Important legal notice

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E1999C0329

Decision of the EFTA Surveillance Authority No 329/99/COL of 16 December 1999 extending the period of validity of present rules and introducing new guidelines on State aid for rescuing and restructuring firms in difficulty and amending for the twenty-second time the Procedural and Substantive Rules in the field of State aid

Official Journal L 274 , 26/10/2000 P. 0001 - 0018

Decision of the EFTA Surveillance AuthorityNo 329/99/COLof 16 December 1999Extending the Period of validity of present rules and introducing new guidelines on State aid for rescuing and restructuring firms in difficulty and amending for the twenty-second time the Procedural and Substantive Rules in the field of State aidTHE EFTA SURVEILLANCE AUTHORITY,Having regard to the Agreement on the European Economic Area(1), and in particular Articles 61 to 63,Having regard to the Agreement between the EFTA States on the establishment of a Surveillance Authority and a Court of Justice(2), and in particular Article 24 and Article 1 of Protocol 3 there to,Whereas under Article 24 of the Surveillance and Court Agreement the EFTA Surveillance Authority shall give effect to the provisions concerning State aid;Whereas under Article 5(2)(b) of the Surveillance and Court Agreement the EFTA Surveillance authority shall issue notices or guidelines on matters dealt with in the EEA Agreement, if that Agreement or the Surveillance and Court Agreement expressly so provides or if the EFTA Surveillance Authority considers it necessary;Recalling the Procedural and Substantive Rules in the field of State aid(3) adopted on 19 January 1994 by the EFTA Surveillance Authority(4), in particular the provisions contained in Chapter 16 (Aid for rescuing and restructuring firms in difficulty) thereof;Recalling that the current rules on aid for rescuing and restructuring firms in difficulty, initially adopted on 19 October 1994(5) and extended by the Authority's Decisions No 298/97 of 17 December 1997 and No 372/98 of 16 December 1998, will continue to apply until 31 December 1999;Whereas the European Commission has adopted new Community Guidelines on State aid for rescuing and restructuring firms in difficulty(6);Whereas a strict discipline shall be maintained on aid for rescuing and restructuring firms in difficulty, and a uniform application of the EEA State aid rules is to be ensured throughout the European Economic Area;Whereas according to point II under the heading "General" at the end of Annex XV to the EEA Agreement, the EFTA Surveillance Authority is to adopt, after consultation with the European Commission, acts corresponding to those adopted by the Commission, in order to maintain equal conditions of competition;Having consulted the European Commission;Whereas the EFTA Surveillance Authority has, in a multilateral meeting on State aid, consulted the EFTA States on the introduction of the new guidelines;Whereas the new guidelines introduce specific notification obligations that constitute appropriate measures under Article 1(1) of Protocol 3 to the Surveillance and Court Agreement which require the agreement of the EFTA States concerned,HAS DECIDED AS FOLLOWS:1. The State Aid Guidelines shall be amended by replacing Chapter 16 by new guidelines, "Aid for rescuing and restructuring firms in difficulty", and two new annexes (Annex XIV, Notification form for individual grants of restructuring aid and Annex XV, Notification form for rescue aid), all contained in Annex I to this Decision.2. Point 25.4(7) of Chapter 25 of the State Aid Guidelines as amended for the 14th time on 4 November 1998 shall read as follows:"An investment in fixed capital undertaken in the form of the purchase of an establishment which has closed or which would have closed had it not been purchased may also be regarded as initial investment."3. The EFTA States shall be informed of this Decision by means of a letter, together with a copy of the Decision, including Annex I, requesting them to signify their agreement to the new guidelines within six weeks of the date of this Decision, in so far as they involve appropriate measures according to Article 1(1) of Protocol 3 to the Surveillance and Court Agreement.4. The European Commission shall be informed, in accordance with point (d) of Protocol 27 the EEA Agreement, by means of a copy of the Decision, including Annex I.5. The Decision, including Annex I, shall be published in the EEA section of and the EEA Supplement to the Official Journal of the European Communities.6. The amended guidelines, as referred to in paragraphs 1 and 2 above shall enter into force on their date of publication in the Official Journal of the European Communities and in the EEA Supplement thereto. Until that date the present guidelines will continue to apply.7. The Decision shall be authentic in the English language.Done at Brussels, 16 December 1999.For the EFTA Surveillance AuthorityThe PresidentKnut Almestad(1) Hereinafter referred to as the EEA Agreement.(2) Hereinafter referred to as the Surveillance and Court Agreement.(3) Hereinafter referred to as the State Aid Guidelines.(4) Initially published in OJ L 231 of 3.9.1994 and in EEA Supplement No 32 thereto of the same date, last amendment (21st) adopted by Decision No 276/99/COL of 17.11.1999 (not yet published).(5) Published in OJ L 383, 31.12.1994 and in EEA Supplement No 59 thereto on the same date.(6) Published in OJ C 288, 9.10.1999, p. 2.ANNEX I"16. AID FOR RESCUING AND RESTRUCTURING FIRMS IN DIFFICULTY(1)16.1. Introduction1. The EFTA Surveillance Authority adopted its original Guidelines on State aid for rescuing and restructuring firms in difficulty(2) in 1994. By decision of 16 December 1998 their validity was extended until 31 December 1999(3).2. The EFTA Surveillance Authority wishes through this version of the Guidelines, the text of which builds on previous versions, to make certain changes and clarifications prompted by a number of factors. First, completion of the single market and its impact on the European Economic Area calls for a closer watch to be kept on State aid. Secondly, the European Commission's sixth and seventh surveys on State aid in the EU in the manufacturing and certain other sectors(4) reveal an increase in the volume of ad hoc aid, chiefly for rescuing and restructuring firms in difficulty. Finally, it is also desirable to further tighten the rules on rescue and restructuring aid, while taking account of the role of appropriate levels of aid in cushioning the social effects of restructuring. The EFTA Surveillance Authority therefore, like the European Commission has done already towards the EC Member States, sets about clarifying the rules applicable to rescue and restructuring aid and framing more strictly the guidelines according to which it will examine such aid.3. State aid for rescuing firms in difficulty from bankruptcy and helping them to restructure may be regarded as legitimate only under certain conditions. It may be justified, for instance, by social or regional policy considerations, by the need to take into account the beneficial role played by small and medium-sized enterprises (SMEs) in the economy or, exceptionally, by the desirability of maintaining a competitive market structure when the disappearance of firms could lead to a monopoly or tight oligopoly situation.16.2. Definitions and scope of the present Guidelines and links with other texts on State aid16.2.1. Concept of a 'a firm in difficulty'1. There is no EEA definition of what constitutes 'a firm in difficulty'. However, for the purposes of these Guidelines, the EFTA Surveillance Authority regards a firm as being in difficulty where it is unable, either through its own resources or with the funds it is able to obtain from its owners/shareholders or creditors, to stem losses which, without outside intervention by the public authorities, will almost certainly condemn it to go out of business in the short or medium term.2. In particular, a firm is, in any event and irrespective of its size, regarded as being in difficulty for the purposes of these Guidelines:(a) in the case of a limited company(5), where more than half of its registered capital has disappeared(6) and more than one quarter of that capital has been lost over the preceding 12 months; or(b) in the case of an unlimited company(7), where more than half of its capital as shown in the company accounts has disappeared and more than one quarter of that capital has been lost over the preceding 12 months; or(c) whatever the type of company concerned, where it fulfils the criteria under its domestic law for being the subject of collective insolvency proceedings.3. The usual signs of a firm being in difficulty are increasing losses, diminishing turnover, growing inventories, excess capacity, declining cash flow, mounting debt, rising interest charges and falling or nil net asset value. In acute cases the company may already have become insolvent or may be the subject of collective insolvency proceedings brought under its domestic law. In the latter case, these Guidelines apply to any aid granted in the context of such proceedings which leads to the firm continuing in business. In any event, a firm in difficulty is eligible only where, demonstrably, it cannot recover through its own resources or with the funds it obtains from its owners/shareholders or creditors.4. For the purposes of these Guidelines, a newly created firm(8) is not eligible for rescue or restructuring aid, even if its initial financial position is insecure. This is the case, for instance, where a new firm emerges from the liquidation of a previous firm or merely takes over such firm's assets.5. A company belonging to a larger business group is not normally eligible for rescue or restructuring aid, except where it can be demonstrated that the company's difficulties are its own and are not the result of an arbitrary allocation of costs within the group, and that the difficulties are too serious to be dealt with by the group itself.16.2.2. Definition of rescue and restructuring aid1. Rescue aid and restructuring aid are covered by the same set of guidelines, because in both cases the public authorities are faced with a firm in difficulties and the rescue and the restructuring are often two parts of a single operation, even if they involve different processes.2. Rescue aid is by nature temporary assistance. It should make it possible to keep an ailing firm afloat for the time needed to work out a restructuring or liquidation plan and/or for the length of time the EFTA Surveillance Authority needs to be able to reach a decision on that plan.3. Restructuring, on the other hand, should be based on a feasible, coherent and far-reaching plan to restore a firm's long-term viability. Restructuring usually involves one ore more of the following elements: the reorganisation and rationalisation of the firm's activities on to a more efficient basis, typically involving the withdrawal from loss-making activities, the restructuring of those existing activities that can be made competitive again and, possibly, diversification in the direction of new and viable activities. Financial restructuring (capital injections, debt reduction) usually has to accompany the physical restructuring. Restructuring operations within the scope of these Guidelines cannot, however, be limited to financial aid designed to make good past losses without tackling the reasons for those losses.16.2.3. Scope1. These Guidelines apply to firms in all sectors (except those covered by Article 27 and Protocol 14 to the EEA Agreement concerning coal and steel products), without prejudice to any specific rules relating to firms in difficulty in the sector concerned(9).16.2.4. Applicability of Article 61(1) of the EEA Agreement1. State aid for rescuing or restructuring firms in difficulty will, by its very nature, tend to distort competition. In so far as it affects trade between the Contracting Parties, it falls within the scope of Article 61(1) of the EEA Agreement.2. Aid for restructuring can take different forms, such as capital injections, debt write-offs, loans, relief from taxes or social security contributions, or loan guarantees. For rescues, however, and unless expressly stipulated otherwise in some other EEA text on State aid, assistance should be limited to loans or loan guarantees (see point 16.3.1).3. The source of the aid can be at any level of government(10) central, regional or local, and any 'public undertaking', as defined in Article 2 of the act referred to in point 1 of Annex XV to the EEA Agreement(11). Thus, for example, rescue or restructuring aid may come from State holding companies or public investment companies(12).4. To determine when injections of new capital by public authorities into companies they own involve aid, the criterion applied is the 'market-economy private investor' principle(13). This provides that in circumstances where a rational private investor operating in a market economy would have made the finance available the provision or guarantee of funding to a company is not regarded as involving aid.5. Where funding is provided or guaranteed by the State to an enterprise that is in financial difficulties, however, it must be deemed likely that the financial transfers involve State aid. Therefore, such financial transactions must be communicated to the EFTA Surveillance Authority in advance, where appropriate through the notification of a general scheme, in accordance with Article 1(3) of Protocol 3 to the Surveillance and Court Agreement(14). The presumption of aid is stronger in cases where there is a EEA-wide structural excess of production capacity on a market in which the recipient firm is active or where the industry as a whole is in difficulties.6. The assessment of rescue or structuring aid should not be affected by changes in the ownership of the business aided.16.2.5. Compatibility with the functioning of the EEA Agreement1. Article 61(2) and (3) of the EEA Agreement provides for the possibility of aid falling within the scope of Article 61(1) being regarded as compatible with the functioning of the EEA Agreement. Apart from cases of aid to make good the damage caused by national disasters or exceptional occurrences (Article 61(2)(b)), which are not covered here, the only basis whereby aid for rescuing or restructuring firms in difficulty can be deemed compatible is Article 61(3)(c). Under this provision the EFTA Surveillance Authority has the power to authorise 'aid to facilitate the development of certain economic activities (...) where such aid does not adversely affect trading conditions to an extent contrary to the common interest.'2. The EFTA Surveillance Authority considers that aid for rescue and restructuring may contribute to the development of economic activities without adversely affecting trade to an extent contrary to the interest of the Contracting Parties if the conditions set out in these Guidelines are met. Where the firms to be rescued or restructured are located in assisted areas, the EFTA Surveillance Authority will take the regional considerations referred to in Article 61(3)(a) and (c) into account as described in point 16.3.2.5.16.2.6. Other EEA rules1. It should be stressed that the EFTA Surveillance Authority cannot authorise aid for rescuing or restructuring firms in difficulty where the terms and conditions of the aid infringe rules in the EEA Agreement and/or Surveillance and Court Agreement other than Article 61 of the EEA Agreement or Article 1 of Protocol 3 to the Surveillance and Court Agreement.16.3. General conditions for the authorisation of rescue and/or restructuring aid notified individually to the EFTA Surveillance Authority1. This Section deals exclusively with aid measures that are notified individually to the EFTA Surveillance Authority. Under certain conditions, the EFTA Surveillance Authority may authorise rescue or restructuring aid schemes: those conditions are set out in point 16.4.16.3.1. Rescue aid1. In order to be approved by the EFTA Surveillance Authority, rescue aid as defined in point 16.2.2(2) must(15):(a) consist of liquidity support in the form of loan guarantees or loans(16). In both cases, the loan must be granted at an interest rate at least comparable to those observed for loans to healthy firms, and in particular the reference rates adopted by the EFTA Surveillance Authority;(b) be linked to loans that are to be reimbursed over a period of not more than 12 months after disbursement of the last instalment to the firm(17);(c) be warranted on the grounds of serious social difficulties and have no unduly adverse spillover effects on other EFTA States or EC Member States;(d) be accompanied on notification by an undertaking on the part of the EFTA State concerned to communicate to the EFTA Surveillance Authority, not later than six months after the rescue aid measure has been authorised, a restructuring plan or a liquidation plan or proof that the loan has been reimbursed in full and/or that the guarantee has been terminated;(e) be restricted to the amount needed to keep the firm in business for the period during which the aid is authorised (for example, covering wage and salary costs or routine supplies).2. The rescue aid will initially be authorised for not more than six months or, where the EFTA State concerned has submitted a restructuring plan within that period, until the EFTA Surveillance Authority reaches its decision on the plan. In duly substantiated exceptional circumstances and at the request of the EFTA State concerned, the EFTA Surveillance Authority may extend the initial six-month period.3. Rescue aid is a one-off operation designed to keep a company in business for a limited period, during which its future can be assessed. On the other hand, repeated rescues that would merely maintain the status quo, postpone the inevitable and in the mean time shift the attendant economic and social problems on to other, more efficient producers or other EFTA States or EC Member States cannot be allowed.4. If the EFTA State fails to communicate the information stipulated in (d) of point 16.3.1(1) above before the six-month deadline expires and does not make a duly substantiated request for the deadline to be extended, the EFTA Surveillance Authority will initiate proceedings under Article 1(2) of Protocol 3 to the Surveillance and Court Agreement.5. The approval of rescue aid does not necessarily mean that aid under a restructuring plan will subsequently be approved; such aid will have to be assessed on its own merits.16.3.2. Restructuring aid16.3.2.1. Basic principle1. Aid for restructuring raises particular competition concerns as it can shift an unfair share of the burden of structural adjustment and the attendant social and economic problems on to other producers who are managing without aid and to other EFTA States and/or EC Member States. The general principle should therefore be to allow the grant of restructuring aid only in circumstances in which it can be demonstrated that it does not run counter to the functioning of the EEA Agreement. This will only be possible if strict criteria are met, and if it is certain that any distortions of competition will be offset by the benefits flowing from the firm's survival (in particular, where it is clear that the net effect of redundancies resulting from the firm going out of business, combined with the effects on its suppliers, would exacerbate local, regional or national employment problems or, exceptionally, where the firm's disappearance would result in a monopoly or tight oligopolistic situation) and, where appropriate, there are adequate compensatory measures in favour of competitors.16.3.2.2. Conditions for the authorisation of aid1. Subject to the special provisions for assisted areas and SMEs (see points 16.3.2.5 and 16.3.2.6), the EFTA Surveillance Authority will approve aid only under the following conditions:(a) Eligibility of the firmThe firm must qualify as a firm in difficulty within the meaning of these Guidelines (see point 16.2.1).(b) Restoration of viabilityThe grant of the aid is conditional on implementation of the restructuring plan which must be endorsed by the EFTA Surveillance Authority in the case of all individual aid measures.The restructuring plan, the duration of which must be as short as possible, must restore the long-term viability of the firm within a reasonable timescale and on the basis of realistic assumptions as to future operating conditions. Restructuring aid must therefore be linked to a viable restructuring plan to which the EFTA State concerned commits itself. The plan must be submitted in all relevant detail to the EFTA Surveillance Authority and include, in particular, a market survey(18). The improvement in viability must derive mainly from internal measures contained in the restructuring plan and may be based on external factors such as variations in prices and demand over which the company has no great influence only if the market assumptions made are generally acknowledged. Restructuring must involve the abandonment of activities which would remain structurally loss-making even after restructuring.The restructuring plan should describe the circumstances that led to the company's difficulties, thereby providing a basis for assessing whether the proposed measures are appropriate. It should take account, inter alia, of the present state of and future prospects for supply and demand on the relevant product market, with scenarios reflecting best-case, worst-case and intermediate assumptions and the firm's specific strengths and weaknesses. It should enable the firm to progress towards a new structure that offers its prospects for long-term viability and enables it to stand on its own feet.The plan should provide for a turnaround that will enable the company, after completing its restructuring, to cover all its costs including depreciation and financial charges. The expected return on capital should be enough to enable the restructured firm to compete in the marketplace on its own merits.(c) Avoidance of undue distortions of competitionMeasures must be taken to mitigate as far as possible any adverse effects of the aid on competitors. Otherwise, the aid should be regarded as 'contrary to the common interest' and therefore incompatible with the functioning of the EEA Agreement.This condition usually takes the form of a limitation on the presence which the company can enjoy on its market or markets after the end of the restructuring period. Where the size of the relevant market(s)(19) is negligible at EEA level, or the firm's share of the relevant market(s) is negligible, it should be considered that there is no undue distortion of competition. This condition should accordingly be regarded as not normally applying to small or medium-sized enterprises, except where otherwise provided by rules on State aid in a particular sector.The compulsory limitation on or reduction in the company's presence on the relevant market(s) represents a compensatory factor in favour of its competitors. It should be in proportion to the distortive effects of the aid and, in particular, to the relative importance of the firm on its market or markets. The EFTA Surveillance Authority will determine the extent of the limitation or reduction on the basis of the market survey attached to the restructuring plan and, where the procedure has been initiated, on the basis of information supplied by interested parties. The reduction in the firm's presence is to be put into effect through the restructuring plan and any conditions attached thereto.A relaxation of the need for compensatory measures may be contemplated if such a reduction or limitation is likely to cause a manifest deterioration in the structure of the market, for example by having the indirect effect of creating a monopoly or a tight oligopolistic situation.Compensatory measures can take different forms according to whether or not the firm is operating in a market where there is excess capacity. In assessing whether or not there is excess capacity on a given market, the EFTA Surveillance Authority can take into account all the relevant data in its possession:(i) where there is a Community-wide or EEA-wide structural excess of production capacity in a market served by the recipient, the restructuring plan must make a contribution, in proportion to the amount of aid received and its impact on that market, to the improvement of market conditions by irreversibly reducing production capacity. A capacity reduction is irreversible when the relevant assets are rendered permanently incapable of achieving the previous rate of output, or are permanently converted to another use. The sale of capacity to competitors is not sufficient in this case, except if the plant is sold for use in a geographic market in which its continued operation is unlikely to have significant effects on the competitive situation in the EEA. The capacity reduction requirements must contribute to a reduction in the recipient firm's presence on its market or markets;(ii) where, on the other hand, there is no Community-wide or EEA-wide structural excess of production capacity in a market served by the recipient, the EFTA Surveillance Authority will nevertheless examine whether compensatory measures should be required. Where any such compensatory measures involve a reduction in the capacity of the firm concerned, the necessary reduction could be achieved through the hiving-off of assets of subsidiaries. The EFTA Surveillance Authority will have to examine the compensatory measures proposed by the EFTA State concerned, whatever form they take, and determine whether they are sufficient in scope to mitigate the potentially distortive effects of the aid on competition. In examining the necessary compensatory measures, the EFTA Surveillance Authority will take account of the state of the market, and in particular its level of growth and the extent to which demand is met.(d) Aid limited to the minimumThe amount and intensity of the aid must be limited to the strict minimum needed to enable restructuring to be undertaken in the light of the existing financial resources of the company, its shareholders or the business group to which it belongs. Aid beneficiaries will be expected to make a significant contribution to the restructuring plan from their own resources, including through the sale of assets that are not essential to the firm's survival, or from external financing at market conditions. To limit the distortive effect, the amount of the aid or the form in which the aid is granted must be such as to avoid providing the company with surplus cash which could be used for aggressive, market-distorting activities not linked to the restructuring process. The EFTA Surveillance Authority will accordingly examine the level of the firm's liabilities after restructuring, including after any postponement or reduction of its debts, particularly in the context of its continuation in business following collective insolvency proceedings brought against it under national law(20). Neither should any of the aid go to finance new investment that is not essential for restoring the firm's viability.In any event, it must be demonstrated to the EFTA Surveillance Authority that the aid will be used only for the purpose of restoring the firm's viability and that it will not enable the recipient during the implementation of the restructuring plan to expand production capacity, except in so far as this is essential for restoring viability without thereby unduly distorting competition.(e) Specific conditions attached to the authorisation of aidIn addition to the compensatory measures described in (c) above, and in the event that such provisions have not been adopted by the EFTA State concerned, the EFTA Surveillance Authority may impose any conditions and obligations it considers necessary in order to ensure that the aid does not distort competition to an extent contrary to the common interest. For example, it may require the EFTA State:(i) to take certain measures itself (e.g. to open up certain markets to other EEA operators);(ii) to impose certain obligations on the recipient firm (e.g. to refrain from acting as price leader on certain markets);(iii) to refrain from granting other types of aid to the recipient firm during the restructuring period.(f) Full implementation of restructuring plan and observance of conditionsThe company must fully implement the restructuring plan that has been accepted by the EFTA Surveillance Authority and must discharge any other obligations laid down in the EFTA Surveillance Authority decision. The EFTA Surveillance Authority will regard any failure to implement the plan or to fulfil the other obligations as misuse of the aid.Where restructuring operations cover several years and involve substantial amounts of aid, the EFTA Surveillance Authority may require payment of the restructuring aid to be split into instalments and may make payment of each instalment subject to:(i) confirmation, prior to each payment, of the satisfactory implementation of each stage in the restructuring plan, in accordance with the planned timetable, or(ii) its approval, prior to each payment, after verification that the plan is being satisfactorily implemented.(g) Monitoring and annual reportThe EFTA Surveillance Authority must be put in a position to make certain that the restructuring plan is being implemented properly, through detailed regular reports communicated by the EFTA State concerned.In the case of aid to large firms, the first of these reports will normally have to be submitted to the EFTA Surveillance Authority not later than six months after approval of the aid. Reports will subsequently have to be sent to the EFTA Surveillance Authority at least once a year, at a fixed date, until the objectives of the restructuring plan can be deemed to have been achieved. They must contain all the information the EFTA Surveillance Authority needs in order to be able to monitor the implementation of the restructuring programme, the timetable for payments to the company and its financial position and the observance of any conditions or obligations laid down in the decision approving the aid. They must in particular include all relevant information on any aid for any purpose which the company has received, either on an individual basis or under a general scheme, during the restructuring period (see point 16.5.2). Where the EFTA Surveillance Authority needs timely confirmation of certain key items of information, e.g. on closures or capacity reductions, it may require more frequent reports.In the case of aid to small or medium-sized enterprises, transmission each year of a copy of the recipient firm's balance sheet and profit and loss account will normally be sufficient, except where stricter conditions have been laid down in the decision approving the aid.16.3.2.3. 'One time, last time' condition1. In order to prevent firms being unfairly assisted, restructuring aid should be granted once only. When planned restructuring aid is notified to the EFTA Surveillance Authority, the EFTA State must specify whether the firm concerned has in the past already received restructuring aid, including aid granted before entry into force of the present Guidelines and any unnotified aid(21). If so, and where less than 10 years have elapsed since the restructuring period came to an end(22) or implementation of the plan has been halted, the EFTA Surveillance Authority will normally(23) allow further restructuring aid only in exceptional and unforeseeable circumstances for which the company is not responsible. An unforeseeable circumstance is one which could in no way be anticipated when the restructuring plan was drawn up.2. The application of this rule will in no way be affected by any changes in ownership of the recipient firm following the grant of aid or by any judicial or administrative procedure which has the effect of putting its balance sheet on a sounder footing, reducing its liabilities or wiping out its previous debts where it is the same firm that is continuing in business.3. Where a firm takes over assets of another firm, and in particular one that has been the subject of one of the procedures listed in point 16.3.2.3(2) or of collective insolvency proceedings brought under national law, and has itself already received rescue or restructuring aid, the purchaser is not subject to the 'one time, last time' requirement, provided that the following three conditions are met:(a) the purchaser is clearly separate from the old firm;(b) the purchaser has acquired the old firm's assets at market price (thereby avoiding any shifting to the new company of aid paid to the old one);(c) the winding-up or court-supervised administration and purchase of the old company are not merely devices aimed at evading application of the 'one time, last time' principle (the EFTA Surveillance Authority could determine that this is the case if, for example, the difficulties encountered by the purchaser were clearly foreseeable when it took over the assets of the old company).4. It should, however, be stressed here that, since it constitutes aid for initial investment, aid for the purchase of the assets cannot be authorised under these Guidelines (see also point 16.2.1(4)).16.3.2.4. Amendment of the restructuring plan1. Where restructuring aid has been approved, the EFTA State concerned may, during the restructuring period, ask the EFTA Surveillance Authority to agree to changes being made to the restructuring plan and the amount of the aid. The EFTA Surveillance Authority may allow such changes where they meet the following conditions:(a) the revised plan must still show a return to viability within a reasonable timescale;(b) if the amount of the aid is increased, any requisite compensatory measures must be more extensive than those initially imposed;(c) if the proposed compensatory measures are smaller than those initially planned, the amount of the aid must be correspondingly reduced;(d) the new timetable for implementation of the compensatory measures may be delayed with respect to the timetable initially adopted only for reasons outside the company's or the EFTA State's control. If that is not the case, the amount of the aid must be correspondingly reduced.16.3.2.5. Restructuring aid in assisted areas1. The EFTA Surveillance Authority will take the needs of regional development into account when assessing restructuring aid in assisted areas. The fact that an ailing firm is located in an assisted area does not, however, justify a permissive approach to aid for restructuring: in the medium to long term it does not help a region to prop up companies artificially. Furthermore, given the limited resources available to promote regional development it is in the regions' own best interest to apply these scarce resources to develop as soon as possible alternative activities that are viable and sustainable. Finally, distortions of competition must be minimised even in the case of aid to firms in assisted areas.2. Thus, the criteria listed in points 16.3.2.2, 16.3.2.3 and 16.3.2.4 are equally applicable to assisted areas, even when the needs of regional development are considered. In assisted areas, however, and unless otherwise stipulated in rules on State aid in a particular sector, the conditions for authorising aid may be less stringent as regards the implementation of compensatory measures. If regional development needs justify it, the required capacity reduction will be smaller in assisted areas than in non-assisted areas and a distinction will be drawn between areas eligible for regional aid under Article 61(3)(a) of the EEA Agreement and those eligible under Article 61(3)(c) so as to take account of the greater severity of the regional problems in the former areas.16.3.2.6. Aid for restructuring small and medium-sized enterprises1. Aid to firms in the small to medium-sized category(24) tends to affect trading conditions less than that granted to large firms. This also applies to aid to help restructuring, so that the conditions laid down in point 16.3.2.2 are applied less strictly: the grant of restructuring aid to SMEs will not usually be linked to compensatory measures (see point 16.3.2.2(1)(c)), unless otherwise stipulated in rules on State aid in a particular sector; and the requirements regarding the content of reports will be less stringent (see point 16.3.2.2(1)(g)). On the other hand, the 'one time, last time' principle (point 16.3.2.3) applies in full to SMEs.16.3.2.7. Aid to cover the social costs of restructuring1. Restructuring plans normally entail reductions in or abandonment of the affected activities. Such retrenchments are often necessary in the interests of rationalisation and efficiency, quite apart from any capacity reductions that may be required as a condition for granting aid (particularly in cases where there is a EEA-wide structural excess of production capacity - see point 16.3.2.2(1)(c)). Whatever the reason for them, such measures will generally lead to reductions in the company's workforce.2. EFTA States' labour legislation may comprise general social security schemes under which redundancy benefits and early retirement pensions are paid direct to redundant employees. Such schemes are not to be regarded as State aid falling within the scope of Article 61(1) in so far as the State deals direct with employees and the company is not involved.3. Besides direct redundancy benefit and early retirement provision for employees, general social support schemes frequently provide for the government to cover the cost of benefits which the company grants to redundant workers and which go beyond its statutory or contractual obligations. Where such schemes are available generally without sectoral limitations to any worker meeting predefined and automatic eligibility conditions, they are not deemed to involve aid under Article 61(1) for firms undertaking restructuring. On the other hand, if the schemes are used to support restructuring in particular industries, they may well involve aid because of the selective way in which they are used(25).4. The obligations a company itself has under employment legislation or collective agreements with trade unions to provide redundancy benefits and/or early retirement pensions are part of the normal costs of a business which a firm has to meet from its own resources. This being so, any contribution by the State to these costs must be counted as aid. This is true regardless of whether the payments are made direct to the firm or are administered through a government agency to the employees.5. The EFTA Surveillance Authority has a positive approach to such aid, for it brings economic benefits above and beyond the interests of the firm concerned, facilitating structural change and reducing hardship, and often only serves to even out differences in the obligations placed on companies by national legislation.6. Besides meeting the cost of redundancy payments and early retirement, aid is commonly provided in connection with a particular restructuring case for training, counselling and practical help with finding alternative employment, assistance with relocation, and professional training and assistance for employees wishing to start new businesses. The EFTA Surveillance Authority consistently takes a favourable view of such aid.7. The type of aid described in points 16.3.2.7(1) to (6) should be clearly identified in the restructuring plan, since aid for social measures exclusively for the benefit of redundant employees is disregarded for the purposes of determining the extent of the compensatory measures referred to in point 16.3.2.2(1)(c).8. In the common interest, the EFTA Surveillance Authority will ensure in the context of the restructuring plan that social effects of the restructuring in EFTA States other than the one granting aid are kept to the minimum.16.4. Aid schemes for SMEs16.4.1. General principles1. The EFTA Surveillance Authority will authorise aid schemes for rescuing and/or restructuring small or medium-sized enterprises in difficulty only where the firms concerned correspond to the definition of SMEs in Chapter 10 of these Guidelines. Subject to the following specific provisions, the compatibility of such schemes will be assessed in the light of the conditions set out in points 16.2 and 16.3. Any aid which is granted under a scheme and does not meet one of those conditions must be notified individually and approved in advance by the EFTA Surveillance Authority.16.4.2. Eligibility1. Unless otherwise stipulated in rules on State aid in a particular sector, awards of aid, under schemes authorised from now on, to small or medium-sized enterprises will be exempted from individual notification only where the enterprise concerned meets at least one of the three criteria set out in point 16.2.1(2). Aid to enterprises that do not meet any of those three criteria must be notified individually to the EFTA Surveillance Authority so that it can assess whether they qualify as firms in difficulty.16.4.3. Conditions for the authorisation of rescue aid schemes1. In order to be approved by the EFTA Surveillance Authority, rescue aid schemes must satisfy the conditions set out in (a), (b), (c) and (e) of point 16.3.1(1). Condition (d) set out in point 16.3.1(1) is replaced by the following, for the purposes of this point:'(d) Rescue aid may be granted for not more than six months, during which time an analysis must be made of the firm's position. Before the end of that period the EFTA State should either approve a restructuring plan or a liquidation plan, or demand reimbursement of the loan and the aid corresponding to the risk premium from the beneficiary.'Any rescue aid granted for longer than six months must be individually notified to the EFTA Surveillance Authority.16.4.4. Conditions for the authorisation of restructuring aid schemes1. The EFTA Surveillance Authority will authorise restructuring aid schemes only if the grant of aid is conditional on full implementation by the recipient of a restructuring plan that has been approved by the EFTA State concerned and meets the following conditions:(a) 'Restoration of viability': the criteria set out in point 16.3.2.2(1)(b) apply;(b) 'Avoidance of undue distortions of competition': since aid to SMEs tends to distort competition less, the principle set out in point 16.3.2.2(1)(c), namely that the recipient firm's presence on the relevant market(s) should be reduced, does not apply unless otherwise stipulated in rules on State aid in a particular sector. Schemes should nevertheless provide that recipient firms must not increase their capacity during the restructuring plan;(c) 'Aid limited to the minimum necessary': the principles set out in point 16.3.2.2(1)(d) apply;(d) 'One time, last time principle': the rule laid down in point 16.3.2.3. applies. However, EFTA States must notify measures individually to the EFTA Surveillance Authority where an exception is made to this principle:(i) in exceptional and unforeseeable circumstances for which the company is not responsible;(ii) where a firm takes over some or all of the assets of another firm which has itself already received rescue or restructuring aid;(e) 'Amendment of the restructuring plan': any changes to the plan must comply with the rules set out in point 16.3.2.4.16.4.5. Common conditions for the authorisation of rescue and/or restructuring aid schemes1. Schemes must specify the maximum amount of aid that can be awarded to any one firm as part of a rescue and/or restructuring operation, including where the plan is modified. Any aid exceeding that amount must be notified individually to the EFTA Surveillance Authority. The maximum amount of aid may not be more than EUR 10 million, including any aid from other sources or under other schemes.16.4.6. Monitoring and annual reports1. Point 16.3.2.2(1)(g) does not apply to aid schemes. However, a condition of approval will be that reports are presented on the scheme's operation, normally on an annual basis, containing the information specified in Chapter 32 and in Annexes III and IV to these Guidelines. The reports must also include a list of all beneficiary firms indicating, for each of them:(a) the company name;(b) its sectoral code, using the NACE(26) two-digit sectoral classification codes;(c) the number of employees;(d) annual turnover and balance sheet value;(e) the amount of aid granted;(f) where appropriate, any restructuring aid, or other support treated as such, which it has received in the past;(g) whether or not the beneficiary company has been wound up or subject to collective insolvency proceedings before the end of the restructuring period.16.5. Appropriate measures under Article 1(1) of Protocol 3 to the Surveillance and Court Agreement1. The EFTA Surveillance Authority is proposing, under Article 1(1) of Protocol 3 to the Surveillance and Court Agreement, that the EFTA States adopt the following appropriate measures as set out below, with regard to their existing aid schemes. The EFTA Surveillance Authority will make authorisation of any future scheme conditional on compliance with the provisions below.16.5.1. Individual notification of any aid for tangible investment during the restructuring period1. Where a large enterprise receives restructuring aid examined under these Guidelines, the grant of any other investment aid during the restructuring period, even in accordance with a scheme that has already been authorised, is liable to influence the EFTA Surveillance Authority's assessment of the extent of the compensatory measures required.2. During the period for restructuring such an enterprise, any aid intended to encourage tangible investment (whether it be to promote regional development, environmental protection or any other objective) awarded after 30 June 2000 must be notified individually, unless it is covered by the de minimis rule(27).16.5.2. Need to inform the EFTA Surveillance Authority of any aid granted to the recipient firm1. Where a large enterprise receives restructuring aid examined under these Guidelines, monitoring of the satisfactory implementation of the EFTA Surveillance Authority's decisions on such aid requires a large measure of transparency with regard to any further aid which the firm might receive, even in accordance with a scheme that has already been authorised and even where such aid is not subject to individual notification under point 16.5.1.2. With effect from 30 June 2000, notifications of aid for restructuring a large enterprise must indicate, for information, all other aid of any kind which is planned to be granted to the recipient firm during the restructuring period, unless it is covered by the de minimis rule.3. Likewise, the reports to be submitted in accordance with point 16.3.2.2(1)(g) of these Guidelines must indicate any other aid granted to the recipient firm during the period covered, and any other aid which is planned to be granted to the recipient firm during the restructuring period, unless it is covered by the de minimis rule.4. The EFTA Surveillance Authority reserves the right to initiate proceedings under Article 1(2) of Protocol 3 to the Surveillance and Court Agreement against all aid to a particular firm if the grant of aid under approved schemes is liable to circumvent the requirements of the present Guidelines.16.5.3. Adaptation of existing rescue or restructuring aid schemes in the light of the present Guidelines1. EFTA States must adapt their existing rescue and restructuring aid schemes which are to remain in operation after 30 June 2000 in order to bring them into line with the present Guidelines, and in particular with the requirements of point 16.4, after that date.2. To enable the EFTA Surveillance Authority to monitor the adaptation process, EFTA States must let it have a list of all such schemes before 28 February 2000. They must subsequently, and in any event before 30 June 2000, provide it with sufficient information to enable it to check that the schemes have indeed been modified in accordance with these Guidelines.16.6. Entry into force, duration and review of the Guidelines16.6.1. Amendment of the regional aid Guidelines1. Point 25.4(7) of Chapter 25 of these Guidelines on national regional aid is hereby amended by deleting the text from the word 'unless' up to the end of that point. That text excluded from the scope of 'initial investment' the purchase of an establishment from a firm in difficulty, and thus disqualified it for regional aid. That exclusion therefore no longer operates. However, where an establishment is purchased from a firm in difficulty, it must be demonstrated in particular that the condition laid down in point 25.4(9) of Chapter 25 of these Guidelines, namely that the transaction takes place at market conditions, has been fulfilled.16.6.2. Entry into force and duration1. Subject to the following provisions, the present Guidelines shall enter into force on the date of their publication in the Official Journal of the European Communities and in the EEA Supplement thereto. They shall remain in force, unless otherwise stipulated in any new decision, for five years.16.6.3. Aid to SMEs1. Aid for rescuing and restructuring SMEs individually notified before 30 April 2000 will be assessed in the light of the Guidelines in force before adoption of the present text. The extension of those Guidelines, which was notified to EFTA States and published in the EEA Section of and the EEA Supplement to the Official Journal of the European Communities on 22 April 1999 is therefore renewed for such aid.2. Any scheme is nevertheless subject to the appropriate measure referred to in point 16.5.3 where the scheme is intended to remain in operation after 30 June 2000.16.6.4. Aid to large enterprises1. Subject to the provisions set out below, the EFTA Surveillance Authority will assess the compatibility with the functioning of the EEA Agreement of any aid for rescuing or restructuring large enterprises, on the basis of the present Guidelines once they are published in the Official Journal of the European Communities and in the EEA Supplement thereto. However, notifications registered by the EFTA Surveillance Authority before that date will be examined in the light of the criteria in force at the time of notification.16.6.5. Non-notified aid1. The EFTA Surveillance Authority will examine the compatibility with the functioning of the EEA Agreement of any rescue or restructuring aid granted without its authorisation and therefore in breach of Article 1(3) of Protocol 3 to the Surveillance and Court Agreement:(a) on the basis of the present Guidelines if some or all of the aid is granted after their publication in the Official Journal of the European Communities and in the EEA Supplement thereto;(b) on the basis of the Guidelines in force at the time the aid is granted in all other cases.""ANNEX XIVNOTIFICATION FORM FOR INDIVIDUAL GRANTS OF RESTRUCTURING AIDI. Information on the company- Company name.- Legal status.- Sector in which it operates, with corresponding NACE code.- Names of the main shareholders and extent of their holdings.- List of all shareholders' agreements (creation of a hard core, purchase option, etc.).- If the company belongs to a group, copy of the full, up-to-date organisation chart of the whole of the group, showing the links between its members (capital and voting rights).- If the company originates from a purchase of assets following liquidation or court-supervised administration proceedings, also give the above details for the firm(s) concerned.- Location of all main production sites throughout the world, with workforce.- If the company is treated as an SME, the EFTA State must supply evidence that it fulfils all the criteria of the EEA definition. If that is the case, it must explain why the company does not qualify for a restructuring aid scheme for SMEs (either there is no such scheme or the company does not meet the eligibility criteria).- A copy of the last three profit and loss accounts (if possible) or at least of the most recent one.- A copy of any court decision appointing an administrator or opening an investigation into the company.II. Market surveysThe EFTA State must supply a copy of the survey of the market(s) served by the firm in difficulty, with the name of the organisation which carried it out. The market survey must give in particular:- a precise definition of the market covered by the survey,- the names of the company's main competitors with their shares of the world, EEA or domestic market, as appropriate,- the evolution of the company's market shares in recent years,- an assessment of total production capacity and demand at EEA level, concluding whether or not there is excess capacity on the market,- EEA-wide forecasts for trends in demand, aggregate capacity and prices on the market over the five years ahead.III. Description of the aid- Demonstrate that the company's difficulties are its own and are not the result of an arbitrary allocation of costs within a group.- State whether the company has already received rescue aid and, if so, give the approval date and attach the EFTA State's commitment to submit a restructuring or liquidation plan.- State whether the company or any of its subsidiaries in which it holds not less than 25 % of the capital or the voting rights have in the past already received restructuring aid or aid regarded as such. If so, give the references of the previous EFTA Surveillance Authority decisions.- Indicate the form to be taken by the aid and the total amount of the financial benefit involved.- Describe the compensatory measures proposed with a view to mitigating the distortive effects on competition at EEA level.- Specify all the aid of any kind which the firm is likely to receive before the end of its restructuring period, unless it is covered by the de minimis rule.IV. Restructuring planThe EFTA State must supply a restructuring plan drawn up in accordance with point 16.3.2.2 of Chapter 16 of the Guidelines and containing at least the following information:- presentation of the different market assumptions arising from the market survey,- analysis of the reasons why the firm has run into difficulty,- presentation of the proposed future strategy for the firm,- description of the different restructuring measures planned and their cost,- comparative assessment of the economic and social consequences, at regional and/or national level, of disappearance of the firm in difficulty and of implementation of the restructuring plan,- timetable for implementing the different measures and final deadline for implementing the restructuring plan in its entirety,- very precise description of the financial arrangements for the restructuring:- use of capital still available,- sale of assets or subsidiaries to help finance the restructuring,- financial commitment by the different private shareholders and the main lending banks,- amount of public assistance and demonstration of the need for that amount,- where appropriate, grant of repayable loans or insertion of a "better fortunes" clause to secure reimbursement of the aid,- projected profit and loss accounts for the next five years with estimated return on capital and sensitivity study based on several scenarios,- record of the discussions on the planned restructuring held with the trade unions representing the firm's employees,- name(s) of the author(s) of the restructuring plan and date on which it was drawn up.V. Undertaking by the EFTA StateThe EFTA State must undertake to give, in the reports on restructuring aid that has been allowed, all relevant information on aid of any kind granted to the firm receiving restructuring aid, whether under a scheme or not, until the restructuring period comes to an end.ANNEX XVNOTIFICATION FORM FOR RESCUE AIDEssential information on the companyCompany name: ......Legal status: ...Sector in which it operates: ...Workforce (consolidated where appropriate): ...Operating costs and financial charges over the last 12 months: ...Maximum amount to be loaned: ...Name of lender: ......Essential supporting documents to be supplied- Latest profit and loss account with balance sheet, or court decision opening an investigation into the company under national company law.- An undertaking by the EFTA State to submit to the EFTA Surveillance Authority, within not more than six months of the date of approval of the rescue aid, either a restructuring plan, or a liquidation plan, or proof that both the loan and the aid have been reimbursed in full.- A liquidity plan for the six months ahead, indicating the amounts to be borrowed in the short term.- A copy of the offer of a loan (linked to the rescue aid) to the firm in difficulty, specifying the conditions for the payment of the amounts loaned and the terms of reimbursement.- A copy of the draft guarantee covering the loan in question where it is to be guaranteed."(1) This Chapter corresponds to the Community Guidelines on State aid for rescuing and restructuring firms in difficulty (OJ C 288, 9.10.1999, p. 2).(2) First adopted 19.1.1994, published in OJ L 231 on 3.9.1994 and in EEA Supplement No 32 thereto on the same date, amended guidelines adopted 19.10.1994, published in OJ L 383 on 31.12.1994 and in EEA Supplement No 59 thereto on the same date.(3) Published in OJ C 111 on 22.4.1999 and in EEA Supplement No 17 thereto on the same date.(4) COM(1998) 417 final; COM(1999) 148 final.(5) This refers in particular to the types of company mentioned in the first subparagraph of Article 1(1) of Directive 78/660/EEC of 25 July 1978 (OJ L 222, 14.8.1978, p. 11) as amended in particular by Directive 90/605/EEC of 8 November 1990 (OJ L 317, 16.11.1990, p. 60), see point 4 of Annex XXII to the EEA Agreement.(6) By analogy with the provisions of Council Directive 77/91/EEC of 13 December 1976 (OJ L 26, 31.1.1977, p. 1), see point 2 of Annex XXII to the EEA Agreement.(7) This refers in particular to the types of company mentioned in Article 1 of Directive 90/605/EEC of 8 November 1990 (OJ L 317, 16.11.1990, p. 60), see point 4 of Annex XXII to the EEA Agreement.(8) The creation by a company of a subsidiary merely as a vehicle for receiving its assets and possibly its liabilities is not regarded as the creation of a new firm.(9) Specific rules of this nature exist for shipbuilding (Regulation (EC) No 1540/98 of 29 June 1998 (OJ L 202, 18.7.1998, p. 1) see point 1(b) of Annex XV to the EEA Agreement, the motor vehicle industry (Chapter 23 of these Guidelines) and the aviation sector (Chapter 30 of these Guidelines).(10) Including in the case of aid co-financed from joint activities established by the Contracting Parties.(11) Commission Directive 80/723/EEC of 25 June 1980 on the transparency of financial relations between Member States and public undertakings (OJ L 195, 29.7.1980, p. 35), as amended (OJ L 254, 12.10.1993, p. 16), see point 1 of Annex XV to the EEA Agreement.(12) See judgment of the European Court of Justice of 22 March 1977 in Case 78/76 Steinike and Weinlig v Germany, [1977] ECR 595: Crédit Lyonnais/Usinor-Sacilor, European Commission press release IP(91) 1045.(13) See Chapter 20 of these Guidelines on application of State aid provisions to public enterprise in the manufacturing sector.(14) See in particular point 20.5 of Chapter 20 of these Guidelines on application of State aid provisions to public enterprise in the manufacturing sector.(15) The items of information which the EFTA Surveillance Authority needs in order to examine the aid satisfactorily are listed in Annex XV to these Guidelines.(16) An exception may be made in the case of rescue aid in the banking sector, in order to enable the credit institution in question to continue temporarily carrying on its banking business in accordance with the prudential legislation in force (currently Council Directive 89/647/EEC of 17 December 1989 on a solvency ratio for credit institutions (OJ L 386, 30.12.1989, p. 14) see Chapter II point 18 of Annex IX to the EEA Agreement). Any aid granted in a form other than that described in subparagraph (b), for example a capital injection or a subordinated loan, will be taken into account when any compensatory measures under a restructuring plan are examined in accordance with point 16.3.2.2(1)(c) of these Guidelines.(17) Reimbursement of the loan linked to the rescue aid may possibly be covered by the restructuring aid subsequently approved by the EFTA Surveillance Authority.(18) The items of information which the EFTA Surveillance Authority needs in order to examine the aid satisfactorily are listed in Annex XIV to these Guidelines.(19) As defined in point 26.7(6) of Chapter 26 of these Guidelines on multisectoral framework on regional aid for large investment projects: 'The relevant product market(s) for determining market share comprises the products envisaged by the investment project and, where appropriate, its substitutes considered by the consumer (by reason of the products' characteristics, their prices and their intended use) or by the producer (through flexibility of the production installations). The relevant geographic market comprises usually the EEA or, alternatively, any significant part of it if the conditions of competition in that area can be sufficiently distinguished from other areas of the EEA. Where appropriate the relevant market(s) may be considered to be global'. A footnote states that, where the investment concerns the production of intermediate goods, the relevant market may be the market for the final product if most of the production is not sold on the open market.(20) See the third sentence of point 16.2.1(3).(21) With regard to unnotified aid, the EFTA Surveillance Authority will take account in its analysis of the possibility that the aid could have been declared compatible with the functioning of the EEA Agreement.(22) Unless otherwise specified, the restructuring period will normally come to an end when the deadline for implementation of the various measures provided for in the restructuring plan expires (see the sixth indent in point IV of Annex XIV to these Guidelines).(23) Given the degree of liberalisation and specific features of each sector, two situations should be noted:- in the air transport sector, entirely liberalised since 1997, the EFTA Surveillance Authority will apply the 'one time, last time' principle within the limits and conditions of the guidelines on State aid in the aviation sector, see Chapter 30 of these Guidelines,- in other sectors, if the effects of the liberalisation of EEA markets that were previously closed to competition have created new economic conditions, derogations may be considered.(24) As defined in Section 10.2 of Chapter 10 of these Guidelines on aid to small and medium-sized enterprises (SMEs).(25) In its judgment of 26 September 1996 in Case C-241/94 (France v Commission, re; Kimberly Clark Sopalin, [1996] ECR I-4551), the European Court of Justice confirmed that the system of financing on a discretionary basis by the French authorities, through the National Employment Fund, was liable to place certain undertakings in a more favourable situation than others and thus to qualify as aid within the meaning of Article 87(1) of the Treaty. (The Court's judgment did not call into question the Commission's conclusion that the aid was compatible with the common market).(26) Statistical classification of economic activities in the European Community, published by the Statistical Office of the European Communities.(27) See Chapter 12 of these Guidelines.


Avis juridique important

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41993D0235

93/235/ECSC: Decision of the representatives of the Governments of the Member States meeting within the Council of 26 April 1993 concerning trade between the European Coal and Steel Community and the Federal Republic of Yugoslavia (Serbia and Montenegro)

Official Journal L 102 , 28/04/1993 P. 0017 - 0019 Finnish special edition: Chapter 11 Volume 37 P. 0066  Swedish special edition: Chapter 11 Volume 37 P. 0066

DECISION OF THE  REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES MEETING WITHIN THE COUNCIL of 26 April 1993  concerning trade between the European Coal and Steel Community and the Federal Republic of  Yugoslavia (Serbia and Montenegro)(93/235/ECSC)THE REPRESENTATIVES OF THE  GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN COAL AND STEEL COMMUNITY, MEETING WITHIN THE  COUNCIL, Whereas the Community and its Member States have decided to recognize the independence of the  Republic of Bosnia-Herzegovina as of 7 April 1992; Whereas this Republic has become a Member of the United Nations as of 23 May 1992; Whereas the prolonged direct and indirect activities of the Federal Republic of Yugoslavia (Serbia  and Montenegro) in, and with regard to, the Republic of Bosnia-Herzegovina are the main cause for  the dramatic developments in the Republic of Bosnia-Herzegovina; Whereas a continuation of these activities will lead to further unacceptable loss of human life and  material damage and to a further breach of international peace and security in the region; Whereas the United Nations Security Council has expressed, repeatedly, its serious concern about  the rapid and violent deterioration of the situation in the Republic of Bosnia-Herzegovina; Whereas the President of the Republic of Bosnia-Herzegovina has asked the international community  to assist his country against the intervention of the Federal Republic of Yugoslavia (Serbia and  Montenegro) in the internal affairs of the Republic of Bosnia-Herzegovina; Whereas the Bosnian Serb party has hitherto not accepted, in full, the peace plan of the  International Conference on the Former Yugoslavia in spite of appeals by the Security Council; Whereas the Community and its Member States, meeting within the framework of political cooperation,  have decided that measures have to be taken to dissuade the Federal Republic of Yugoslavia (Serbia  and Montenegro) from further violating the integrity and security of the Republic of  Bosnia-Herzegovina and to induce the Bosnian Serb party to cooperate in the restoration of peace in  the said Republic; Whereas further violations of the existing embargo on the Federal Republic of Yugoslavia (Serbia  and Montenegro) in particular by the transit through this Republic and by activities carried out  between this Republic and the Serb-controlled areas of Bosnia-Herzegovina and the United Nations  Protected Areas in the Republic of Croatia have to be prevented; Whereas the United Nations Security Council, acting pursuant to Chapter VII of the Charter of the  United Nations, has adopted Resolution 820 (1993), in order to strengthen the embargo of the  Federal Republic of Yugoslavia (Serbia and Montenegro) decided upon in Resolutions 713 (1991), 752  (1992) and 787 (1992); Whereas, under these conditions, the Community has to strengthen the embargo of the Federal  Republic of Yugoslavia (Serbia and Montenegro) as established by Decisions 92/285/ECSC  (1) and  92/470/ECSC  (2); Whereas the Community and its Member States have agreed to have recourse to a Community instrument,  inter alia in order to ensure a uniform implementation throughout the Community of certain of these  measures; In agreement with the Commission, HAVE DECIDED AS FOLLOWS: Article 1 As from 26 April 1993, the following shall be prohibited: (a)  the introduction, into the territory of the Community, of all commodities and products covered  by the ECSC Treaty originating in, coming from or transiting through, the Federal Republic of  Yugoslavia (Serbia and Montenegro); (b)  the export to, or the transit through, the Federal Republic of Yugoslavia (Serbia and  Montenegro) of all commodities and products originating in, coming from, or transiting through the  Community; (c)  the entry into the territorial sea of the Federal Republic of Yugoslavia (Serbia and  Montenegro) by all commercial traffic; (d)  any activity the object or effect of which is, directly or indirectly, to promote the  transactions mentioned under (a), (b) or (c). Article 2 The prohibitions of Article 1 shall not apply to: (a)  the export or transit through the Community to the Federal Republic of Yugoslavia (Serbia and  Montenegro) of essential humanitarian supplies, which are approved on a case-by-case basis under  its 'no objection` procedure by the Committee established pursuant to Resolution 724 (1991) of the  United Nations Security Council; (b)  the introduction into the territory of the Community of commodities and products which  originate in, or come from, the Federal Republic of Yugoslavia (Serbia and Montenegro) and which  were exported from this Republic before 31 May 1992 or which were entered legally for transit  through this Republic before 26 April 1993; (c)  transits through the territory of the Federal Republic of Yugoslavia (Serbia and Montenegro)  which are authorized by the Committee referred to under (a) and provided that, in case of transit  on the Danube, each vessel involved is subjected to effective monitoring while passing along the  Danube between Vidin/Calafat and Mohacs; (d)  the entering by commercial maritime traffic of the territorial sea of the Federal Republic of  Yugoslavia (Serbia and Montenegro) which is authorized on a case-by-case basis by the  aforementioned Committee or which constitutes a case of force majeure; (e)  any activity the object or effect of which is, directly or indirectly, to promote the  activities mentioned under this Article; Article 3 As from 26 April 1993, the following shall be prohibited: (a)  the introduction into the territory of the Community of all commodities and products  originating in, coming from, or having transited through, the United Nations Protected Areas in the  Republic of Croatia and those areas of the Republic of Bosnia-Herzegovina under the control of  Bosnian Serb forces; (b)  the export to, or transit through, the aforementioned areas, of all commodities and products  originating in, coming from, or transiting through, the Community; unless properly authorized by the Government of the Republic of Bosnia-Herzegovina or the  Government of the Republic of Croatia respectively. Article 4 The prohibition imposed by Article 3 shall not apply to the export to, import from, or  transit through, the said areas, of essential humanitarian supplies, including medical supplies and  foodstuffs distributed by international humanitarian agencies. Article 5 The following activities shall be subject to prior authorization to be issued by the  competent authorities of the Member States: (a)  exports to the Federal Republic of Yugoslavia (Serbia and Montenegro) of commodities and  products for essential humanitarian supplies in accordance with Article 2 (a); (b)  transits in accordance with Articles 2 and 3; (c)  the exports to, and imports from, the United Nations Protected Areas in the Republic of  Croatia and those areas of the Republic of Bosnia-Herzegovina under the control of Bosnian Serb  forces in accordance with Article 3. Article 6 Article 1 shall apply notwithstanding any rights or obligations conferred or imposed by  any international agreement or any contract entered into or any licence granted before 31 May  1992. Article 7 The provisions of Articles 1, 3, 5 and 6 do not apply to the activities related to  Unprofor, the conference on Yugoslavia or the European Community Monitor Mission. Article 8 All vessels, freight vehicles, rolling stock and aircraft in which a majority of  controlling interest is held by a person or undertaking in, or operating from, the Federal Republic  of Yugoslavia (Serbia and Montenegro) shall be impounded by the competent authorities of the Member  States. Expenses of impounding vessels, freight vehicles, rolling stock and aircraft may be charged to  their owners. Article 9 All vessels, freight vehicles, rolling stock, aircraft and cargoes suspected of having  violated, or being in violation of, Decision 92/285/ECSC or this Decision shall be detained by the  competent authorities of the Member States pending investigations. Article 10 Each Member State shall determine the sanctions to be imposed where the provisions of  this Decision are infringed. Where it has been ascertained that vessels, freight vehicles, rolling stock, aircraft and cargoes  have been in violation of this Decision, they may be forfeited to the Member State, the competent  authorities of which have impounded or detained them. Article 11 This Decision shall apply within the territory of the Community, including its air  space and in any aircraft or vessel under the jurisdiction of a Member State, and to any person  elsewhere who is a national of a Member State and any body elsewhere which is incorporated or  constituted under the law of a Member State. Article 12 Decision 92/285/ECSC and Decision 92/470/ECSC are hereby repealed. Article 13 This Decision shall enter into force on the day of its publication in the Official  Journal of the European Communities. Done at Luxembourg, 26 April 1993. The President B. WESTH


title: 2013/606/EU: Decision of the European Parliament of 17 April 2013 on discharge in respect of the implementation of the budget of the European Police Office for the financial year 2011

text:
               16.11.2013

               EN

               Official Journal of the European Union

               L 308/313

      DECISION OF THE EUROPEAN PARLIAMENT

   of 17 April 2013
   on discharge in respect of the implementation of the budget of the European Police Office for the financial year 2011
   (2013/606/EU)
   THE EUROPEAN PARLIAMENT,

               —

               having regard to the final annual accounts of the European Police Office for the financial year 2011,

               —

               having regard to the Court of Auditors’ report on the annual accounts of the European Police Office for the financial year 2011, together with the Office’s replies (1),

               —

               having regard to the Council’s recommendation of 12 February 2013 (05753/2013 – C7-0041/2013),

               —

               having regard to Article 319 of the Treaty on the Functioning of the European Union,

               —

               having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

               —

               having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (3), and in particular Article 208 thereof,

               —

               having regard to Council Decision 2009/371/JHA of 6 April 2009 establishing the European Police Office (Europol) (4), and in particular Article 43 thereof,

               —

               having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Article 94 thereof,

               —

               having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

               —

               having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties, Justice and Home Affairs (A7-0083/2013),

               1.

               Grants the Director of the European Police Office discharge in respect of the implementation of the Office’s budget for the financial year 2011;

               2.

               Sets out its observations in the resolution below;

               3.

               Instructs its President to forward this Decision and the resolution that forms an integral part of it to the Director of the European Police Office, the Council, the Commission and the Court of Auditors, and to arrange for their publication in the Official Journal of the European Union (L series).

            The President

         Martin SCHULZ

            The Secretary-General

         Klaus WELLE

      (1)  OJ C 388, 15.12.2012, p. 187.

      (2)  OJ L 248, 16.9.2002, p. 1.

      (3)  OJ L 298, 26.10.2012, p. 1.

      (4)  OJ L 121, 15.5.2009, p. 37.

      (5)  OJ L 357, 31.12.2002, p. 72.

         RESOLUTION OF THE EUROPEAN PARLIAMENT

      of 17 April 2013
      with observations forming an integral part of its Decision on discharge in respect of the implementation of the budget of the European Police Office for the financial year 2011
      THE EUROPEAN PARLIAMENT,

                  —

                  having regard to the final annual accounts of the European Police Office for the financial year 2011,

                  —

                  having regard to the Court of Auditors’ report on the annual accounts of the European Police Office for the financial year 2011, together with the Office’s replies (1),

                  —

                  having regard to the Council’s recommendation of 12 February 2013 (05753/2013 – C7-0041/2013),

                  —

                  having regard to Article 319 of the Treaty on the Functioning of the European Union,

                  —

                  having regard to Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (2), and in particular Article 185 thereof,

                  —

                  having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (3), and in particular Article 208 thereof,

                  —

                  having regard to Council Decision 2009/371/JHA of 6 April 2009 establishing the European Police Office (Europol) (4), and in particular Article 43 thereof,

                  —

                  having regard to Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (5), and in particular Article 94 thereof,

                  —

                  having regard to Rule 77 of, and Annex VI to, its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties, Justice and Home Affairs (A7-0083/2013),

                  A.

                  whereas the European Police Office (‘the Office’), which is located in The Hague, was established by a Council Decision (Decision 2009/371/JHA),

                  B.

                  whereas the Court of Auditors stated that it has obtained reasonable assurances that the annual accounts for the financial year 2011 are reliable and that the underlying transactions are legal and regular,

                  C.

                  whereas 2011 was the second year that the Office operated financially as a Union Agency,

                  D.

                  whereas the Office’s overall budget for the year 2011 was EUR 84 771 084,01, compared to EUR 91 830 691,75 in 2010, which represents a decrease of 7,69 %,

                  E.

                  whereas on 10 May 2012, Parliament granted the Director of the Office discharge for implementation of the Office’s budget for the financial year 2010 (6), and in its resolution accompanying the discharge decision, inter alia:

                              —

                              called on the Office to adopt the Implementing Rules to the Staff Regulations (and related internal instruments) and prepare a learning and development framework,

                              —

                              called on the Office to include in its annual work programme information on the overview of planned procurement activities to serve as a ‘financing decision’, required by the implementing provisions of the Framework Financial Regulation,

                              —

                              called on the Office to finalise the translation of its organisational mission statement into concise descriptions of roles and objectives for the departments and units,

                  F.

                  whereas the Office signed a housing agreement with the host Member State in March 2011 and moved to its new headquarters in June 2011,

                  G.

                  whereas the contribution of the Union to the Office’s budget for 2011 was EUR 83 469 000,

                  H.

                  whereas the balance for the outturn account for the Office in 2011 was positive, totalling EUR 6 938 170,36 (after a deduction of exchange rate differences equal to EUR 10 632,56),

                  1.

                  Believes that common elements between the Office and the European Police College should be explored further; reiterates its call on the Commission to prepare a comprehensive impact assessment regarding a potential merger of those two Agencies setting out the cost and benefits, considering the complementarities between the Office and the European Police College and the potential synergies, and to evaluate whether the merger could lead to economies of scale and optimisation of the performance in cross-border cooperation in the fight against crime;

         Budgetary and financial management

                  2.

                  Notes that in 2011, the Office committed 99,1 %, 75 % and 95,1 % of the appropriations received under Title I (Staff Expenditure), Title II (Administrative Expenditure) and Title III (Operational Expenditure) respectively; observes that in terms of paid appropriations the Office’s execution rate stands at 96,8 % under Title I, 33,8 % under Title II and 47,1 % under Title III; takes note of the Office’s statement that the costs related to the new headquarters had a substantial impact on the execution rates for Titles II and III which would have reached respectively 53 % and 58 % without this factor; calls, nevertheless, on the Office to implement specific measures to improve its budgeting process and execution rate of payments in the case of administrative and operational expenditure;

                  3.

                  Takes note of the Office’s statement that it saved EUR 2,6 million on its allocated 2011 budget by reducing the number of management board meetings and the translation costs while modernising its internal capabilities in order to meet the increase in demand for the Office’s services;

                  4.

                  Acknowledges from the Court of Auditors’ report that in 2010, more than EUR 1,6 million had to be cancelled and in 2011, EUR 1,9 million (9 % of the appropriations carried over from 2010) were cancelled; notes, moreover, that in 2011, the level of carry-overs of commitment appropriations was also high, with EUR 4,2 million (41 %) for Title II (Administrative Expenditure) and EUR 10,6 million (46 %) for Title III (Operational Expenditure); requires the Office to inform the discharge authority of the actions taken to address those deficiencies, as the high carry-over and cancellation rates indicate difficulties in the planning and/or implementation of the Office’s activities;

                  5.

                  Takes note from the Court of Auditors’ report that the level of payments against commitments was low, with 34 % for Title II and 45 % for Title III; calls on the Office to inform the discharge authority of the measures it has taken to address that deficiency, as the low level of payments is at odds with the budgetary principle of annuality;

                  6.

                  Takes note of the report of the Court of Auditors on the annual accounts of the Office’s pension fund (7) for the financial year 2011 as well as the fund’s replies; calls on the Office to inform Parliament about any decision regarding the future of the pension fund;

         Assets

                  7.

                  Acknowledges from the Court of Auditors’ report that weaknesses were found as regards the physical verification and recording of assets before and after the move to the new headquarters; in addition, is concerned that insurance contracts do not reflect the value of the Office’s assets: before the move, net assets were over-insured by about EUR 17 million and at the moment of audit they were under-insured by about EUR 21 million;

         Validation system

                  8.

                  Establishes from the Court of Auditors’ report that the accounting system has not been fully validated by the Accounting Officer which did not, however, affect the correctness and legality of the accounts; welcomes the audit of the Internal Audit Service (IAS) of the Commission performed in 2011 on planning and budgeting process, which confirmed positive developments in this regard;

         Recruitment procedures

                  9.

                  Notes from the Court of Auditors’ report that the Office could improve the transparency of recruitment procedures; invites the Office to clarify possible deficiencies in regard to its recruitment procedure; considers that some of the provisions of the Staff Regulations may present a considerable administrative burden;

         Financial regulation

                  10.

                  Acknowledges from the Court of Auditors’ report that the Office’s Financial Regulation refers to detailed rules and procedures laid down in the Office’s Implementing Rules even though the rules have not yet been adopted; calls on the Office to inform the discharge authority of the state of play concerning the adoption of its Implementing Rules;

                  11.

                  Welcomes the IAS Audit Report on Planning and Budgeting in the Office that was established in 2011; notes the recommendation stating that the Office should clarify precedence of deadlines; welcomes that the Office has undertaken steps to address that recommendation;

         Internal audit

                  12.

                  Recalls that the IAS performed one audit in 2011 with the objective of assessing the adequacy and effectiveness of the internal system for the Office’s planning and budgeting processes; notes, furthermore, that procurement planning was not included in the scope of that audit;

                  13.

                  Welcomes the IAS’ conclusions that the internal control system in place provides reasonable assurances regarding the achievement of the business objectives set out for the planning and budgeting processes;

                  14.

                  Notes that the following areas were assessed to be of high risk nature by the IAS:

                              —

                              business continuity management;

                              —

                              management of application requirement, project management framework and stakeholder commitment;

                              —

                              personnel competencies;

                              —

                              dependence on individuals and knowledge transfer;

                        calls on the Office to implement all the recommendations of the IAS in order to improve those areas and to inform the discharge authority on the actions taken;

                  15.

                  Refers, in respect of the other observations accompanying its Decision on discharge, which are of a horizontal nature, to its resolution of 17 April 2013 (8) on the performance, financial management and control of the agencies.

         (1)  OJ C 388, 15.12.2012, p. 187.

         (2)  OJ L 248, 16.9.2002, p. 1.

         (3)  OJ L 298, 26.10.2012, p. 1.

         (4)  OJ L 121, 15.5.2009, p. 37.

         (5)  OJ L 357, 31.12.2002, p. 72.

         (6)  OJ L 286, 17.10.2012, p. 276.

         (7)  The Europol Pension Fund’s objective is to finance and pay pensions for staff already employed by Europol before it became an EU agency on 1 January 2010.

         (8)  Texts adopted, P7_TA(2013)0134. (See page 374 of this Official Journal).


title: 2010/808/EU: Decision of the European Parliament and of the Council of 15 December 2010 on the mobilisation of the European Globalisation Adjustment Fund, in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2010/009 ES/Comunidad Valenciana Textiles from Spain)

text:
               28.12.2010

               EN

               Official Journal of the European Union

               L 342/20

         DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
   of 15 December 2010
   on the mobilisation of the European Globalisation Adjustment Fund, in accordance with point 28 of the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (application EGF/2010/009 ES/Comunidad Valenciana Textiles from Spain)
   (2010/808/EU)
   THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union,
   Having regard to the Interinstitutional Agreement of 17 May 2006 between the European Parliament, the Council and the Commission on budgetary discipline and sound financial management (1), and in particular point 28 thereof,
   Having regard to Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 establishing the European Globalisation Adjustment Fund (2), and in particular Article 12(3) thereof,
   Having regard to the proposal from the European Commission,
   Whereas:

               (1)

               The European Globalisation Adjustment Fund (EGF) was established to provide additional support for workers made redundant as a result of major structural changes in world trade patterns due to globalisation and to assist them with their reintegration into the labour market.

               (2)

               The scope of the EGF was broadened for applications submitted from 1 May 2009 to include support for workers made redundant as a direct result of the global financial and economic crisis.

               (3)

               The Interinstitutional Agreement of 17 May 2006 allows the mobilisation of the EGF within the annual ceiling of EUR 500 million.

               (4)

               Spain submitted an application on 22 March 2010 to mobilise the EGF in respect of redundancies in 143 enterprises operating in NACE Revision 2 Division 13 (manufacture of textiles) in a single NUTS II region, Comunidad Valenciana (ES52) and supplemented it with additional information up to 17 June 2010. This application complies with the requirements for determining the financial contributions as laid down in Article 10 of Regulation (EC) No 1927/2006. The Commission therefore proposes to mobilise an amount of EUR 2 059 466.

               (5)

               The EGF should, therefore, be mobilised in order to provide a financial contribution for the application submitted by Spain,

         HAVE ADOPTED THIS DECISION:
   Article 1
   For the general budget of the European Union for the financial year 2010, the European Globalisation Adjustment Fund shall be mobilised to provide the sum of EUR 2 059 466 in commitment and payment appropriations.
   Article 2
   This Decision shall be published in the Official Journal of the European Union.

      Done at Strasbourg, 15 December 2010.

            For the European Parliament

            The President

         J. BUZEK

            For the Council

            The President

         O. CHASTEL

      (1)  OJ C 139, 14.6.2006, p. 1.

      (2)  OJ L 406, 30.12.2006, p. 1.