum aid amounts, but also in terms of maximum level of State support, whether it qualifies as State aid in the meaning of Article 107(1) TFEU or not. Council Regulation No 994/98 should be amended accordingly. Provisions concerning transparency Article 3(2) of Regulation No 994/98 provides that, ‘On implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems.’ In 1998, when Regulation No 994/98 was adopted, publishing these summaries in the Official Journal was the most appropriate means. However, as the number of official languages has increased and the communication media have evolved, publishing the summaries on the Commission’s website would increase transparency, shorten publication deadlines and reduce the administrative workload, since it has become equally easy for interested parties, particularly businesses, to consult the Commission’s website or the Official Journal. The obligation to publish the above summaries in the Official Journal should therefore be replaced by the obligation to publish on the Commission’s website. Council Regulation No 994/98 should be amended accordingly. Provisions relating to the procedure for Commission adoption of exemption regulations Pursuant to Article 8 of Regulation No 994/98, the Commission must consult the Advisory Committee on State Aid before publishing any draft block exemption regulation. The Commission believes that to enable interested parties to submit their comments and thus ensure greater transparency, the draft regulations should be published at the same time as the Advisory Committee is consulted. Given the way new electronic communications media have developed, the Commission believes that the fastest and most effective way of publishing draft regulations is on its website rather than in the Official Journal. This gives interested parties a better opportunity to comment and reduces administrative burden and delay. The above-mentioned provisions in Article 8 of Council Regulation No 994/98 should be amended accordingly.
Revised version (Article 1 Group exemptions):
1. The Commission may, by means of regulations adopted in accordance with the procedures laid down in Article 8 of this Regulation and in accordance with Article 92 of the Treaty, declare that the following categories of aid should be compatible with the common market and shall not be subject to the notification requirements of Article 93(3) of the Treaty: (a) aid in favour of: (i) small and medium-sized enterprises; (ii) research, development and innovation; (iii) environmental protection; (iv) employment and training; (v) culture and heritage conservation; (vi) making good the damage caused by natural disasters; (vii) making good the damage caused by certain adverse weather conditions in fisheries; (viii) forestry; (ix) promotion of food sector products not listed in Annex I of the TFEU; (x) conservation of marine and freshwater biological resources; (xi) sports; (xii) residents of remote regions, for transport, when this aid has a social character and is granted without discrimination related to the identity of the carrier; (xiii) basic broadband infrastructure, small individual infrastructure measures covering next-generation access networks, broadband-related civil engineering works and passive broadband infrastructure, in areas where there is either no such infrastructure or where no such infrastructure is likely to be developed in the near future; (xiv) infrastructure in support of the objectives listed in (i) to (xiii) and in point (b) of this paragraph and in support of other objectives of common interest, in particular the Europe 2020 objectives; (a) aid in favour of: (i) small and medium-sized enterprises; (ii) research, development and innovation; (iii) environmental protection; (iv) employment and training; (v) culture and heritage conservation; (vi) making good the damage caused by natural disasters; (vii) making good the damage caused by certain adverse weather conditions in fisheries; (viii) forestry; (ix) promotion of food sector products not listed in Annex I of the TFEU; (x) conservation of marine and freshwater biological resources; (xi) sports; (xii) residents of remote regions, for transport, when this aid has a social character and is granted without discrimination related to the identity of the carrier; (xiii) basic broadband infrastructure, small individual infrastructure measures covering next-generation access networks, broadband-related civil engineering works and passive broadband infrastructure, in areas where there is either no such infrastructure or where no such infrastructure is likely to be developed in the near future; (xiv) infrastructure in support of the objectives listed in (i) to (xiii) and in point (b) of this paragraph and in support of other objectives of common interest, in particular the Europe 2020 objectives; (b) aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. 2. The Regulations referred to in paragraph 1 shall specify for each category of aid: (a) the purpose of the aid; (b) the categories of beneficiaries; (c) thresholds expressed in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts or, for certain types of aid where it may be difficult to identify the aid intensity or amount of aid precisely, in particular financial engineering instruments or risk capital investments or those of a similar nature, in terms of the maximum level of State support in or related to that measure, without prejudice to the qualification of the measures concerned in the light of Article 107(1) of the TFEU; (d) the conditions governing the cumulation of aid; (e) the conditions of monitoring as specified in Article 3. 3. In addition, the regulations referred to in paragraph 1 may, in particular: (a) set thresholds or other conditions for the notification of awards of individual aid; (b) exclude certain sectors from their scope; (c) attach further conditions for the compatibility of aid exempted under such regulations.
Article 2 De minimis
1. The Commission may, by means of a Regulation adopted in accordance with the procedure laid down in Article 8 of this Regulation, decide that, having regard to the development and functioning of the common market, certain aids do not meet all the criteria of Article 92(1) and that they are therefore exempted from the notification procedure provided for in Article 93(3), provided that aid granted to the same undertaking over a given period of time does not exceed a certain fixed amount. 2. At the Commission's request, Member States shall, at any time, communicate to it any additional information relating to aid exempted under paragraph 1.
Article 3 Transparency and monitoring
1. When adopting regulations pursuant to Article 1, the Commission shall impose detailed rules upon Member States to ensure transparency and monitoring of the aid exempted from notification in accordance with those regulations. Such rules shall consist, in particular, of the requirements laid down in paragraphs 2, 3 and 4. 2. On implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems. 3. Member States shall record and compile all the information regarding the application of the group exemptions. If the Commission has information which leads it to doubt that an exemption regulation is being applied properly, the Member States shall forward to it any information it considers necessary to assess whether an aid complies with that regulation. 4. At least once a year, Member States shall supply the Commission with a report on the application of group exemptions, in accordance with the Commission's specific requirements, preferably in computerised form. The Commission shall make access to those reports available to all the Member States. The Advisory Committee referred to in Article 7 shall examine and evaluate those reports once a year.
Amendment rationale: CONTEXT OF THE PROPOSAL In the interest of enforcement and to simplify administration without weakening Commission monitoring, 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 (hereinafter the ‘Enabling Regulation’)[1] allows the Commission to declare, by means of regulations, that certain categories of State aid are compatible with the common market and are exempted from the notification requirement provided for in Article 108(3) of the TFEU. The categories concerned include de minimis aid[2], aid to small and medium-sized enterprises, aid for research and development, environmental protection or employment and training, and aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. The Commission indicated in its Communication on State aid Modernisation of 8 May 2012[3] that State aid enforcement should focus on cases with the biggest impact on the internal market. This implies on the one hand stronger scrutiny of large and potentially distortive aid, and on the other simplified analysis of cases with only limited effect on trade and limited potential to seriously distort competition. The latter can be achieved by reviewing the regime of exemptions, in particular the scope of Council Regulation (EC) No 994/98, which would enable the Commission to block-exempt further categories of aid from the notification requirement, in addition to the categories already included in the current Enabling Regulation. The proposal to include certain new categories in the Enabling Regulation entails neither the immediate block exemption of all these categories, nor does it mean that all measures within a category would be block-exempted in their entirety. Rather, it enables the Commission to adopt block exemptions gradually, when experience acquired is sufficient to allow the Commission to define clear compatibility criteria for certain types of aid measures, ensuring that the effect on competition and trade between Member States is limited. The same approach has been followed under the current Enabling Regulation: the first block exemptions were adopted in 2001 (training aid, aid to SMEs), while for other types of aid the first exemptions were adopted only at a later stage, once sufficient experience had been acquired (employment aid in 2002, regional aid in 2006, and R&D and environmental aid in 2008 with the adoption of GBER[4]). More frequent revisions of the Enabling Regulation may in the future be needed, in particular to have due regard to the investments required by and compatible with the development of the internal market, in the light of the experience gained. Following a decision on the next Multiannual Financial Framework, the Commission will also assess without delay the possibilities to simplify the State aid procedures for projects co-financed under the EU structural policies. New categories proposed for inclusion in the Enabling Regulation · State aid in the culture and heritage conservation sectors Council Regulation No 994/98 authorises the Commission to adopt an exemption regulation for all categories of State aid to SMEs. Therefore, on this basis the Commission could block-exempt State aid to SMEs in the culture and heritage conservation sectors as defined in Article 167 TFEU under the current Enabling Regulation. This would be of only limited use, though, as the recipients of State aid, in particular in the cinema and audio-visual sectors, are often large companies. These cases generate a substantial workload for the Commission and Member States, even though they are often routine cases involving limited aid amounts. Once this category of aid is included in the Enabling Regulation, the Commission will be able to adopt block exemptions, for example for measures that meet the criteria of the revised Cinema Communication or for measures for heritage conservation or culture promotion, which usually have only limited effect on trade (e.g. numerous individual notifications of restoration of classified buildings or monuments). Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid. · State aid in relation to natural disasters Regarding State aid to compensate for the damage caused by natural disasters, Council Regulation No 994/98 would, as explained above, authorise the Commission to exempt aid granted to SMEs, but does not allow aid to large companies. Block-exempting such natural disaster aid would allow Member States to react rapidly when a natural disaster occurs in order to compensate for the damage caused. The Commission has meanwhile acquired sufficient experience with this type of aid and is able to define clear ex ante conditions of compatibility. If the aid is clearly defined, limited to material damage directly caused by the disaster and in an amount verified by an independent body, exemption from the notification obligation would be justified. Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid, even for large companies. · State aid in relation to certain adverse weather conditions in fisheries Member States are also required to notify to the Commission State aid measures to make good the damage caused by certain adverse weather conditions in fisheries. The amounts granted in this area are usually limited and clear compatibility conditions can be defined. Regulation (EC) No 994/98 authorises the Commission to exempt such aid from the notification requirement only if it is granted to SMEs. However, large companies may also be affected by adverse weather conditions in fisheries. The Commission has meanwhile acquired sufficient experience with this type of aid and clear compatibility conditions can be defined on this basis. Council Regulation No 994/98 should be amended accordingly to cover this category of State aid. · State aid for innovation Council Regulation No 994/98 explicitly covers research and development, but not innovation. Innovation has since become an EU objective as part of the Innovation Union initiative. For example aid towards process and organisational innovation in services and aid for innovation clusters may not be distortive as long as targeted conditions are respected. Aid for product and technological innovation, including support for demonstration projects and prototypes, is instead already included in Article 30 of the GBER. Council Regulation No 994/98 should be amended accordingly so that aid for innovation could be exempted in the future. · State aid for forestry and promotion of non-Annex-I products in the food sector According to Article 42 TFEU the rules on competition apply to the production of and trade in agricultural products only to the extent laid down by the European Parliament and the Council. However, certain measures which are not covered by Article 42 TFEU and to which the general competition rules apply are contained in the rural development programmes or favour the promotion and advertising of non-Annex I products in the food sector and have been subject to specific compatibility conditions under the State aid rules. This is in particular true of forestry and aid for the promotion of non-Annex-I products in the food sector. So far, this type of aid could only be block-exempted if it was limited to SMEs. In view of the broad experience with this type of measures, allowing the formulation of clear compatibility conditions, Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for the conservation of marine biological resources According to Article 7 of Council Regulation of 27 July 2006 (EC) No 1198/2006 on the European Fisheries Fund[5], Articles 107, 108 and 109 of the Treaty shall apply to aid granted by the Member States to enterprises in the fisheries sector, except for payments made by Member States pursuant to, and in conformity with, Regulation (EC) No 1198/2006. Additional State aid for the conservation of marine biological resources usually has limited effects on intra-Union trade, contributes to the EU objectives in the field of maritime and fisheries policy and does not create serious distortions of competition. Furthermore, the amounts granted are usually limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for amateur sports While a considerable number of cases relating to amateur sports does not even constitute aid, others usually have limited effects on intra-Union trade and do not create serious distortions of competition; furthermore, the amounts granted are typically limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · Social aid to residents of remote regions for transport In the area of transport, specific rules already exist, in particular Council Regulation No 1370/2007 on road and rail passenger transport services of general economic interest. However, there are no specific rules regarding aid for air and maritime transport. Within these sectors, the Commission has acquired sufficient experience to formulate general compatibility criteria for social aid to residents of remote regions for transport (mainly outermost regions and islands/peninsulas assimilated as islands in the continental EU). This aid tends to be relatively minor and does not create significant distortions of competition. Council Regulation No 994/98 should be amended accordingly so that this category of State aid could in future be exempted. · State aid for the transport sector pursuant to Article 93 TFEU Article 9 of Regulation No 1370/2007 currently exempts from the prior notification requirement laid down in Article 108(3) TFEU public service compensation for the operation of public passenger transport services or for complying with tariff obligations established through general rules paid in accordance with that Regulation. Under the division of competences between the Council and Commission established by the Lisbon Treaty, set out in Articles 108(4) and 109 TFEU, it is for the Council to determine the categories of aid exempt from State aid notification, but for the Commission to establish the detailed rules relating to such exemption. In order to bring the public service compensation exemption into line with these provisions, this category should be brought under the scope of Council Regulation No 994/98. Article 9 of Regulation No 1370/2007 should cease to apply six months after the entry into force of a regulation adopted by the Commission concerning this category of State aid. The Commission currently expects such a block exemption would however reproduce the substance of the current exemption, except to the extent that Regulation 1370/2007 is amended by planned legislative proposals relating to the rail sector. · State aid for certain broadband infrastructure In recent years, the Commission has acquired vast experience with aid for the broadband sector and has devised guidelines. On that basis the Commission is able to formulate precise compatibility criteria allowing block exemption with regard to aid for certain types of broadband infrastructure under specific conditions. This applies to aid covering basic broadband in regions where there is no broadband infrastructure and where no such infrastructure is likely to be developed in the near future (‘white’ areas), and small individual aid measures covering very high-speed next-generation access (‘NGA’) networks in ‘white NGA’ areas. Moreover, aid for broadband-related civil engineering works and passive broadband infrastructure could be block exempted. Support for civil engineering works in many cases constitutes aid if it concerns the installation of dedicated telecommunication infrastructure (ducts). Passive broadband infrastructure covers the installation of both ducts and dark fibres. It is pro-competitive since it can be used by different operators (fixed, wireless, mobile), has no predetermined access or technology, and is typically owned by public authorities who have no interest to discriminate between operators. A block exemption for civil engineering works and passive broadband infrastructure could speed up investments since (small) local authorities often prefer to support this, rather than adopting broadband schemes and having to comply with their more extensive State aid conditions. The Commission has acquired sufficient case experience in the area of aid to passive infrastructure. A block exemption may trigger increasing use in rural areas where existing passive infrastructure is not adequate. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could in future be exempted. Specifying block-exempted aid categories Article 1(2)(c) specifies that for each category of block-exempted aid the thresholds should be ‘expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts’. Given the development of new forms of State support, such as financial engineering instruments or different forms of risk capital, the Commission considers that the way these thresholds are set should be updated to include the possibility of block exemption for these new forms of State support too. It should therefore be possible to define the thresholds not only in terms of aid intensities or maximum aid amounts, but also in terms of maximum level of State support, whether it qualifies as State aid in the meaning of Article 107(1) TFEU or not. Council Regulation No 994/98 should be amended accordingly. Provisions concerning transparency Article 3(2) of Regulation No 994/98 provides that, ‘On implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems.’ In 1998, when Regulation No 994/98 was adopted, publishing these summaries in the Official Journal was the most appropriate means. However, as the number of official languages has increased and the communication media have evolved, publishing the summaries on the Commission’s website would increase transparency, shorten publication deadlines and reduce the administrative workload, since it has become equally easy for interested parties, particularly businesses, to consult the Commission’s website or the Official Journal. The obligation to publish the above summaries in the Official Journal should therefore be replaced by the obligation to publish on the Commission’s website. Council Regulation No 994/98 should be amended accordingly. Provisions relating to the procedure for Commission adoption of exemption regulations Pursuant to Article 8 of Regulation No 994/98, the Commission must consult the Advisory Committee on State Aid before publishing any draft block exemption regulation. The Commission believes that to enable interested parties to submit their comments and thus ensure greater transparency, the draft regulations should be published at the same time as the Advisory Committee is consulted. Given the way new electronic communications media have developed, the Commission believes that the fastest and most effective way of publishing draft regulations is on its website rather than in the Official Journal. This gives interested parties a better opportunity to comment and reduces administrative burden and delay. The above-mentioned provisions in Article 8 of Council Regulation No 994/98 should be amended accordingly.
Revised version (Article 3 Transparency and monitoring):
1. When adopting regulations pursuant to Article 1, the Commission shall impose detailed rules upon Member States to ensure transparency and monitoring of the aid exempted from notification in accordance with those regulations. Such rules shall consist, in particular, of the requirements laid down in paragraphs 2, 3 and 4. 2. Upon implementing aid systems or individual aids granted outside any system, which have been exempted pursuant to regulations referred to in Article 1(1), Member States shall forward to the Commission, with a view to publication on the website of the Commission, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems. 3. Member States shall record and compile all the information regarding the application of the group exemptions. If the Commission has information which leads it to doubt that an exemption regulation is being applied properly, the Member States shall forward to it any information it considers necessary to assess whether an aid complies with that regulation. 4. At least once a year, Member States shall supply the Commission with a report on the application of group exemptions, in accordance with the Commission’s specific requirements, preferably in computerised form. The Commission shall make access to those reports available to all the Member States. The Advisory Committee referred to in Article 7 shall examine and evaluate those reports once a year.
Article 4 Period of validity and amendment of regulations
1. Regulations adopted pursuant to Articles 1 and 2 shall apply for a specific period. Aid exempted by a regulation adopted pursuant to Articles 1 and 2 shall be exempted for the period of validity of that regulation and for the adjustment period provided for in paragraphs 2 and 3. 2. Regulations adopted pursuant to Articles 1 and 2 may be repeated or amended where circumstances have changed with respect to any important element that constituted grounds for their adoption or where the progressive development or the functioning of the common market so requires. In that case the new regulation shall set a period of adjustment of six months for the adjustment of aid covered by the previous regulation. 3. Regulations adopted pursuant to Articles 1 and 2 shall provide for a period as referred to in paragraph 2, should their application not be extended when they expire.
Article 5 Evaluation report
Every five years the Commission shall submit a report to the European Parliament and to the Council on the application of this Regulation. It shall submit a draft report for consideration by the Advisory Committee referred to in Article 7.
Article 6 Hearing of interested parties
Where the Commission intends to adopt a regulation, it shall publish a draft thereof to enable all interested persons and organisations to submit their comments to it within a reasonable time limit to be fixed by the Commission and which may not under any circumstances be less than one month.
Article 7 Advisory committee
An advisory committee, hereinafter referred to as the Advisory Committee on State Aid, shall be set up. It shall be composed of representatives of the Member States and chaired by the representative of the Commission.
Article 8 Consultation of the Advisory Committee
1. The Commission shall consult the Advisory Committee on State Aid: (a) before publishing any draft regulation; (b) before adopting any regulation. 2. Consultation of the Committee shall take place at a meeting called by the Commission. The drafts and documents to be examined shall be annexed to the notification. The meeting shall take place no earlier than two months after notification has been sent. This period may be reduced in the case of the consultations referred to in paragraph 1(b), when urgent or for simple extension of a regulation. 3. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft, within a time limit which the Chairman may lay down according to the urgency of the matter, if necessary by taking a vote. 4. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes. The Advisory Committee may recommend publication of the opinion in the Official Journal of the European Communities . 5. The Commission shall take the utmost account of the opinion delivered by the Committee. It shall inform the Committee of the manner in which its opinion has been taken into account.
Amendment rationale: CONTEXT OF THE PROPOSAL In the interest of enforcement and to simplify administration without weakening Commission monitoring, 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 (hereinafter the ‘Enabling Regulation’)[1] allows the Commission to declare, by means of regulations, that certain categories of State aid are compatible with the common market and are exempted from the notification requirement provided for in Article 108(3) of the TFEU. The categories concerned include de minimis aid[2], aid to small and medium-sized enterprises, aid for research and development, environmental protection or employment and training, and aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. The Commission indicated in its Communication on State aid Modernisation of 8 May 2012[3] that State aid enforcement should focus on cases with the biggest impact on the internal market. This implies on the one hand stronger scrutiny of large and potentially distortive aid, and on the other simplified analysis of cases with only limited effect on trade and limited potential to seriously distort competition. The latter can be achieved by reviewing the regime of exemptions, in particular the scope of Council Regulation (EC) No 994/98, which would enable the Commission to block-exempt further categories of aid from the notification requirement, in addition to the categories already included in the current Enabling Regulation. The proposal to include certain new categories in the Enabling Regulation entails neither the immediate block exemption of all these categories, nor does it mean that all measures within a category would be block-exempted in their entirety. Rather, it enables the Commission to adopt block exemptions gradually, when experience acquired is sufficient to allow the Commission to define clear compatibility criteria for certain types of aid measures, ensuring that the effect on competition and trade between Member States is limited. The same approach has been followed under the current Enabling Regulation: the first block exemptions were adopted in 2001 (training aid, aid to SMEs), while for other types of aid the first exemptions were adopted only at a later stage, once sufficient experience had been acquired (employment aid in 2002, regional aid in 2006, and R&D and environmental aid in 2008 with the adoption of GBER[4]). More frequent revisions of the Enabling Regulation may in the future be needed, in particular to have due regard to the investments required by and compatible with the development of the internal market, in the light of the experience gained. Following a decision on the next Multiannual Financial Framework, the Commission will also assess without delay the possibilities to simplify the State aid procedures for projects co-financed under the EU structural policies. New categories proposed for inclusion in the Enabling Regulation · State aid in the culture and heritage conservation sectors Council Regulation No 994/98 authorises the Commission to adopt an exemption regulation for all categories of State aid to SMEs. Therefore, on this basis the Commission could block-exempt State aid to SMEs in the culture and heritage conservation sectors as defined in Article 167 TFEU under the current Enabling Regulation. This would be of only limited use, though, as the recipients of State aid, in particular in the cinema and audio-visual sectors, are often large companies. These cases generate a substantial workload for the Commission and Member States, even though they are often routine cases involving limited aid amounts. Once this category of aid is included in the Enabling Regulation, the Commission will be able to adopt block exemptions, for example for measures that meet the criteria of the revised Cinema Communication or for measures for heritage conservation or culture promotion, which usually have only limited effect on trade (e.g. numerous individual notifications of restoration of classified buildings or monuments). Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid. · State aid in relation to natural disasters Regarding State aid to compensate for the damage caused by natural disasters, Council Regulation No 994/98 would, as explained above, authorise the Commission to exempt aid granted to SMEs, but does not allow aid to large companies. Block-exempting such natural disaster aid would allow Member States to react rapidly when a natural disaster occurs in order to compensate for the damage caused. The Commission has meanwhile acquired sufficient experience with this type of aid and is able to define clear ex ante conditions of compatibility. If the aid is clearly defined, limited to material damage directly caused by the disaster and in an amount verified by an independent body, exemption from the notification obligation would be justified. Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid, even for large companies. · State aid in relation to certain adverse weather conditions in fisheries Member States are also required to notify to the Commission State aid measures to make good the damage caused by certain adverse weather conditions in fisheries. The amounts granted in this area are usually limited and clear compatibility conditions can be defined. Regulation (EC) No 994/98 authorises the Commission to exempt such aid from the notification requirement only if it is granted to SMEs. However, large companies may also be affected by adverse weather conditions in fisheries. The Commission has meanwhile acquired sufficient experience with this type of aid and clear compatibility conditions can be defined on this basis. Council Regulation No 994/98 should be amended accordingly to cover this category of State aid. · State aid for innovation Council Regulation No 994/98 explicitly covers research and development, but not innovation. Innovation has since become an EU objective as part of the Innovation Union initiative. For example aid towards process and organisational innovation in services and aid for innovation clusters may not be distortive as long as targeted conditions are respected. Aid for product and technological innovation, including support for demonstration projects and prototypes, is instead already included in Article 30 of the GBER. Council Regulation No 994/98 should be amended accordingly so that aid for innovation could be exempted in the future. · State aid for forestry and promotion of non-Annex-I products in the food sector According to Article 42 TFEU the rules on competition apply to the production of and trade in agricultural products only to the extent laid down by the European Parliament and the Council. However, certain measures which are not covered by Article 42 TFEU and to which the general competition rules apply are contained in the rural development programmes or favour the promotion and advertising of non-Annex I products in the food sector and have been subject to specific compatibility conditions under the State aid rules. This is in particular true of forestry and aid for the promotion of non-Annex-I products in the food sector. So far, this type of aid could only be block-exempted if it was limited to SMEs. In view of the broad experience with this type of measures, allowing the formulation of clear compatibility conditions, Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for the conservation of marine biological resources According to Article 7 of Council Regulation of 27 July 2006 (EC) No 1198/2006 on the European Fisheries Fund[5], Articles 107, 108 and 109 of the Treaty shall apply to aid granted by the Member States to enterprises in the fisheries sector, except for payments made by Member States pursuant to, and in conformity with, Regulation (EC) No 1198/2006. Additional State aid for the conservation of marine biological resources usually has limited effects on intra-Union trade, contributes to the EU objectives in the field of maritime and fisheries policy and does not create serious distortions of competition. Furthermore, the amounts granted are usually limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for amateur sports While a considerable number of cases relating to amateur sports does not even constitute aid, others usually have limited effects on intra-Union trade and do not create serious distortions of competition; furthermore, the amounts granted are typically limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · Social aid to residents of remote regions for transport In the area of transport, specific rules already exist, in particular Council Regulation No 1370/2007 on road and rail passenger transport services of general economic interest. However, there are no specific rules regarding aid for air and maritime transport. Within these sectors, the Commission has acquired sufficient experience to formulate general compatibility criteria for social aid to residents of remote regions for transport (mainly outermost regions and islands/peninsulas assimilated as islands in the continental EU). This aid tends to be relatively minor and does not create significant distortions of competition. Council Regulation No 994/98 should be amended accordingly so that this category of State aid could in future be exempted. · State aid for the transport sector pursuant to Article 93 TFEU Article 9 of Regulation No 1370/2007 currently exempts from the prior notification requirement laid down in Article 108(3) TFEU public service compensation for the operation of public passenger transport services or for complying with tariff obligations established through general rules paid in accordance with that Regulation. Under the division of competences between the Council and Commission established by the Lisbon Treaty, set out in Articles 108(4) and 109 TFEU, it is for the Council to determine the categories of aid exempt from State aid notification, but for the Commission to establish the detailed rules relating to such exemption. In order to bring the public service compensation exemption into line with these provisions, this category should be brought under the scope of Council Regulation No 994/98. Article 9 of Regulation No 1370/2007 should cease to apply six months after the entry into force of a regulation adopted by the Commission concerning this category of State aid. The Commission currently expects such a block exemption would however reproduce the substance of the current exemption, except to the extent that Regulation 1370/2007 is amended by planned legislative proposals relating to the rail sector. · State aid for certain broadband infrastructure In recent years, the Commission has acquired vast experience with aid for the broadband sector and has devised guidelines. On that basis the Commission is able to formulate precise compatibility criteria allowing block exemption with regard to aid for certain types of broadband infrastructure under specific conditions. This applies to aid covering basic broadband in regions where there is no broadband infrastructure and where no such infrastructure is likely to be developed in the near future (‘white’ areas), and small individual aid measures covering very high-speed next-generation access (‘NGA’) networks in ‘white NGA’ areas. Moreover, aid for broadband-related civil engineering works and passive broadband infrastructure could be block exempted. Support for civil engineering works in many cases constitutes aid if it concerns the installation of dedicated telecommunication infrastructure (ducts). Passive broadband infrastructure covers the installation of both ducts and dark fibres. It is pro-competitive since it can be used by different operators (fixed, wireless, mobile), has no predetermined access or technology, and is typically owned by public authorities who have no interest to discriminate between operators. A block exemption for civil engineering works and passive broadband infrastructure could speed up investments since (small) local authorities often prefer to support this, rather than adopting broadband schemes and having to comply with their more extensive State aid conditions. The Commission has acquired sufficient case experience in the area of aid to passive infrastructure. A block exemption may trigger increasing use in rural areas where existing passive infrastructure is not adequate. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could in future be exempted. Specifying block-exempted aid categories Article 1(2)(c) specifies that for each category of block-exempted aid the thresholds should be ‘expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts’. Given the development of new forms of State support, such as financial engineering instruments or different forms of risk capital, the Commission considers that the way these thresholds are set should be updated to include the possibility of block exemption for these new forms of State support too. It should therefore be possible to define the thresholds not only in terms of aid intensities or maximum aid amounts, but also in terms of maximum level of State support, whether it qualifies as State aid in the meaning of Article 107(1) TFEU or not. Council Regulation No 994/98 should be amended accordingly. Provisions concerning transparency Article 3(2) of Regulation No 994/98 provides that, ‘On implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems.’ In 1998, when Regulation No 994/98 was adopted, publishing these summaries in the Official Journal was the most appropriate means. However, as the number of official languages has increased and the communication media have evolved, publishing the summaries on the Commission’s website would increase transparency, shorten publication deadlines and reduce the administrative workload, since it has become equally easy for interested parties, particularly businesses, to consult the Commission’s website or the Official Journal. The obligation to publish the above summaries in the Official Journal should therefore be replaced by the obligation to publish on the Commission’s website. Council Regulation No 994/98 should be amended accordingly. Provisions relating to the procedure for Commission adoption of exemption regulations Pursuant to Article 8 of Regulation No 994/98, the Commission must consult the Advisory Committee on State Aid before publishing any draft block exemption regulation. The Commission believes that to enable interested parties to submit their comments and thus ensure greater transparency, the draft regulations should be published at the same time as the Advisory Committee is consulted. Given the way new electronic communications media have developed, the Commission believes that the fastest and most effective way of publishing draft regulations is on its website rather than in the Official Journal. This gives interested parties a better opportunity to comment and reduces administrative burden and delay. The above-mentioned provisions in Article 8 of Council Regulation No 994/98 should be amended accordingly.
Revised version (Article 8 Consultation of the Advisory Committee):
1. The Commission shall consult the Advisory Committee on State Aid: (a) at the same time as publishing any draft regulation in accordance with Article 6; (b) before adopting any regulation. 2. Consultation of the Committee shall take place at a meeting called by the Commission. The drafts and documents to be examined shall be annexed to the notification and may be published on the Commission website. e meeting shall take place no earlier than two months after notification has been sent. This period may be reduced in the case of the consultations referred to in paragraph 1(b), when urgent or for simple extension of a regulation. 3. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. The Committee shall deliver its opinion on the draft, within a time limit which the Chairman may lay down according to the urgency of the matter, if necessary by taking a vote. 4. The opinion shall be recorded in the minutes; in addition, each Member State shall have the right to ask to have its position recorded in the minutes. The Advisory Committee may recommend publication of the opinion in the Official Journal of the European Communities . 5. The Commission shall take the utmost account of the opinion delivered by the Committee. It shall inform the Committee of the manner in which its opinion has been taken into account.
Article 9 Final provisions
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities . This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 7 May 1998. For the Council The President M. BECKETT This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 7 May 1998
Amendment rationale: CONTEXT OF THE PROPOSAL In the interest of enforcement and to simplify administration without weakening Commission monitoring, 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 (hereinafter the ‘Enabling Regulation’)[1] allows the Commission to declare, by means of regulations, that certain categories of State aid are compatible with the common market and are exempted from the notification requirement provided for in Article 108(3) of the TFEU. The categories concerned include de minimis aid[2], aid to small and medium-sized enterprises, aid for research and development, environmental protection or employment and training, and aid that complies with the map approved by the Commission for each Member State for the grant of regional aid. The Commission indicated in its Communication on State aid Modernisation of 8 May 2012[3] that State aid enforcement should focus on cases with the biggest impact on the internal market. This implies on the one hand stronger scrutiny of large and potentially distortive aid, and on the other simplified analysis of cases with only limited effect on trade and limited potential to seriously distort competition. The latter can be achieved by reviewing the regime of exemptions, in particular the scope of Council Regulation (EC) No 994/98, which would enable the Commission to block-exempt further categories of aid from the notification requirement, in addition to the categories already included in the current Enabling Regulation. The proposal to include certain new categories in the Enabling Regulation entails neither the immediate block exemption of all these categories, nor does it mean that all measures within a category would be block-exempted in their entirety. Rather, it enables the Commission to adopt block exemptions gradually, when experience acquired is sufficient to allow the Commission to define clear compatibility criteria for certain types of aid measures, ensuring that the effect on competition and trade between Member States is limited. The same approach has been followed under the current Enabling Regulation: the first block exemptions were adopted in 2001 (training aid, aid to SMEs), while for other types of aid the first exemptions were adopted only at a later stage, once sufficient experience had been acquired (employment aid in 2002, regional aid in 2006, and R&D and environmental aid in 2008 with the adoption of GBER[4]). More frequent revisions of the Enabling Regulation may in the future be needed, in particular to have due regard to the investments required by and compatible with the development of the internal market, in the light of the experience gained. Following a decision on the next Multiannual Financial Framework, the Commission will also assess without delay the possibilities to simplify the State aid procedures for projects co-financed under the EU structural policies. New categories proposed for inclusion in the Enabling Regulation · State aid in the culture and heritage conservation sectors Council Regulation No 994/98 authorises the Commission to adopt an exemption regulation for all categories of State aid to SMEs. Therefore, on this basis the Commission could block-exempt State aid to SMEs in the culture and heritage conservation sectors as defined in Article 167 TFEU under the current Enabling Regulation. This would be of only limited use, though, as the recipients of State aid, in particular in the cinema and audio-visual sectors, are often large companies. These cases generate a substantial workload for the Commission and Member States, even though they are often routine cases involving limited aid amounts. Once this category of aid is included in the Enabling Regulation, the Commission will be able to adopt block exemptions, for example for measures that meet the criteria of the revised Cinema Communication or for measures for heritage conservation or culture promotion, which usually have only limited effect on trade (e.g. numerous individual notifications of restoration of classified buildings or monuments). Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid. · State aid in relation to natural disasters Regarding State aid to compensate for the damage caused by natural disasters, Council Regulation No 994/98 would, as explained above, authorise the Commission to exempt aid granted to SMEs, but does not allow aid to large companies. Block-exempting such natural disaster aid would allow Member States to react rapidly when a natural disaster occurs in order to compensate for the damage caused. The Commission has meanwhile acquired sufficient experience with this type of aid and is able to define clear ex ante conditions of compatibility. If the aid is clearly defined, limited to material damage directly caused by the disaster and in an amount verified by an independent body, exemption from the notification obligation would be justified. Council Regulation No 994/98 should be amended accordingly to cover these categories of State aid, even for large companies. · State aid in relation to certain adverse weather conditions in fisheries Member States are also required to notify to the Commission State aid measures to make good the damage caused by certain adverse weather conditions in fisheries. The amounts granted in this area are usually limited and clear compatibility conditions can be defined. Regulation (EC) No 994/98 authorises the Commission to exempt such aid from the notification requirement only if it is granted to SMEs. However, large companies may also be affected by adverse weather conditions in fisheries. The Commission has meanwhile acquired sufficient experience with this type of aid and clear compatibility conditions can be defined on this basis. Council Regulation No 994/98 should be amended accordingly to cover this category of State aid. · State aid for innovation Council Regulation No 994/98 explicitly covers research and development, but not innovation. Innovation has since become an EU objective as part of the Innovation Union initiative. For example aid towards process and organisational innovation in services and aid for innovation clusters may not be distortive as long as targeted conditions are respected. Aid for product and technological innovation, including support for demonstration projects and prototypes, is instead already included in Article 30 of the GBER. Council Regulation No 994/98 should be amended accordingly so that aid for innovation could be exempted in the future. · State aid for forestry and promotion of non-Annex-I products in the food sector According to Article 42 TFEU the rules on competition apply to the production of and trade in agricultural products only to the extent laid down by the European Parliament and the Council. However, certain measures which are not covered by Article 42 TFEU and to which the general competition rules apply are contained in the rural development programmes or favour the promotion and advertising of non-Annex I products in the food sector and have been subject to specific compatibility conditions under the State aid rules. This is in particular true of forestry and aid for the promotion of non-Annex-I products in the food sector. So far, this type of aid could only be block-exempted if it was limited to SMEs. In view of the broad experience with this type of measures, allowing the formulation of clear compatibility conditions, Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for the conservation of marine biological resources According to Article 7 of Council Regulation of 27 July 2006 (EC) No 1198/2006 on the European Fisheries Fund[5], Articles 107, 108 and 109 of the Treaty shall apply to aid granted by the Member States to enterprises in the fisheries sector, except for payments made by Member States pursuant to, and in conformity with, Regulation (EC) No 1198/2006. Additional State aid for the conservation of marine biological resources usually has limited effects on intra-Union trade, contributes to the EU objectives in the field of maritime and fisheries policy and does not create serious distortions of competition. Furthermore, the amounts granted are usually limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · State aid for amateur sports While a considerable number of cases relating to amateur sports does not even constitute aid, others usually have limited effects on intra-Union trade and do not create serious distortions of competition; furthermore, the amounts granted are typically limited. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could be exempted in the future. · Social aid to residents of remote regions for transport In the area of transport, specific rules already exist, in particular Council Regulation No 1370/2007 on road and rail passenger transport services of general economic interest. However, there are no specific rules regarding aid for air and maritime transport. Within these sectors, the Commission has acquired sufficient experience to formulate general compatibility criteria for social aid to residents of remote regions for transport (mainly outermost regions and islands/peninsulas assimilated as islands in the continental EU). This aid tends to be relatively minor and does not create significant distortions of competition. Council Regulation No 994/98 should be amended accordingly so that this category of State aid could in future be exempted. · State aid for the transport sector pursuant to Article 93 TFEU Article 9 of Regulation No 1370/2007 currently exempts from the prior notification requirement laid down in Article 108(3) TFEU public service compensation for the operation of public passenger transport services or for complying with tariff obligations established through general rules paid in accordance with that Regulation. Under the division of competences between the Council and Commission established by the Lisbon Treaty, set out in Articles 108(4) and 109 TFEU, it is for the Council to determine the categories of aid exempt from State aid notification, but for the Commission to establish the detailed rules relating to such exemption. In order to bring the public service compensation exemption into line with these provisions, this category should be brought under the scope of Council Regulation No 994/98. Article 9 of Regulation No 1370/2007 should cease to apply six months after the entry into force of a regulation adopted by the Commission concerning this category of State aid. The Commission currently expects such a block exemption would however reproduce the substance of the current exemption, except to the extent that Regulation 1370/2007 is amended by planned legislative proposals relating to the rail sector. · State aid for certain broadband infrastructure In recent years, the Commission has acquired vast experience with aid for the broadband sector and has devised guidelines. On that basis the Commission is able to formulate precise compatibility criteria allowing block exemption with regard to aid for certain types of broadband infrastructure under specific conditions. This applies to aid covering basic broadband in regions where there is no broadband infrastructure and where no such infrastructure is likely to be developed in the near future (‘white’ areas), and small individual aid measures covering very high-speed next-generation access (‘NGA’) networks in ‘white NGA’ areas. Moreover, aid for broadband-related civil engineering works and passive broadband infrastructure could be block exempted. Support for civil engineering works in many cases constitutes aid if it concerns the installation of dedicated telecommunication infrastructure (ducts). Passive broadband infrastructure covers the installation of both ducts and dark fibres. It is pro-competitive since it can be used by different operators (fixed, wireless, mobile), has no predetermined access or technology, and is typically owned by public authorities who have no interest to discriminate between operators. A block exemption for civil engineering works and passive broadband infrastructure could speed up investments since (small) local authorities often prefer to support this, rather than adopting broadband schemes and having to comply with their more extensive State aid conditions. The Commission has acquired sufficient case experience in the area of aid to passive infrastructure. A block exemption may trigger increasing use in rural areas where existing passive infrastructure is not adequate. Council Regulation No 994/98 should be amended accordingly so that these categories of State aid could in future be exempted. Specifying block-exempted aid categories Article 1(2)(c) specifies that for each category of block-exempted aid the thresholds should be ‘expressed either in terms of aid intensities in relation to a set of eligible costs or in terms of maximum aid amounts’. Given the development of new forms of State support, such as financial engineering instruments or different forms of risk capital, the Commission considers that the way these thresholds are set should be updated to include the possibility of block exemption for these new forms of State support too. It should therefore be possible to define the thresholds not only in terms of aid intensities or maximum aid amounts, but also in terms of maximum level of State support, whether it qualifies as State aid in the meaning of Article 107(1) TFEU or not. Council Regulation No 994/98 should be amended accordingly. Provisions concerning transparency Article 3(2) of Regulation No 994/98 provides that, ‘On implementation of aid systems or individual aids granted outside any system, which have been exempted pursuant to such regulations, Member States shall forward to the Commission, with a view to publication in the Official Journal of the European Communities, summaries of the information regarding such systems of aid or such individual aids as are not covered by exempted aid systems.’ In 1998, when Regulation No 994/98 was adopted, publishing these summaries in the Official Journal was the most appropriate means. However, as the number of official languages has increased and the communication media have evolved, publishing the summaries on the Commission’s website would increase transparency, shorten publication deadlines and reduce the administrative workload, since it has become equally easy for interested parties, particularly businesses, to consult the Commission’s website or the Official Journal. The obligation to publish the above summaries in the Official Journal should therefore be replaced by the obligation to publish on the Commission’s website. Council Regulation No 994/98 should be amended accordingly. Provisions relating to the procedure for Commission adoption of exemption regulations Pursuant to Article 8 of Regulation No 994/98, the Commission must consult the Advisory Committee on State Aid before publishing any draft block exemption regulation. The Commission believes that to enable interested parties to submit their comments and thus ensure greater transparency, the draft regulations should be published at the same time as the Advisory Committee is consulted. Given the way new electronic communications media have developed, the Commission believes that the fastest and most effective way of publishing draft regulations is on its website rather than in the Official Journal. This gives interested parties a better opportunity to comment and reduces administrative burden and delay. The above-mentioned provisions in Article 8 of Council Regulation No 994/98 should be amended accordingly.
Revised version (Article 9 Final provisions):
This Regulation shall enter into force on the day following its publication in the Official Journal of the European Communities . This Regulation shall be binding in its entirety and directly applicable in all Member States.