Sector Specific

 

The Treaty has additional provisions for certain sectors. The Commission has adopted frameworks and rules defining its approach to State aid in particular industries.

 

Agriculture, Fisheries and Aquaculture

The general State aid rules do not yet apply in Macedonia. For EU member states the rules applying to these sectors are laid down in Treaty Articles 32 and 36 and the Community Guidelines for State aid in the agricultural sector, adopted by the Commission in 2000 and in the Community Guidelines for the examination of State aid to fisheries and aquaculture.

 

http://ec.europa.eu/agriculture/stateaid/leg/index_en.htm

 

Broadband

The Community Guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks were introduced in September 2009.

 

The Guidelines set down the circumstances in which the Commission will consider public sector support for the development of both first generation broadband and next generation access (NGA).

 

State aid arises when public funds are granted to an investor to enable them implement a broadband network, which in most cases are chosen following a tender. The use of a tender ensures that aid is kept to a minimum but often includes the rights to operate a network, thereby enabling the successful bidder to conduct a commercial activity on terms which would not be otherwise available on the market. Indirect beneficiaries include third party operators that obtain wholesale access to the infrastructure and business users who get connectivity under terms that would not apply without state intervention.

Aid to support broadband may be considered compatible with the Treaty where the market does not provide sufficient coverage or the access conditions are not adequate – either at the level of first generation broadband or next generation access. In assessing compatibility the Commission makes a distinction between the types of areas that may be targeted depending on the existing level of connectivity.

 

Notifications are required to classify areas to be covered into “white, “grey” and “black” areas according to the current level of provision – where white indicates no coverage, grey indicates one existing network and black indicates that more than one network exists. Different levels of assessment apply to each category with conditions for support in white areas easier to satisfy than those in grey or black areas where the market already provides a service and the potential for distortion of competition greater.

 

The Guidelines set down a number of design features required in all notified measures in order to limit distortions of competition. These include a detailed mapping and coverage analysis, an open tender process, acceptance of most economically advantageous offer, technology neutrality, use of existing infrastructure where possible, wholesale access to third parties, a benchmark pricing exercise and a clawback mechanism to avoid over-compensation.

 

Next Generation Access (NGA) The Guidelines define NGA as mainly fibre based or advanced upgraded cable networks intended to replace copper based or current cable networks.

 

Additional considerations apply to the assessment process which takes into account both the current level of NGA provision and the existing first generation provision.

 

The Guidelines seek additional measures to limit distortions of competition including effective wholesale access for seven years and the provision of access to passive infrastructure (ducts or street cabinets).

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:025:0001:0026:EN:PDF

 

Cinema Film and TV Programme Production

The Commission’s Communication sets out the criteria (which have been extended until 2012) against which it assesses State aid to cinema and TV programme production:

 

·          the State aid must be directed to a product the content of which is cultural according to verifiable national criteria;

·          the producer must be free to spend at least 20% of the film budget in other Member States without suffering a reduction in the State aid provided. (“Territorialisation” of up to 80% of the production budget is therefore permitted);

·          the intensity of the State aid must not exceed 50% of the production budget. “Difficult and low budget films”, defined according to national parameters, are not subject to this limit.

·          State aid supplements for specific filmmaking activities (e.g. post-production) are not permitted.

 

No support may be provided from the EU Structural Funds for cinema and TV programme production.

 

As with other forms of State aid, the aid must also respect the “general legality” principle - that is, it must not be subject to conditions that are contrary to provisions of the Treaty other than those relating to State aid. In particular;

 

·          the State aid must not be reserved exclusively for nationals of the Member State concerned, require beneficiaries to have the status of a national undertaking established under national commercial law, or require workers of foreign companies providing filmmaking services to comply with national labour standards.

·          where the State aid is financed by a parafiscal charge and benefits national producers either solely or to a greater extent than competitors in other Member States, then that charge must not be levied on imported production, and national production must not enjoy a lower rate of charge when exported.

 

Undertakings in the film and TV programme production sector may benefit from regional State aid or other State aid frameworks that apply across industry generally, for example, SMEs, research and development, training or employment.

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2001:0534:FIN:EN:PDF

 

Sensitive Sectors

 

The Commission has adopted special rules for these sectors which have experienced particularly severe economic problems and are considered sensitive because of the level of distortion in competition that may arise if State aid is applied to the sector concerned:

                         

·                      the coal and steel industry (ECSC and non-ECSC)

·                      synthetic fibres sector

·                      shipbuilding.

 

For these sectors, the State aid rules are, in general, more restrictive than the rules applying to other industries. In most cases, the possibility of aid for investment leading to increased production capacity is severely limited or even prohibited. In some cases, aid is allowed only on condition that it is accompanied by capacity reductions. In almost all of these sectors, special notification requirements are imposed on Member States (obligation to notify the Commission of each case individually, even if there is an approved national State aid scheme).

 

State aid to the coal industry

Under Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the coal industry (applicable until 31 December 2010)33, the Commission may approve the following categories of State aid:

 

·          State aid for the reduction of activity - to cover current production losses of production units with a planned closure date no later than 31 December 2007.

·          State aid for access to coal reserves: production units may receive either aid for initial investment (for up to 30% of the initial investment costs of projects that contribute to maintaining access to coal reserves and ensure the viability of the units concerned, with a final payment no later than 31 December 2010), or current production aid (for current production losses of production units whose operations form part of a plan for access to coal reserves and where the aid contributes to maintaining access to coal reserves), but not both.

·          State aid for exceptional costs (for certain costs resulting from the rationalisation and restructuring of the coal industry that are not related to current production (“inherited liabilities”)).

 

Undertakings in the coal industry may benefit from State aid for research and technological development, the environment and training. No other State aid may be granted. NOTE: R&D and environment aid require you to obtain advance approval from the Commission. Training aid that complies with the training block exemption regulation is exempt from this requirement – unless for very large projects.

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002R1407:EN:NOT

 

State aid to shipbuilding, ship repairing and ship conversion

 

Since the early 1970s, state aid to shipbuilding has been subject to a series of specific Community regimes. This framework, which replaces Council Regulation (EC) No 1540/98, is designed to remove the differences between the rules applicable to the shipbuilding industry and those applicable to other industrial sectors. However, it takes account of specific factors affecting the shipbuilding sector, namely:

 

·          the nature of the world shipbuilding market (overcapacity, depressed prices, etc.);

·          the nature of ships as very large capital goods in respect of credit facilities;

·          the difficulty of applying the World Trade Organisation (WTO) rules on unfair trading practices to the shipbuilding sector;

·          the existence of agreements within the Organisation for Economic coordination and development (OECD) in the shipbuilding sector; this mainly concerns the 1994 Agreement on respecting normal competitive conditions in the shipbuilding and repair industry, which has not entered into force and which the OECD is in the process of replacing.

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52006XC1028(01):EN:NOT

 

 

State aid to the steel industry

Under the Commission’s 2002 Communication on a multilateral framework on regional aid for large investment projects no investment by the steel industry is eligible for regional investment State aid during the life of the framework (until 31 December 2009).

 

The Communication on rescue and restructuring aid for the steel sector indicates that the Commission regards the following closure aid as compatible with the common market:

 

·          State aid to cover not more than 50% of payments to workers made redundant or accepting early retirement

·          State aid to steel firms that permanently cease production of steel products of an amount not exceeding the residual book value of the plant to be closed

 

and that it regards rescue aid and restructuring aid to the steel industry as incompatible with the common market.

 

Undertakings in the steel industry may benefit from State aid for training, employment, environmental protection, and research and development as well as from “de minimis” aid.

 

Small and medium-sized enterprises in the steel industry may benefit from aid for SMEs at aid rates of up to 15% and 7.5% respectively under the Commission “block exemption” regulation for SMEs, but not from the higher rates otherwise available in Article 107(3)(a) areas and Article 107(3)(c) areas. The Commission will not approve large grants for investment not exempted by that regulation.

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52002XC0319(04):EN:NOT

 

State aid to the synthetic fibres sector

Under the Commission’s Regional Aid Rules, no investment in the synthetic fibres sector is eligible for regional investment State aid.

 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52001XC1222(02):EN:NOT

 

Transport

In the road transport sector, most general State aid rules apply, although there are exceptions (e.g. transport equipment is not eligible for aid; the de minimis regulation has restrictions in relation to transport; the job creation part of the employment block exemption does not apply to transport).

General State aid rules do not apply in the other transport sectors (rail, air, inland waterways and maritime transport). Article 73 of the Treaty includes provisions on State a id to transport.

 

http://ec.europa.eu/competition/sectors/transport/overview.html

 

Commission for Protection of Competition
Sv. Kiril i Metodij br.54 (6th floor), 1000 Skopje, Republic of Macedonia
Tel: + 381 (0) 2 3298 666; Fax: + 381 (0) 2 3296 466