COMMISSION DECISION of 5 November 1997 approving a support mechanism for the creation of transnational joint ventures for SMEs in the Community (Text with EEA relevance) (97/761/EC)
THE COMMISSION OF THE EUROPEAN COMMUNITIES
,
Having regard to the Treaty establishing the European Community,
Having regard to Council Decision 97/15/EC of 9 December 1996 on a third multiannual programme for small and medium-sized enterprises (SMEs) in the European Union (1997 to 2000) (1), and in particular Article 3 thereof,
(1) Whereas the Commission, in its communication of 10 July 1996 on the integrated programme in favour of SMEs (2), stressed the absence of a financial instrument to help SMEs which wish to make transnational investments;
(2) Whereas, in its opinion of 31 October 1996 (3), the Economic and Social Committee considered that too few SMEs invest at transnational level and access new markets in other Member States and that this is due to the lack of a suitable financial instrument;
(3) Whereas, on 9 December 1996 in its resolution on the integrated programme (4), the Council asked the Commission to encourage SMEs to set up or develop an activity in another Member State by removing obstacles to cross-border investment and the creation of joint ventures in the European Union;
(4) Whereas the Council, in adopting Decision 97/15/EC, considered that SMEs whose activities span borders should be assisted in overcoming any structural weaknesses;
(5) Whereas, in its conclusions, the Presidency of the Amsterdam European Council of 16 and 17 June 1997 stressed the essential role played by SMEs in the internal market in promoting growth and employment in the Community and invited the Commission to present initiatives concerning the possibility of job creation;
(6) Whereas the European Parliament, in its resolution of 24 May 1996 on the European Observatory for SMEs (5) calls on the Commission to implement measures best suited to strengthening transnational cooperation between SMEs;
(7) Whereas the countries of the European Economic Area have expressed their interest in the initiative;
(8) Whereas SMEs have not benefited sufficiently from the opportunities offered by the internal market and, faced with the globalization of trade, SMEs' traditional markets are shrinking;
(9) Whereas the development of joint ventures between Community SMEs makes it possible to make better use of the opportunities of the internal market, to increase investment and trade and to have a positive impact on employment and economic growth;
(10) Whereas SMEs frequently encounter difficulties in obtaining bank financing for the development of transnational joint ventures because of the higher risk for financial institutions;
(11) Whereas transnational joint ventures promote technology transfer and improve the competitiveness of the partners;
(12) Whereas the measures provided for in this Decision are in accordance with the opinion delivered by the Committee provided for in Article 4 of Decision 97/15/EC,
Description of the initiative
The initiative covered by this Decision, relating to the 'Joint European Venture` (JEV), shall consist of support for SMEs setting up transnational joint ventures within the Community.
Maximum amount per project and eligible expenses
The Community contribution is intended to cover some of the expenses incurred in setting up a joint venture.
The maximum contribution per project shall be ECU 100 000 covering:
(a) up to 50 % of the eligible expenses, with a maximum of ECU 50 000;
(b) up to 10 % of the total amount of the investment made.
Eligible expenses for the purposes of point (a) are those related to the conception and setting-up of a transnational joint venture created by European SMEs, as defined in Annexes II and I respectively. They include the expenses specified in Annex III and any other expenses which are essential for the setting-up of the joint venture.
Procedures
1. An SME which wishes to make an application under this scheme shall submit it to one of the financial intermediaries in the JEV network, referred to in Article 4. That intermediary shall be entrusted with evaluating the application and, in the event of a favourable opinion, passing it on to the Commission.
2. The Community contribution shall be paid to the SME, through the financial intermediary in accordance with the conditions set out in paragraphs 3 and 4.
3. In the case of the 50 % of the eligible expenses (with a maximum of ECU 50 000), a reimbursable advance of 50 % (maximum ECU 25 000) shall be paid as soon as the application has been accepted by the Commission.
A second payment of 50 % (maximum ECU 25 000) shall be made on presentation of supporting documents for all the expenses incurred and on the basis of a detailed final evaluation report which permits an assessment of the feasibility of the joint venture as well as the investment envisaged. After acceptance of the documents by the Commission, the reimbursable advance will be converted into a grant.
4. With regard to the investment made, a payment limited to 10 % of the amount invested shall be made after completion of the investment and on proof that the new activity has commenced.
5. Any SME benefiting from the third payment (10 % of the investment) must undertake to submit to the Commission, for a period of five years, information on the activities of the joint venture set up and, in particular, on the number of jobs created.
The Commission shall prepare annual reports based on inquiries and, where appropriate, on-site visits.
Selection procedure
Applications shall be sent to the Commission through a network of financial intermediaries comprising institutions specializing in investment financing, to be set up after a call for expressions of interest published in the Official Journal of the European Communities.
The Commission shall check the eligibility of the applications in the light of the programme objectives, in particular the employment effect.
To allow the initiative referred to in Article 1 to become operational as soon as possible, recourse shall be had initially to the network of financial intermediaries of the JOP programme (6) and the JOP Technical Assistance Unit, which is specialized in monitoring projects. A maximum of 5 % of the budget shall be reserved to cover the external management costs of the initiative.