31.3.2007   

EN

Official Journal of the European Union

L 91/1

(1)

Regulation (EC) No 3223/94 lays down, pursuant to the outcome of the Uruguay Round multilateral trade negotiations, the criteria whereby the Commission fixes the standard values for imports from third countries, in respect of the products and periods stipulated in the Annex thereto.

(2)

In compliance with the above criteria, the standard import values must be fixed at the levels set out in the Annex to this Regulation,

31.3.2007   

EN

Official Journal of the European Union

L 91/3

(1)

Article 10(2) of Regulation (EC) No 1784/2003 states that the import duty on products falling within CN codes 1001 10 00, 1001 90 91, ex 1001 90 99 (high quality common wheat), 1002, ex 1005 other than hybrid seed, and ex 1007 other than hybrids for sowing, is to be equal to the intervention price valid for such products on importation and increased by 55 %, minus the cif import price applicable to the consignment in question. However, that duty may not exceed the rate of duty in the Common Customs Tariff.

(2)

Article 10(3) of Regulation (EC) No 1784/2003 lays down that, for the purposes of calculating the import duty referred to in paragraph 2 of that Article, representative cif import prices are to be established on a regular basis for the products in question.

(3)

Under Article 2(2) of Regulation (EC) No 1249/96, the price to be used for the calculation of the import duty on products of CN codes 1001 10 00, 1001 90 91, ex 1001 90 99 (high quality common wheat), 1002 00, 1005 10 90, 1005 90 00 and 1007 00 90 is the daily cif representative import price determined as specified in Article 4 of that Regulation.

(4)

Import duties should be fixed for the period from 1 April 2007, and should apply until new import duties are fixed and enter into force,

31.3.2007   

EN

Official Journal of the European Union

L 91/6

(1)

In accordance with Commission Regulation (EC) No 1898/2005 of 9 November 2005 laying down detailed rules for implementing Council Regulation (EC) No 1255/1999 as regards measures for the disposal of cream, butter and concentrated butter on the Community market (2), the intervention agencies may sell by standing invitation to tender certain quantities of butter from intervention stocks that they hold and may grant aid for cream, butter and concentrated butter. Article 25 of that Regulation lays down that in the light of the tenders received in response to each individual invitation to tender a minimum selling price shall be fixed for butter and maximum aid shall be fixed for cream, butter and concentrated butter. It is further laid down that the price or aid may vary according to the intended use of the butter, its fat content and the incorporation procedure. The amount of the processing security as referred to in Article 28 of Regulation (EC) No 1898/2005 should be fixed accordingly.

(2)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Milk and Milk Products,

31.3.2007   

EN

Official Journal of the European Union

L 91/8

(1)

In accordance with Commission Regulation (EC) No 1898/2005 of 9 November 2005 laying down detailed rules for implementing Council Regulation (EC) No 1255/99 as regards measures for the disposal of cream, butter and concentrated butter on the Community market (2), the intervention agencies may sell by standing invitation to tender certain quantities of butter of intervention stocks that they hold and may grant aid for cream, butter and concentrated butter. Article 25 of that Regulation lays down that in the light of the tenders received in response to each individual invitation to tender a minimum selling price shall be fixed for butter and maximum aid shall be fixed for cream, butter and concentrated butter. It is further laid down that the price or aid may vary according to the intended use of the butter, its fat content and the incorporation procedure. The amount of the processing security as referred to in Article 28 of Regulation (EC) No 1898/2005 should be fixed accordingly.

(2)

The Management Committee for Milk and Milk Products has not delivered an opinion within the time limit set by its chairman,

31.3.2007   

EN

Official Journal of the European Union

L 91/10

(1)

In accordance with Article 47 of Commission Regulation (EC) No 1898/2005 of 9 November 2005 laying down detailed rules for implementing Council Regulation (EC) No 1255/1999 as regards measures for the disposal of cream, butter and concentrated butter on the Community market (2), the intervention agencies are opening a standing invitation to tender for the granting of aid for concentrated butter. Article 54 of that Regulation provides that in the light of the tenders received in response to each special invitation to tender, a maximum amount of aid is to be fixed for concentrated butter with a minimum fat content of 96 %.

(2)

An end-use security provided for in Article 53(4) of Regulation (EC) No 1898/2005 is to be lodged to ensure the taking over of the concentrated butter by the retail trade.

(3)

In the light of the tenders received, the maximum aid should be fixed at the appropriate level and the end-use security should be determined accordingly.

(4)

The Management Committee for Milk and Milk Products has not delivered an opinion within the time limit set by its chairman,

31.3.2007   

EN

Official Journal of the European Union

L 91/11

(1)

Pursuant to Article 21 of Commission Regulation (EC) No 2771/1999 of 16 December 1999 laying down detailed rules for the application of Council Regulation (EC) No 1255/1999 as regards intervention on the market in butter and cream (2), intervention agencies have put up for sale by standing invitation to tender certain quantities of butter held by them.

(2)

In the light of the tenders received in response to each individual invitation to tender a minimum selling price shall be fixed or a decision shall be taken to make no award, in accordance with Article 24a of Regulation (EC) No 2771/1999.

(3)

In the light of the tenders received, a minimum selling price should be fixed.

(4)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Milk and Milk Products,

31.3.2007   

EN

Official Journal of the European Union

L 91/12

(1)

The representative prices and additional duties applicable to imports of white sugar, raw sugar and certain syrups for the 2006/2007 marketing year are fixed by Commission Regulation (EC) No 1002/2006 (3). These prices and duties have been last amended by Commission Regulation (EC) No 331/2007 (4).

(2)

The data currently available to the Commission indicate that the said amounts should be changed in accordance with the rules and procedures laid down in Regulation (EC) No 951/2006,

31.3.2007   

EN

Official Journal of the European Union

L 91/14

(1)

Article 1(2) of Commission Regulation (EEC) No 2131/93 (2) defines ‘invitation to tender’ and the related award conditions. In order to avoid any ambiguity as regards the award of the contract, it is necessary to clarify those conditions.

(2)

Under the third subparagraph of Article 2(1) and the third subparagraph of Article 7(1) of Regulation (EEC) No 2131/93, a period of at least eight days must elapse between the date of publication in the Official Journal of the European Union of decisions opening invitations to tender for sale on the Community market or for export and the first closing date for the submission of tenders. The first paragraph of Article 12 of that Regulation provides for the same period between the publication of the notice of invitation to tender and the first closing date for submission of tenders. These time limits now appear too long, in view of the progress made in communications and information provision by electronic means, and should therefore be reduced.

(3)

Article 3 of Regulation (EEC) No 2131/93 specifies minimum rules for publicising notices of invitations to tender and lays down certain general rules applicable to standing invitations to tender, irrespective of the destination of the products. For the sake of clarity, those rules should appear in Title III of that Regulation setting out general and final provisions.

(4)

Article 10 of Regulation (EEC) No 2131/93 specifies the information to be sent to the Commission following the submission of tenders, and the terms for accepting the tenders, in particular as regards price. For the sake of effective management, the lot to which the tender relates should be identified, and the circumstances in which the fixing of the minimum selling price should not prejudice other export operations should be specified.

(5)

Article 12 of Regulation (EEC) No 2131/93 lays down general provisions on the notice of invitation to tender. For the sake of clarity, the provisions deleted from Article 3 should appear in this Article.

(6)

Regulation (EEC) No 2131/93 should therefore be amended accordingly.

(7)

Regulation (EEC) No 2131/93 contains entries in all Community languages. Under Council Regulation No 1 of 6 October 1958 determining the languages to be used by the European Economic Community (3), as amended by Regulation (EC) No 920/2005 (4), Irish has been one of the official languages of the Community since 1 January 2007. The above entries should therefore include the Irish language version.

(8)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Cereals,

1.

Article 1(2) is replaced by the following:

‘2.   For the purposes of this Regulation, “invitation to tender” means competition between interested parties in response to a call for tenders, the contract being awarded for each of the lots to the tenderer submitting the most favourable bid from among the bids that comply with this Regulation, for which the price tendered is at least equal to the minimum selling price laid down by the Commission in accordance with Article 10(2).’;

2.

The third subparagraph of Article 2(1) is replaced by the following:

‘There must be a gap of at least six days between publication and the first closing date for submission of tenders.’;

3.

Article 3 is replaced by the following:

‘Article 3

The intervention agencies shall draw up and publish notices of invitations to tender in accordance with Article 12.’;

4.

The third subparagraph of Article 7(1) is replaced by the following:

‘There must be a gap of at least six days between publication and the first closing date for submission of tenders.’;

5.

Article 10 is replaced by the following:

‘Article 10

1.   When each period for the submission of tenders has expired, the Member State concerned shall forward to the Commission a list of the tenders, without names, in each case showing in particular the lot number, the quantity tendered, the price tendered and the price increases and reductions applying thereto.

2.   The Commission, in accordance with the procedure laid down in Article 25(2) of Regulation (EC) No 1784/2003, shall fix the minimum selling price or decide not to award any quantities.

3.   In the case of invitations to tender for export, the minimum selling price shall be fixed at a level which does not prejudice other export operations.’;

6.

Article 12 is replaced by the following:

‘Article 12

1.   At least four days before the first closing date for the submission of tenders, the intervention agencies shall publish a notice of invitation to tender setting out:

2.   Intervention agencies shall ensure that notices of invitation to tender are properly publicised, in particular by displaying them at their head offices and on their website or the website of the competent ministry. In the case of standing invitations to tender, they shall specify therein the closing dates for the submission of tenders for each partial invitation to tender.

3.   Notices of invitation to tender shall specify the minimum quantities which tenders must cover.

4.   Notices of invitation to tender, and any changes to them, shall be forwarded to the Commission before the expiry of the first deadline for the submission of tenders.’

7.

In the Annex, after the entry in French, the following indent is inserted:

‘—   in Irish: Onnmhairiú gránach ar muir, Airteagal 17a de Rialachán (CEE) 2131/93’.

31.3.2007   

EN

Official Journal of the European Union

L 91/16

(1)

Commission Regulation (EC) No 134/2007 (3) fixes the indicative quantities for which system B export licences may be issued.

(2)

In the light of the information available to the Commission today, there is a risk that the indicative quantities laid down for the current export period for apples will shortly be exceeded. This overrun will prejudice the proper working of the export refund scheme in the fruit and vegetables sector.

(3)

To avoid this situation, applications for system B licences for apples after 30 March 2007 should be rejected until the end of the current export period,

31.3.2007   

EN

Official Journal of the European Union

L 91/17

(1)

Commission Directive 2002/72/EC (2) is a specific Directive within the meaning of the framework Regulation (EC) No 1935/2004, harmonising the rules for the plastics materials and articles intended to come into contact with food.

(2)

Directive 2002/72/EC establishes a list of authorised substances for the manufacture of those materials and articles, in particular additives and monomers, the restrictions on their use, rules on labelling as well as the information to be given to consumers or to food business operators concerning correct use of those materials and articles.

(3)

Information provided to the Commission demonstrates that the plasticizers used e.g. in polyvinyl chloride (PVC) gaskets in lids may migrate into fatty foods in quantities that could endanger human health or bring about an unacceptable change in the composition of the foods. It should therefore be made clear that, even if they are part of e.g. metal lids, gaskets fall under the scope of Directive 2002/72/EC. At the same time, specific rules should be laid down as regard the use of additives for the manufacture of those gaskets. It is appropriate to take account of the need of lid manufacturers to have sufficient time to adapt to some of the provisions of Directive 2002/72/EC. In particular, taking into account the time needed to prepare an application for the evaluation of specific additives used for the manufacture of gaskets of lids, it is not yet possible to establish a timetable for their evaluation. Therefore, in a first stage, the positive list of authorised additives that will be adopted in the future for plastic materials and articles should not apply for the manufacture of gaskets in lids, so that the use of other additives will remain possible, subject to national law. This situation should be reassessed at a later stage.

(4)

On the basis of new information related to the risk assessment of substances evaluated by the Authority and the need to adapt to technical progress the existing rules for calculating migration, Directive 2002/72/EC should be updated. For reasons of clarity definitions of technical terms used should be introduced.

(5)

The rules for overall migration and specific migration should be based on the same principle and should therefore, be aligned.

(6)

Specific rules should be introduced to improve the protection of infants, since infants ingest more food in proportion to their body weight than adults.

(7)

The verification of compliance with the specific migration limits (SML) in simulant D for additives listed in Annex III, Section B, to Directive 2002/72/EC should be applied at the same time as the other provisions for calculating migration introduced in this Directive for better estimation of the real exposure of the consumer to those additives. Therefore, the deadline for application of the abovementioned verification of compliance should be extended.

(8)

The status of additives acting as polymerisation production aids (PPA) should be clarified. The PPA which also function as additives are to be evaluated and included in the future positive list of additives. Some of them are already included in the current incomplete list of additives. As regards additives which exclusively act as PPA and are therefore not intended to remain in the finished article, it should be made clear that their use will remain possible, subject to national law, even after the adoption of the future positive list of additives. That situation should be reassessed at a later stage.

(9)

Studies have shown that azodicarbonamide decomposes into semicarbazide during high temperature processing. In 2003 the Authority was asked to gather data and to assess the possible risks posed by semicarbazide in food. Until that information was obtained and in accordance to Article 7 of Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety (3), the use of azodicarbonamide in plastic materials and articles was suspended by Commission Directive 2004/1/EC (4). In its opinion of 21 June 2005, the Authority (5) concluded that carcinogenicity of semicarbazide is not of concern for human health at the concentrations encountered in food, if the source of semicarbazide related to azodicarbonamide is eliminated. Therefore it is appropriate to maintain the prohibition of use of azodicarbonamide in plastic materials and article.

(10)

The concept of the plastic functional barrier, that is a barrier within plastic materials or articles preventing or reducing the migration from behind this barrier into the food should be introduced. Only glass and some metals may ensure complete blockage of migration. Plastics may be partial functional barriers with properties and effectiveness to be assessed and may help reducing the migration of a substance below a SML or a limit of detection. Behind a plastic functional barrier, non-authorised substances may be used, provided they fulfil certain criteria and their migration remains below a given detection limit. Taking into account foods for infants and other particularly susceptible persons as well as the difficulties of this type of analysis affected by a large analytical tolerance, a maximum level of 0,01 mg/kg in food or a food simulant should be established for the migration of a non-authorised substance through a plastic functional barrier.

(11)

Article 9 of Directive 2002/72/EC provides that materials and articles must be accompanied by a written declaration of compliance attesting that they comply with the rules applicable to them. In accordance with Article 5(1)(h) and (i) of Regulation (EC) No 1935/2004, to strengthen the co-ordination and responsibility of the suppliers at each stage of manufacture, including that of the starting substances, the responsible persons should document the compliance with the relevant rules in a declaration of compliance which is made available to his customer. Further, at each stage of manufacture, supporting documentation, substantiating the declaration of compliance, should be kept available for the enforcement authorities.

(12)

Article 17(1) of Regulation (EC) No 178/2002 requires the food business operator to verify that foods are compliant with the rules applicable to them. To this end subject to the requirement of confidentiality, food business operators should be given access to the relevant information to enable them to ensure that the migration from the materials and articles to food complies with the specifications and restrictions laid down in food legislation.

(13)

Compliance with Article 3 of Regulation (EC) No 1935/2004 for substances non-listed in Annexes II and III of Directive 2002/72/EC such as impurities or reaction products referred to in point 3 of Annex II and point 3 of Annex III to Directive 2002/72/EC should be assessed by the relevant business operator in accordance with internationally recognised scientific principles.

(14)

For a more adequate estimation of exposure of the consumer, a new reduction factor should be introduced in migration testing, called Fat Reduction Factor (FRF). Until now, the exposure to substances migrating predominantly into fatty food (lipophilic substances) was based on the general assumption that a person ingests daily 1 kg of food. However, a person ingests at most 200 g of fat on a daily basis. This should be taken into consideration through the correction of the specific migration by the FRF applicable to lipophilic substances in accordance with the opinion of the Scientific Committee on Food (SCF) (6) and the opinion of the Authority (7).

(15)

On the basis of new information related to the risk assessment of monomers and other starting substances evaluated by the Authority (8), certain monomers provisionally admitted at national level as well as new monomers should be included in the Community list of authorised substances. For others, the restrictions and/or specifications already established at Community level should be amended on the basis of the new information available.

(16)

The incomplete list of additives which may be used in the manufacture of plastic materials and articles should be amended so as to include other additives evaluated by the Authority. For certain additives, the restrictions and/or specifications already established at Community level should be amended on the basis of those new evaluations available.

(17)

Commission Directive 2005/79/EC (9) introduced the changes in the restrictions and/or specifications for substance Ref. No 35760 in section A instead of section B of Annex III to Directive 2002/72/EC and for substance Ref. No 67180 the changes were introduced in section B instead of section A of that Annex. In addition, for substances Ref. No 43480, 45200, 81760 and 88640 the indication to the restrictions and/or specifications in Annex III to Directive 2002/72/EC is ambiguous. Therefore, for legal certainty, there is a need to place substances Ref. No 35760 and 67180 in the appropriate section of the list of additives and re-introduce the restrictions and specifications for substances Ref. No 43480, 45200, 81760 and 88640.

(18)

It has been shown that distilled water, which is used at present is not an adequate simulant for some milk products. It should be replaced by 50 % ethanol, which better simulates their fatty character.

(19)

Epoxidised soybean oil (ESBO) is used as plasticizer in gaskets. Taking into account the opinion of the Authority adopted on 16 March 2006 (10) concerning exposure of adults to ESBO used in food contact materials, it is appropriate to set a shorter deadline for the compliance of gaskets of lids with the restrictions of ESBO and its substitutes set out in Directive 2002/72/EC. The same deadline should apply as regards the prohibition of use of azodicarbonamide.

(20)

Certain phthalates are used as plasticizers in gaskets and in other plastic applications. In its opinions on certain phthalates (11) published in September 2005 the Authority set tolerable daily intakes (TDI) for certain phthalates and estimated that the exposure of humans to certain phthalates is in the same range as the TDI. Therefore, it is appropriate to set a shorter deadline for the compliance of plastic materials and articles with the restrictions set in Directive 2002/72/EC for those substances.

(21)

Council Directive 85/572/EEC (12) and Directive 2002/72/EC should therefore be amended accordingly.

(22)

The measures provided for in this Directive are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

1.

Article 1 is amended as follows:

2.

The following Article 1a is inserted:

‘Article 1a

For the purpose of this Directive the following definitions shall apply:

3.

Article 2 is replaced by the following:

‘Article 2

1.   Plastic materials and articles shall not transfer their constituents to foodstuffs in quantities exceeding 60 milligrams of the constituents released per kilogram of foodstuff or food simulant (mg/kg) (overall migration limit).

However, this limit shall be 10 milligrams per square decimetre of surface area of material or article (mg/dm2) in the case of the following:

2.   For plastic materials and articles intended to be brought into contact with or already in contact with food intended for infants and young children, as defined by Commission Directives 91/321/EEC (14) and 96/5/EC (15), the overall migration limit shall always be 60 mg/kg.

4.

In Article 4(2), the date of ‘1 July 2006’ is replaced by ‘1 April 2008’.

5.

The following Articles 4c, 4d and 4e are inserted:

‘Article 4c

For the use of additives for the manufacture of plastic layers or plastic coatings in lids referred to in Article 1(2)(c), the following rules shall apply:

Article 4d

For the use of additives exclusively acting as polymerisation production aids which are not intended to remain in the finished article (hereinafter PPAs), for the manufacture of plastic materials and articles, the following rules shall apply:

Article 4e

The use of azodicarbonamide, Ref. No 36640 (CAS No 000123-77-3) in the manufacture of plastic materials and articles is prohibited.’

6.

In Article 5a paragraph 2 is replaced by the following:

‘2.   At the marketing stages other than the retail stages, plastic materials and articles which are intended to be placed in contact with foodstuffs and which contain additives referred to in paragraph 1 shall be accompanied by a written declaration containing the information referred to in Article 9.’

7.

In Article 7 the following paragraph is added:

‘For plastic materials and articles intended to be brought into contact with or already in contact with food for infants and young children, as defined by Directives 91/321/EEC and 96/5/EC, the SMLs shall always be applied as mg/kg.’

8.

The following Article 7a is inserted:

‘Article 7a

1.   In a plastic multi-layer material or article, the composition of each plastic layer shall comply with this Directive.

2.   By way of derogation from paragraph 1, a layer which is not in direct contact with food and is separated from the food by a plastic functional barrier, may, provided that the finished material or article complies with the specific and overall migration limits specified in this Directive:

3.   The migration of the substances referred to in paragraph 2(b) into food or simulant shall not exceed 0,01 mg/kg, measured with statistical certainty by a method of analysis in accordance with Article 11 of Regulation (EC) No 882/2004 of the European Parliament and of the Council (16). This limit shall always be expressed as concentration in foods or simulants. It shall apply to a group of compounds, if they are structurally and toxicologically related, in particular isomers or compounds with the same relevant functional group, and shall include possible set-off transfer.

4.   The substances referred to in paragraph 2(b) shall not belong to either of the following categories:

9.

In Article 8 the following paragraph 5 is added:

‘5.   Notwithstanding paragraph 1, for phthalates (Ref. No 74640, 74880, 74560, 75100, 75105) referred to in Annex III Section B, the verification of the SML shall only be performed in food simulants. However, verification of the SML may be performed in food where the food has not already been in contact with the material or article and is pre-tested for the phthalate and the level is not statistically significant or greater than or equal to the limit of quantification.’

10.

Article 9 is replaced by the following:

‘Article 9

1.   At the marketing stages other than the retail stage, plastic materials and articles as well as the substances intended for the manufacturing of those materials and articles, shall be accompanied by a written declaration in accordance with Article 16 of Regulation (EC) No 1935/2004.

2.   The declaration referred to in paragraph 1 shall be issued by the business operator and shall contain the information laid down in Annex VIa.

3.   Appropriate documentation to demonstrate that the materials and articles as well as the substances intended for the manufacturing of those materials and articles comply with the requirements of this Directive shall be made available by the business operator to the national competent authorities on request. That documentation shall contain the conditions and results of testing, calculations, other analysis, and evidence on the safety or reasoning demonstrating compliance.’

11.

Annexes I, II and III are amended in accordance with Annexes I, II and III to this Directive.

12.

The text in Annex IV to this Directive is inserted as Annex IVa.

13.

Annexes V and VI are amended in accordance with Annexes V and VI to this Directive.

14.

The text in Annex VII to this Directive is inserted as Annex VIa.

(a)

permit the trade in and use of plastic materials and articles intended to come into contact with food and complying with Directive 2002/72/EC, as amended by this Directive, from 1 April 2008;

(b)

prohibit the manufacture and importation into the Community of lids containing a gasket which do not comply with restrictions and specifications for Ref. No 30340; 30401; 36640; 56800; 76815; 76866; 88640 and 93760 laid down in Directive 2002/72/EC as amended by this Directive from 1 June 2008;

(c)

prohibit the manufacture and importation into the Community of plastic materials and articles intended to come into contact with food which do not comply with restrictions and specifications for phthalates Ref. No 74560; 74640; 74880; 75100; 75105 laid down in Directive 2002/72/EC as amended by this Directive from 1 June 2008;

(d)

without prejudice to point (b) and (c), prohibit the manufacture and importation into the Community of plastic materials and articles intended to come into contact with food which do not comply with Directive 2002/72/EC as amended by this Directive from 1 April 2009.

31.3.2007   

EN

Official Journal of the European Union

L 91/37

(1)

By letter of 11 April 2005, registered as received on 19 April 2005, Slovakia notified the Commission that it intended to grant restructuring aid to the company Konas, s.r.o. It provided additional information by letters of 30 June 2005, registered as received on 12 July 2005, and of 5 September 2005, registered as received on 8 September 2005, replying to the Commission’s letters of 31 May 2005 and 28 July 2005 respectively.

(2)

In the course of this Exchange of Letters it became apparent that the aid in question had been implemented in contravention of Article 88(3) of the EC Treaty. The aid was therefore classified as unlawful aid and given a new case number (NN 66/2005).

(3)

By letter of 9 November 2005, the Commission informed Slovakia that it had decided to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the aid.

(4)

The Commission decision to initiate the procedure laid down in Article 88(2) of the EC Treaty was published in the Official Journal of the European Union  (2). The Commission invited interested parties to submit their comments on the measure.

(5)

The Slovak authorities submitted their observations by letter of 13 December 2005, registered as received on 20 December 2005. Slovakia submitted additional information by letter of 3 January 2006, registered as received on 10 January 2006. The Commission received comments from one interested party (the recipient) by letter of 30 November 2005, registered as received on 6 December 2005. It forwarded them to Slovakia, which was given the opportunity to react and did so by sending its own comments by letter dated 9 March 2006, registered as received on 15 March 2006.

(6)

The recipient of the financial support is Konas, s.r.o. (hereinafter Konas), a manufacturer of machinery and equipment operating principally in four sectors: shaping and press tools, single-purpose machines, protection shields and other mechanical engineering products. The company is situated in a region eligible for regional aid under Article 87(3)(a) of the EC Treaty.

(7)

According to the information provided by the Slovak authorities, a number of domestic competitors and competitors elsewhere in the European Union operate in all these sectors. The company sees possibilities for exports in the shaping tools segment.

(8)

Konas employs 37 people. Its turnover was SKK 19 million (EUR 500 000 (3)) in 2004 and SKK 15 million (EUR 395 000) in the first three quarters of 2005. According to the Slovak authorities, the recipient fulfils the criteria of a small enterprise.

(9)

The measure in question comprises a write-off of a tax debt by the Lučenec Tax Office (tax office) under what is known as an arrangement with creditors. This procedure is governed by Act No 328/91 on Bankruptcy and Arrangements with Creditors (Bankruptcy Act).

(10)

Arrangement with creditors (arrangement or arrangement procedure) is a court-supervised procedure which, like the bankruptcy procedure, aims at settling the financial situation of indebted companies (4). Under the bankruptcy procedure, the company ceases to exist and either its assets are sold to a new owner or the company is liquidated. In contrast, under the arrangement procedure, the indebted company continues its business without change of ownership.

(11)

The arrangement procedure is initiated by the indebted company. The aim is to reach an agreement with the creditors (agreement) whereby the indebted company pays off part of its debt and the remainder is written off. The agreement has to be approved by the supervising court.

(12)

Creditors whose receivables are secured, e.g. by means of a mortgage, act as separate creditors. For the arrangement proposal to be accepted, all the separate creditors have to vote in favour, whereas for other creditors a qualified majority suffices. Separate creditors vote individually and have a right to veto the proposal.

(13)

Separate creditors have a privileged position also in the bankruptcy procedure. The proceeds from the sale of the secured assets in the bankruptcy procedure are meant to be used exclusively to satisfy the claims of the separate creditors. If the claims of the separate creditors cannot all be met from this sale, the outstanding amounts are incorporated into the second group with the claims of the other creditors. In the second group, the creditors are satisfied proportionally.

(14)

Pursuant to the Bankruptcy Act, the company applying for an arrangement with creditors has to submit to the supervising court a list of measures for its reorganisation and for the ongoing financing of its activity after the arrangement.

(15)

Act No 511/92 on the Administration of Taxes and Fees and Changes to the System of Local Financial Authorities (Tax Administration Act) governs the tax execution procedure, the aim of which is to satisfy the State’s tax claims through direct sale of real estate, movable assets or the firm as a whole.

(16)

Konas requested the supervising court to commence an arrangement procedure on 15 July 2003, which the court did by a decision of 25 March 2004. The creditors met on 8 June 2004 and agreed to the restructuring of their claims as proposed by Konas. The court confirmed the creditors’ agreement by a decision of 25 June 2004, which entered into force on 2 August 2004. The court formally ended the arrangement procedure by a decision of 20 October 2004. It should, however, be noted that the tax office has suspended the write-off pending the procedure before the Commission.

(17)

The creditors agreed with Konas on the following arrangement: 13,3 % of the debt would be repaid by Konas within 90 days of the entry into force of the creditors’ agreement and the remaining 86,7 % of the debt would be forgone by the creditors. The claims of all the creditors were treated on equal terms. The claims of the tax office included in the arrangement procedure amounted to SKK 11 223 459 (EUR 295 000) and comprised VAT accrued over the period between the third quarter of 1995 and the end of 1997 and in respect of several months in 1998 and 1999. The tax office, as the sole public creditor, agreed to write off SKK 9 730 739 (EUR 256 000). The actual amounts per creditor are shown in the following table:

Table 1

Konas debt arrangement (in SKK)

(18)

The Slovak authorities confirmed that, under the arrangement in respect of both its public and its private creditors, Konas had fulfilled its obligations within the time limit laid down in the creditors’ agreement.

(19)

In the arrangement procedure the tax office acted as a separate creditor and, as such, voted separately in favour of the arrangement. The privileged position of the tax office was due to the fact that its receivables included in the arrangement procedure, which amounted to SKK 10 147 939 (EUR 267 051), were secured by means of a mortgage on the assets of Konas. All the other creditors voted in favour of the proposed arrangement. Their receivables were common trade receivables not secured in any manner.

(20)

With its request for the arrangement procedure addressed to the supervising court, Konas also submitted a two-part plan comprising: (a) a financial analysis of the company and organisational measures, and (b) measures to restore the company’s financial stability.

(21)

In the plan, the company first described its financial situation, claiming that, although it was still indebted, its financial situation had been stabilised in the years preceding the request for an arrangement. It then concluded that its short-term receivables and cash would be sufficient to cover the debt remaining to be paid under the arrangement. The company described its organisational measures as follows: creation of reserves for an amount equal to the debt still to be paid under the arrangement; management of cash flow during the arrangement procedure so as to avoid inefficient expenditure, especially for energy and materials; regular payment of taxes and other public obligations; intensification of marketing activities; increase of sales to the most profitable customers; workforce review; limitation of expenditure for social purposes during the arrangement procedure; better use of existing plant; and energy consumption and cost reductions.

(22)

The costs of financial restructuring amounted to SKK 12 050 896 (EUR 317 000), the debt that Konas restructured through the arrangement. In its plan Konas proposed to finance the remaining debt of SKK 1 602 769 (EUR 42 000) through short-term receivables (SKK 1 323 259 or EUR 35 000) and available cash (SKK 2 246 419 or EUR 59 000).

(23)

According to the Slovak authorities, between 1998 and 2000 the tax office issued eight execution orders in exercise of its powers under the Tax Administration Act. In April 2004 the tax office issued a list of Konas’s debts outstanding at the time of the arrangement procedure.

(24)

The Slovak authorities confirmed that, pending the procedure before the European Commission, they had suspended the debt write-off agreed under the arrangement procedure.

(25)

In its decision to initiate the procedure of Article 88(2) of the EC Treaty, the Commission raised doubts as to whether the disputed write-off had no State aid element. Specifically, it considered that the behaviour of the tax office in the arrangement procedure did not meet the market economy creditor test. In particular, it found that the tax office was in a situation legally different from the other creditors as it possessed secured claims and had the possibility to initiate the tax execution procedure. It doubted that the arrangement procedure led to the best possible outcome for the State as a creditor of Konas when compared with the bankruptcy procedure or the tax execution procedure.

(26)

The Commission then raised doubts as to the compatibility with the common market of the disputed aid as restructuring aid. It doubted that the two main conditions were fulfilled: existence of a restructuring plan ensuring a return to long-term viability within a reasonable timeframe and limitation of the aid to the minimum necessary.

(27)

On the facts of the case, the recipient submitted that the book value of the assets pledged in favour of the tax office was SKK 3 254 000 on 31 December 2003 and SKK 3 001 000 on 31 December 2004. The assets in question were the only real estate owned by the recipient; all production was carried out in this building.

(28)

In its comments the recipient submitted that, according to the Slovak legislation in force at the time of the arrangement, the present measure was not a State aid measure but an act of voluntary agreement with the creditors. Should the Commission conclude otherwise, Konas would be discriminated against, when compared with other cases where companies had applied for an arrangement before the accession of Slovakia to the EU and the resulting debt write-off had not been deemed to be State aid. The recipient adds that, even after accession, the national legislation was not in line with EU law and therefore, however diligent it had been, it could not have known that reaching an arrangement with its creditors required additional conditions to be fulfilled.

(29)

The recipient further submitted that the accrued tax debt resulted mainly from unclear legislation.

(30)

The recipient claimed that the tax office’s assessment of Konas’s situation went beyond what was included in the plan submitted to the court in the arrangement procedure.

(31)

In their reply to the opening of the formal investigation, the Slovak authorities submitted that State aid would be granted only if the tax receivable were written off in the State’s accounts.

(32)

The Slovak authorities submitted that the tax office, when agreeing to the arrangement proposed by Konas, had taken into account the following factors, some of which, it is suggested, would also be borne in mind by a market economy creditor. First, the book value of the pledged real estate was, at the time of the arrangement, only SKK 3,2 million, although the secured receivables amounted to SKK 10,1 million. Second, the bankruptcy procedure tends to be rather lengthy and the sale of assets in the region in question is very problematic. As regards the statistics, the yield obtained from bankruptcy by the tax authorities between 1997 and 2005 is claimed to average only 7 %. Third, the tax office took into account the impact of the liquidation of Konas on regional unemployment (around 40 % at the time of the arrangement), bearing in mind not only redundancies at Konas but also at another company in the region which is dependent on Konas and employs some 400 people. Finally, the tax office took into account the expected future tax revenue.

(33)

As to the tax execution procedure, the Slovak authorities confirmed that between 1998 and 2000 the tax office issued eight execution orders against Konas and decreased the company’s tax debt by SKK 8 106 672,42 to SKK 11 223 459, which was included in the arrangement procedure in 2004. Since 2001, Konas has paid all its taxes regularly and on time.

(34)

The Slovak authorities do not dispute that the present measure constitutes State aid. Their claim is that this aid is compatible with the common market as restructuring aid.

(35)

The Slovak authorities do not dispute the Commission’s conclusion that the write-off of the debt under the arrangement procedure was not made conditional upon the implementation of the plan submitted by Konas to the supervising court pursuant to the Bankruptcy Act. They have, however, sent to the Commission a document from January 2005 entitled ‘Evaluation of the company on the date of the arrangement’ (the evaluation), which had been prepared by Konas and submitted to the tax office. The Slovak authorities contend that this evaluation of the company would allow the Commission to assess whether the aid had been limited to the strict minimum necessary.

(36)

The evaluation first describes the activity of Konas since it was set up in 1992 and includes information on turnover and operating results between 1993 and 2003.

(37)

According to the evaluation, the reason for Konas’s difficulties was high credit exposure linked to production start-up in 1993 which the volume of production was not able to cover. Between 1994 and 1996 Konas accumulated debt, in particular towards the tax office, which was then partly collected by execution and partly carried over until it was eventually partly repaid and partly written off under the arrangement procedure.

(38)

The evaluation then includes a short market analysis where it examines the competitive environment in all the sectors in which Konas is active (6). It describes the position and prospects of Konas in each of these sectors and concludes that there is particular growth potential in the production of tools, protection shields and other mechanical engineering products. In contrast, it proposes cutting back production of single-purpose machinery and small-scale made-to-order production (production of unavailable spare parts, emergency repairs). The prospects for greater demand for the company’s products lie in the development of the automobile industry in Slovakia and in the clear signs of greater interest on the part of EU companies, bolstered by Slovakia’s EU accession. Konas sees itself competitive with its know-how in respect of technologies that have development potential.

(39)

The evaluation further describes Konas’s capacity as being under-utilised, a problem that should be addressed by investment in a computerised milling machine. The measures to be adopted between 2004 and 2008 are set out in the following table, together with the financial restructuring undertaken.

Table 2

Restructuring measures according to the evaluation (in SKK)

(40)

Finally, the evaluation contains a forecast of Konas’s operating results for the period 2005 to 2009, showing that the above measures should contribute to higher profitability. Turnover should grow by 10 % a year as of 2005.

(41)

According to the Slovak authorities, the evaluation dates from January 2005. It is clear that the evaluation was prepared to assess Konas’s situation before the arrangement and to analyse its prospects after the arrangement.

(42)

As to the question of whether the aid was limited to the minimum necessary, the Slovak authorities confirmed that on 31 March 2004 Konas had SKK 3,9 million in cash, which was needed to cover wages (SKK 730 000), the obligations towards the creditors participating in the arrangement (SKK 1 602 769) and the arrangement procedure fees (SKK 140 000).

(43)

As some of the relevant events in the present case took place before the accession of the Slovak Republic to the European Union on 1 May 2004, the Commission first has to determine whether it is competent to act with regard to the disputed measure.

(44)

Measures that were put into effect before accession and are no longer applicable after accession cannot be examined by the Commission either under what is known as the interim mechanism procedure, governed by Annex IV, point 3 of the Accession Treaty, or under the procedures laid down in Article 88 of the EC Treaty. Neither the Accession Treaty nor the EC Treaty requires or empowers the Commission to review such measures.

(45)

However, measures put into effect after accession do fall within the field of competence of the Commission under the EC Treaty. In order to determine the moment when a certain measure was put into effect, the relevant criterion is the legally binding act by which the competent national authority undertakes to grant aid (7).

(46)

The decision of the competent authority to write off some of the claims was taken on 8 June 2004, when the tax office agreed with the arrangement proposed by Konas, i.e. after accession.

(47)

Accordingly, the question of whether the measure is applicable after accession no longer arises.

(48)

The Commission therefore concludes that it is competent to assess the disputed measure pursuant to Article 88 of the EC Treaty.

(49)

Article 87(1) of the EC Treaty states that any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods and affects trade between Member States is incompatible with the common market.

(50)

Writing off a debt towards a public authority such as a tax office involves State resources. Since it benefits an individual undertaking, the measure is selective. The company is active in the production of industrial machinery and equipment, a sector in which trade exists between Member States.

(51)

In the decision to initiate the procedure of Article 88(2) of the EC Treaty, the Commission raised doubts as to whether the measure distorted or threatened to distort competition by conferring on the recipient an advantage that it would normally not be able to obtain on the market. In other words, the Commission had doubts as to whether the State had behaved as a market economy creditor in relation to Konas.

(52)

It was established that the agreement contained the same debt arrangement conditions for both the private creditors and the tax office: 13,3 % of the debt was to be paid to the creditors within a prescribed period, a requirement with which the recipient complied. The remaining 86,7 % was written off.

(53)

However, prior to the arrangement, the tax office was in a legally and economically more advantageous position than the private creditors. It therefore needs to be examined in detail whether the tax office used all the means at its disposal to obtain the highest possible repayment of its receivables, as a market economy creditor would do.

(54)

The Slovak authorities submit that, in their view, the measure constitutes State aid. They acknowledge that, at the time of the arrangement, the question of State aid was simply not considered. The recipient, for its part, argues that the measure is an act of voluntary agreement between creditors and not State aid.

(55)

The Commission cannot accept the argument that the arrangement procedure and the procedure for granting State aid cannot overlap (8). It is not the purpose or the form of the action on the part of the State but its result that determines whether a given action involving State resources confers on a company an advantage that it otherwise would not obtain on the market.

(56)

Similarly, the Commission cannot accept the recipient’s argument that, however diligent it had been, the company could not have known that the write-off might constitute State aid. The EU rules on State aid were applicable in Slovakia in the form of State Aid Act No 231/1999. In their reply to the recipient’s comments, the Slovak authorities rightly pointed out that assessing whether the measure in question constituted State aid was not a matter for the tax office but fell within the remit of the State Aid Office before accession and within that of the Commission after accession.

(57)

The Commission’s doubts set out in the decision to initiate the procedure of Article 88(2) of the EC Treaty as to whether the market economy creditor test was met have not been allayed.

(58)

First, the tax office, unlike the private creditors, was entitled to initiate tax execution on its own initiative through the sale of real estate, machinery or the firm as a whole.

(59)

In fact, the tax office had recourse to this legal instrument on a number of occasions to enforce its claims against Konas (see recital 33), and Konas’s debt towards the tax office was considerably reduced between 1998 and 2000. In their reply to the decision to initiate the procedure of Article 88(2) of the EC Treaty, the Slovak authorities submitted that the tax office did not issue any further execution orders after 2001 because Konas was complying with its tax obligations regularly and on time. It is not clear, however, for what reason the tax office suspended tax execution with regard to Konas’s pre-2001 debt. This debt from previous years was eventually included in the arrangement procedure in 2003.

(60)

Moreover, the Commission notes that, according to the information provided by the Slovak authorities in their comments on the decision to initiate the procedure of Article 88(2) of the EC Treaty, the book value of the pledged real estate (SKK 3,2 million) did not correspond to the level of the receivables secured by this pledge (SKK 10,1 million). This means that the securities required by the State were insufficient.

(61)

It is established case-law that a continuous absence of enforcement on the part of the State of obligations arising from tax and social security legislation might in itself create an advantage by mitigating the burden that the recipient should normally bear (9). It indeed appears that the tax office’s non-enforcement of Konas’s tax obligations, combined with manifestly insufficient security for the State’s receivables over a period of two years (2001 to 2002), constituted State aid. As these events took place before the date of accession and were not applicable thereafter, the Commission is not competent to assess the compatibility of the action in question with the common market. However, if the earlier non-enforcement already constituted State aid, the market economy creditor principle can no longer be referred to once the debt is later (partly) written off.

(62)

Under the tax execution procedure, a tax office can directly sell the assets (receivables and other current assets, movable assets, real estate) of the debtor. At the time of the arrangement, the recipient had cash of SKK 3,9 million (10). The value of the recipient’s cash alone would have exceeded the tax office’s yield from the arrangement (SKK 1,5 million). In addition, the recipient had short-term receivables with a book value of SKK 1,4 million and real estate with a book value of SKK 3 million.

(63)

Lastly, unlike bankruptcy proceedings, tax execution would not involve administrative fees. Since it is a procedure that is initiated and controlled by the tax office itself, it can be assumed that it would be conducted in a speedy manner.

(64)

The Commission does not have sufficient information to be able to assess what the yield would be from the sale of the assets under bankruptcy proceedings in the event of the recipient being liquidated. To the Commission’s knowledge, neither Konas nor the tax office considered the option of bankruptcy, which is why no further calculations were made in this respect.

(65)

The Commission therefore concludes that, if nothing else, tax execution against the recipient’s assets would have produced a higher yield than the arrangement.

(66)

Finally, the Commission notes that it is established case-law (11) that socio-economic factors, such as regional employment and expected future tax revenue, are excluded from the market economy creditor test. The tax office cannot be compared to a commercial partner, such as a supplier who is a creditor of the recipient. It is important to note that the receivables of a supplier and those of the State are fundamentally different in nature. Since the relationship between the supplier and the insolvent firm has a contractual basis, exceptionally the supplier may genuinely suffer from the loss of the business partner. If the insolvent company were liquidated, the supplier would have to find a new client or conclude a contract with the new owner. The greater the supplier’s dependency on the insolvent company, the higher the risk involved. In contrast, the relationship between the State and the insolvent firm is based on public law and is, therefore, not dependent on the will of the parties. Any new owner who took over the assets of the liquidated firm would automatically be obliged to pay taxes. Furthermore, the State is never dependent on a single taxpayer. Finally and most importantly, when levying taxes, the State is not profit-driven and does not act on a commercial basis or on commercial considerations. The analogy with a business partner is therefore not well-founded.

(67)

The Commission therefore concludes that the loss of future taxes cannot be taken into account when applying the market economy creditor principle.

(68)

On the basis of the above evidence, the Commission concludes that in the present case the market economy creditor test was not met and the State conferred on the recipient an advantage that it would not have been able to obtain from the market.

(69)

The Commission therefore concludes that the measure in question constitutes State aid within the meaning of Article 87(1) of the EC Treaty.

(70)

The State aid granted to the recipient comprises the amount of the debt written off by the tax office under the arrangement procedure, which is SKK 9 730 739 (EUR 256 000).

(71)

The primary objective of the measure is to assist a company in difficulty. In such cases, it is possible to apply the exemption laid down in Article 87(3)(c) of the EC Treaty provided that the relevant conditions are met; under the exemption, State aid may be granted to facilitate the development of certain economic activities provided that it does not adversely affect trading conditions to an extent contrary to the common interest.

(72)

Rescue and restructuring aid to ailing companies is currently governed by the Community guidelines on State aid for rescuing and restructuring firms in difficulty (12) (the New Guidelines), which replaced the previous text adopted in 1999 (13) (the 1999 Guidelines).

(73)

Under their transitional provisions, the New Guidelines apply to the assessment of any rescue or restructuring aid granted without the authorisation of the Commission (unlawful aid) where some or all of the aid is granted after 1 October 2004, the date of publication of the New Guidelines in the Official Journal of the European Union (point 104, first subparagraph). Aid unlawfully granted before 1 October 2004 is to be assessed on the basis of the guidelines applicable at the time when it was granted (point 104, second subparagraph).

(74)

The Commission notes that the tax office’s approval of the arrangement was issued on 8 June 2004 and took effect on 2 August 2004. Therefore, the aid was unlawfully granted before 1 October 2004. This means that the applicable guidelines are the 1999 Guidelines in force at the time when the aid was granted.

(75)

The Commission takes note that the recipient is a small enterprise within the meaning of Commission Regulation (EC) No 70/2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises (14).

(76)

Under point 5(c) of the 1999 Guidelines, a firm is regarded as being in difficulty where it fulfils the criteria under domestic law for being the subject of collective insolvency proceedings.

(77)

The recipient was a party to an arrangement procedure, which is one of the options available for insolvent companies under the Bankruptcy Act. The recipient is therefore eligible for restructuring aid.

(78)

In its decision to initiate the procedure of Article 88(2) of the EC Treaty, the Commission raised doubts as to whether the aid was compatible as restructuring aid within the meaning of the 1999 Guidelines on the grounds described in Part III above.

(79)

According to the 1999 Guidelines, the granting of restructuring aid must be tied to and conditional on implementation of a feasible and coherent restructuring plan to restore the firm’s long-term viability. The Member State commits itself to this plan, which must be endorsed by the Commission. Failure by the company to implement the plan is regarded as misuse of aid.

(80)

In substance, the restructuring plan must be such as to enable the recipient to restore its long-term viability within a reasonable timescale and on the basis of realistic assumptions as to future operating conditions. It should describe the circumstances that led to the recipient’s difficulties and identify appropriate measures to address these difficulties. The restructuring measures may not be limited to financial aid designed to make good debts and past losses without tackling the underlying reasons for the difficulties.

(81)

In its decision to initiate the procedure of Article 88(2) of the EC Treaty, the Commission expressed doubts that the tax office had made its decision to write off Konas’s debt conditional on implementation of a restructuring plan of the type described in paragraph 80. These doubts have not been allayed. Formally speaking, the tax office as the granting authority did not have any obligation or competence to evaluate the list of measures addressed by Konas to the supervising court (see recital 20) under the arrangement procedure or to make the write-off of its receivables conditional on duly monitored implementation of these measures. There is no direct link between the granting of the aid by the tax office and the measures proposed by the recipient. The Commission therefore concludes that the first formal condition was not met.

(82)

However, after the opening of the formal investigation procedure, the Slovak authorities submitted an evaluation of the company as described in recital 35. The evaluation clearly addresses the situation of Konas at the time of the arrangement with its creditors. It describes the circumstances that led to the recipient’s difficulties and identifies measures to address these difficulties.

(83)

The restructuring is not limited to debt restructuring. The recipient plans to undertake investments in new technologies and IT and to implement forward-looking measures in the area of training and marketing. The evaluation analyses the position and prospects of Konas on the specific market segments in which it is active.

(84)

Unlike the list of measures submitted to the court under the arrangement procedure, the evaluation contains the elements required for a restructuring plan under the 1999 Guidelines. The Commission considers the evaluation to be essentially a restructuring plan for the period 2004 to 2008; it is designed to restore the long-term viability of Konas and is appropriate in view of the size of the recipient. The financial restructuring in the form of the arrangement with the creditors is the first step in this restructuring. Konas’s main problem was the debt incurred in the second half of the 1990s. Since 2001, Konas has been paying its current liabilities under public law correctly and in due time. The Commission has no reason to doubt Konas’s ability to restore its long-term viability after the measures included in the evaluation, including the debt restructuring, are implemented.

(85)

The Commission notes that, formally speaking, the evaluation was not produced until after the arrangement with creditors had been secured. Nevertheless, it is obvious that the evaluation was directly linked to the arrangement procedure. It was submitted to the tax office before the notification of the measure to the Commission, at a time when the Slovak authorities believed that it would constitute State aid only if the tax receivables were written off from the State’s accounts. It nonetheless remains the case that the aid was not formally made conditional on implementation of the plan by the tax office as the granting authority.

(86)

The Commission considers that, by way of an exception in this specific case, this formal defect can be remedied. This exception is justified firstly in accordance with point 55 of the 1999 Guidelines, which states that the conditions for granting aid for restructuring may be applied less strictly in the case of small businesses, such as the recipient. Second, the exception is permissible because, even though the aid had already been granted, it had not yet been paid out to the recipient (debt write-off requires an additional administrative act on the part of the tax office; see recital 16). Consequently, in accordance with Article 7(4) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (15), the Commission has decided to attach the following conditions to this Decision.

(87)

Firstly, the Slovak authorities are to ensure that the evaluation is properly implemented. Secondly, they are to inform the Commission as to how they will ensure that the evaluation is implemented. Finally, they are not to disburse the aid (i.e. write off the receivables in the tax office’s accounts) until they have notified the Commission of their undertaking to ensure that the evaluation is implemented and how they intend to do so.

(88)

Under point 40 of the 1999 Guidelines, the amount and intensity of the aid must be limited to the strict minimum needed to enable restructuring to be undertaken in light of the existing financial resources of the recipient. The recipient is expected to make a significant contribution to the restructuring from its own resources.

(89)

In its decision to initiate the procedure of Article 88(2) of the EC Treaty, the Commission expressed doubts as to whether this criterion was met. These doubts have been allayed in view of the information on the restructuring of the recipient contained in the evaluation.

(90)

According to the evaluation, the restructuring costs amount to SKK 23 050 896. The restructuring was financed partly through a cash contribution by Konas (payment of the debt of SKK 1 602 769 outstanding after the arrangement) and partly through bank loans with no State aid element totalling SKK 8 million. These contributions clearly constitute own resources of the recipient and external resources with no State aid element and cover about 42 % of the restructuring costs. The Commission does not need to determine whether the other sources of financing for the restructuring of Konas (described as resources of Konas in the evaluation, see Table 2 in recital 39) constitute a real and actual contribution to the restructuring costs.

(91)

The 1999 Guidelines did not contain any thresholds indicating when the own contribution of the recipient is considered to be significant.

(92)

In view of its practice in applying the 1999 Guidelines and the change in its policy in this respect towards the introduction of thresholds under the New Guidelines (16), the Commission considers that the contribution of 42 % can be termed significant and that the aid was limited to the minimum necessary.

(93)

For the sake of completeness, the Commission notes that, in accordance with point 55 of the 1999 Guidelines, the granting of restructuring aid to small enterprises is not usually linked to compensatory measures. The distortion of competition caused by the aid at issue is limited and compensatory measures are, therefore, not required.

(94)

The Commission finds that the Slovak Republic unlawfully granted the write-off of Konas’s tax debt in breach of Article 88(3) of the EC Treaty. This aid is nevertheless compatible with the common market as restructuring aid, provided that its payment is made conditional on the implementation of the restructuring plan,

31.3.2007   

EN

Official Journal of the European Union

L 91/48

(1)

Pursuant to Directive 2004/42/EC, Member States are required to establish monitoring programmes in order to verify compliance with the provisions of that Directive and to report the results of their monitoring programmes and the categories and quantities of products licensed according to Article 3(3) of that Directive on the basis of a common format drafted by the Commission.

(2)

Pursuant to Article 7 of Directive 2004/42/EC in connexion with Annex I thereto, Member States shall prepare and submit to the Commission the first report on the implementation of that Directive by 30 June 2008 at the latest.

(3)

A common format for that first report that should cover the period from 1 January to 31 December 2007 should be therefore established.

(4)

The measures provided for in this Decision are in accordance with the opinion of the Committee referred to in Article 12(2) of Directive 2004/42/EC,

31.3.2007   

EN

Official Journal of the European Union

L 91/52

(1)

Council Regulation (EC) No 2371/2002 of 20 December 2002 on the conservation and sustainable exploitation of fisheries resources under the Common Fisheries Policy (2) and Decision 2004/585/EC provide the framework for the establishment and operation of Regional Advisory Councils.

(2)

Article 2 of Decision 2004/585/EC establishes a Regional Advisory Council to cover the High Seas/Long Distance Fleet in all non-EC waters.

(3)

In accordance with Article 3(1) of Decision 2004/585/EC, representatives of the fisheries sector and other interests groups submitted a request concerning the operation of that Regional Advisory Council to Denmark, Germany, Estonia, Spain, France, Ireland, Italy, Lithuania, the Netherlands, Poland, Portugal and United Kingdom.

(4)

As required by Article 3(2) of Decision 2004/585/EC, the Member States concerned determined whether the application concerning the Regional Advisory Council for the High Seas/Long Distance Fleet was in conformity with the provisions laid down in that Decision. On 7 November 2006, the Member States concerned transmitted a recommendation on that Regional Advisory Council to the Commission.

(5)

The Commission has evaluated the application by the interested parties and the recommendation in the light of Decision 2004/585/EC and the aims and principles of the Common Fisheries Policy, and considers that the Regional Advisory Council for the High Seas/Long Distance Fleet is ready to become operational,

31.3.2007   

EN

Official Journal of the European Union

L 91/53