Keywords
Summary

Keywords

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State aid ° Prohibition ° Derogations ° Aid to shipbuilding ° Directive 90/684 ° Derogation criteria ° Aid granted as development assistance to a developing country ° Incompatibility with the common market of aid not pursuing a development objective ° Role of the Commission ° Determination as to whether the development objective is genuine

(EEC Treaty, Art. 92(3); Council Directive 90/684, Art. 4(7))

Summary

Article 4(7) of Directive 90/684 on aid to shipbuilding, adopted pursuant to Article 92(3)(d) of the Treaty, which provides that such aid, when granted as development assistance to a developing country, may, without having to comply with the maximum ceiling defined in Article 4(1) to (3), be deemed compatible with the common market if it complies with the terms of the OECD Agreement on Export Credit for Ships, must be understood as meaning that the Commission has, in respect of aid which a Member State claims to be covered by that provision, a discretion relating in particular to the development content of the proposed aid. The purpose of this is to prevent Member States, under the guise of development assistance, from in fact granting aid to their national shipbuilding industry by releasing themselves from the constraints arising under Community law. In the exercise of that discretion, the Commission was correct to refuse to treat as development assistance aid designed to reduce the price of a vessel to be purchased by an undertaking in a developing country which was financially capable of buying new ships on the normal market and engaged in operations not directly linked to the import or export trade of the country in question.