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There are currently no known outstanding effects for the Commission Decision of 5 July 2005 on the aid scheme which Italy is planning to implement for the protection of bergamots and bergamot derivatives in Calabria (notified under document number C(2005) 1814) (Only the Italian text is authentic) (2006/218/EC).
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THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof,
Having called on interested parties to submit their comments pursuant to that Article,
Whereas:
I. PROCEDURE
II. DESCRIPTION
expanding the cultivation of bergamots in place of other citrus species;
thinning and grafting combined or not with thinning operations;
the development of nurseries and the mechanisation of holdings;
the construction of farm buildings;
small- and medium-scale infrastructure work in order to lower production costs and encourage the resumption of cultivation;
the construction of processing and marketing facilities;
studies, research and technical assistance;
promotional activities in the commercial sector.
III. INITIATION OF THE PROCEDURE PURSUANT TO ARTICLE 88(2) OF THE TREATY
the proposed aid based on the quantity of bergamots delivered appeared to constitute operating aid which is incompatible with the common market, as indicated in point 3.5 of the Community guidelines for State aid in the agricultural sector(3); yet the Italian authorities had never given an express undertaking to withdraw it despite the request to this effect by the Commission in its letter of 14 March 2000 (see the reply referred to in recital 17);
the proposed aid based on the area cultivated had been presented as an agri-environmental measure but the Italian authorities failed to provide any information showing that the provisions of Articles 22, 23 and 24 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations(4), Articles 12 to 20 of Commission Regulation (EC) No 1750/1999 of 23 July 1999 laying down detailed rules for the application of Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF)(5), and point 5.3 of the Guidelines, would be complied with.
in the absence of details of the nature of the eligible expenditure, certain aid could be operating aid;
the rate envisaged (75 %) was too high for the measures for the production of bergamots; nor was evidence produced of compliance with point 4.1 of the Guidelines regarding the viability of the holdings or enterprises and the existence of outlets;
the infrastructure referred to was not sufficiently well defined: some parts of it could concern individual holdings and be subject to point 4.1 of the Guidelines, which provide for rates of aid of less than 75 %;
as regards the processing of bergamots and the marketing of the oil obtained (non-Annex I product), compliance with the rates of aid and other provisions laid down by the Guidelines on national regional aid(6) and those on State aid for small and medium-sized enterprises(7) was not demonstrated;
as regards research and technical assistance, compliance with points 13 and 14 of the Guidelines had not been demonstrated, nor with the Community framework for State aid for research and development(8), as amended by the Commission Communication of 1998(9) (the rate of 75 % could be too high if some of the conditions contained in those documents were not met);
as regards the promotion of bergamot oil (non-Annex I product), compliance with the relevant provisions of the Guidelines on national regional aid had not been shown.
IV. COMMENTS OF THE ITALIAN AUTHORITIES
a May be raised to 55 % for young farmers, within the meaning of Article 8 of Regulation (EC) No 1257/1999, who make the investment during the five years following setting up. | |||
b May be raised to 45 % for young farmers, within the meaning of Article 8 of Regulation (EC) No 1257/1999, who make the investment during the five years following setting up. | |||
c Small infrastructure investments designed to protect holdings against erosion, together with work requiring engineering needed for water management, are also eligible. | |||
d The following conditions must be met: the seller must provide a statement attesting to the origin of the equipment and to the fact that no aid has been collected in respect of it; it must be shown that the purchase is particularly advantageous for carrying out the project or is justified on exceptional grounds; there must be a reduction in costs and continued value for money; the technical and technological features of the equipment must be consistent with the needs of the project. | |||
e The rates of 40 and 50 % may be raised by 5 % for young farmers. Additional expenditure is that attributable to the use of traditional materials. | |||
Expenditure | Less-favoured areasa | Other areasb | Requirements |
---|---|---|---|
| 50 % | 40 % | *Calculation based on the value of the property, excluding start-up costs |
| 50 % | 40 % | for used equipment, seed |
| 50 % | 40 % | 12 % of total project costs |
| up to 75 % | up to 60 % | without increasing production capacity |
50 + 100 % of additional expenditure | 40 + 100 % of additional expenditure | without increasing production capacitye |
whose profitability is demonstrated where the net income per work unit is 60 % or more of the reference income determined by ISTAT, in accordance with the operational programme for the region of Calabria,
which satisfy the minimum Community standards for the environment, health and animal welfare,
whose tenants have the necessary knowledge and skills,
which undertake to use the investments for the purposes set by the draft order for 10 years in the case of immovable property and five years in the case of moveable property.
a Calculation based on the value of the immovable property, excluding start-up costs. | |
b In the case of leasing without reservation of title, with purchase within four years and in any event before the expiry of the deadline for making the investments. | |
Eligible expenditure | Maximum rate of aid |
---|---|
| 50 % |
| 50 % |
| 50 % |
whose profitability is demonstrated where the return on investment (ratio between the income of the holding and the capital invested) is equal to the return on investment for each section of activity (in the case of new enterprises, profitability should be demonstrated when activities reach their normal rate, in accordance with the information contained in the regional operational programme — ROP — for Calabria),
which satisfy the minimum Community standards for the environment, health and animal welfare,
which guarantee positive economic consequences for basic producers, through supply contracts for a term of at least three years from the date of completion of the investments,
which undertake to ensure the use of the investments for the intended purposes for 10 years in the case of investments in immovable property, and five years in the case of other investments.
designed to increase the production of products for which there are no market outlets or which are counter to any restrictions on production or limitations on Community support under the common organisation of markets,
concerning retail trade.
the conclusion, with the Region, of a contract providing for the application of organic farming methods over the whole of the area cultivated annually, together with the keeping of the farm records provided for in Council Regulations (EEC) No 2092/91(12) and (EC) No 1804/1999(13),
the requirement that the beneficiary apply good agricultural practice on the land and for crops that are not covered by the contract concerned.
a Aid may not be granted for expenditure incurred beyond the seventh year following setting up. In the event of a significant extension of activities, expenditure arising from any additional activities of the beneficiary will be considered admissible. The addition of new members is not considered to be a significant extension of acitvities save where it entails a 30 % increase in the volume of activities of the beneficiary. | |
b In the event of purchase, eligible expenses are limited to the hire costs at the market price. | |
Start-up and extension of activitiesa Eligible expenditure | Maximum rate of aid |
---|---|
| The aid is granted for a maximum of five years; it may not exceed 100 % of the costs borne during the first year, followed by a reduction of 20 % per year. |
a The service is intended for the beneficiary. If services are provided by associations, they must be accessible to all interested parties. | |
Eligible expenditure | Maximum rate of aid |
---|---|
ISO and HACCP standards: Costs associated with the introduction of quality assurance standards and environmental audit systems; training given to people who will have to apply those standards | 100 % of certified expenditure (the overall amount of aid may not exceed EUR 100 000 per beneficiary for each three-year perioda |
Setting up of control systems and certification of quality systems (Regulations (EEC) No 2081/92 and (EEC) No 2092/91) | 100 % of expenditure certified in the first year, followed by a reduction of around 16,7 % per year until fully paid (after six years) |
Cover of fees requested by recognised certification bodies for the initial certification of quality assurance and similar systems | 100 % of expenditure certified in the first year, followed by a reduction of around 16,7 % per year until fully paid (after six years) |
Control and certification of organic farming methods | 100 % of certified expenditure |
a Measures of general interest (infrastructure accessible to the public). | |
Type of investment and beneficiaries | Maximum rate of aid |
---|---|
Investments in infrastructure by public bodies: rural roads and electrification | 100 % |
Investments in new roads serving rural areasa, with private participation | 75 % |
a The project will have to be of general interest to the sector and not create distortions of competition; the information will be published in appropriate publications distributed at least in the region; operators may be notified in real time of the research results; the research results will be made available for use by all interested parties on an equal basis in terms of costs and time; the aid will comply with the relevant terms of the agreement on agriculture concluded during the Uruguay Round multilateral trade negotiations. | |
Research and development | Maximum rate of aid |
---|---|
| 100 % of eligible expenditure in compliance with Commission Communication 98/C 48/2a |
a Staff expenditure (research workers, technicians and back-up staff employed exclusively on research); cost of instruments, equipment, land and premises used exclusively for the research (save in the event of transfer on a commercial basis); cost of consultants and equivalent services used exclusively for the research activity, including the research, technical skills, patents, licence fees, etc. purchased; additional overhead costs incurred directly as a result of the research activity; other operating expenses (e.g. cost of materials, supplies and similar products) incurred directly as a result of the research activity. | |
Research and development (OJ C 45, 17.10.1996) | Maximum rate of aid and eligible expenditurea |
---|---|
| up to 50 % of eligible expenditure |
| up to 25 % of eligible expenditure |
a Operations that are not covered include those such as the dissemination of scientific knowledge, the organisation of fairs and exhibitions and participation in similar events or other public relations initiatives, including opinion polls and market studies. |
b OJ L 109, 6.5.2000, p. 29. Directive as last amended by Directive 2003/89/EC (OJ L 308, 25.11.2003, p. 15). |
The associations and bodies representing producers must ensure access for all producers to advertising measures on equal terms. |
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a SMEs satisfying the definition in Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprisesb. | |
b OJ L 10, 13.1.2001, p. 33. Regulation as last amended by Regulation (EC) No 364/2004 (OJ L 63, 28.2.2004, p. 22). | |
Type of aid | Maximum rate of aid |
---|---|
Advertising of high-quality products in compliance with Article 28 of the Treaty. Advertising of products with a designation of origin within the meaning of Regulation (EEC) No 2081/92. Advertising of products with a designation of origin within the meaning of Regulation (EEC) No 2092/91. | Up to 50 % of eligible expenditure with the possibility of an increase to 75 % for SMEsa in Objective 1 areas. |
In all cases:
aid will not be granted to individual enterprises,
enterprises which conduct advertising campaigns will be selected on the basis of a procedure that complies with Directive 92/50/EEC or, if that Directive does not apply, on the basis of transparent and non-discriminatory procedures,
in all cases, campaigns will comply with at least one of the positive criteria laid down, since they will concern organic or high-quality products or products with a designation of origin.
a The service is intended for the beneficiary. Services provided by bodies representing producers must be accessible to all farmers. | |
b SMEs satisfying the definition in Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises.. | |
Type of aid | Maximum rate of aid |
---|---|
| up to EUR 100 000 per beneficiarya and per three-year period or, in the case of SMEsb, 50 % of eligible expenditure, the larger amount applying |
ITL 2 billion (EUR 1 032 914) for the measures provided for in Article 4 (in accordance with Article 4 of Law No 39),
ITL 6 billion (EUR 3 098 742) for the measures provided for in Articles 2, 3, 5, 7 and 8 (in accordance with Article 6(2) of Law No 39),
ITL 4 billion (EUR 2 065 828) for the measures provided for in Article 6 (in accordance with Article 6(3) of Law No 39).
V. EVALUATION
in the case of the aid provided for in Articles 2, 4, 5, 6 and 8 of the draft order (concerning promotion in the broad sense), the Community guidelines for State aid in the agricultural sector, hereinafter called ‘the Guidelines’(16) (in the case under consideration, the evaluation cannot be made in the light of the provisions of Commission Regulation (EC) No 1/2004 of 23 December 2003 on the application of Articles 87 and 88 of the Treaty to State aid to small and medium-sized enterprises active in the production, processing and marketing of agricultural products(17), since Article 20(3) states that where its conditions are not fulfilled, the Commission will examine notifications pending at the time of its entry into force under the Guidelines and that, in this case, under the draft order it cannot be excluded that enterprises other than small and medium-sized ones may also qualify for aid),
in the case of the aid referred to in Article 3 of the draft order, the Guidelines on national regional aid(18) and Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises(19) which, pursuant to Article 9a(1)(20), applies to notifications pending, other than those concerning aid for research and development,
in the case of the aid referred to in Article 7 of the draft order, the Community Framework for State aid for research and development(21) and the 1998 Commission Communication amending the Community framework for State aid for research and development(22),
in the case of the aid for promotion and advertising referred to in Article 8 of the draft order:
the Community Guidelines for State aid for advertising of products listed in Annex I to the EC Treaty and of certain non-Annex I products(23), in the case of advertising measures for bergamot as a fruit, and the Community guidelines on national regional aid, in the case of advertising measures for bergamot essence,
the Guidelines, in the case of promotion/technical assistance measures in favour of bergamot producers, and the Guidelines on national regional aid together with Regulation (EC) No 70/2001, in the case of promotion/technical assistance measures in favour of producers of essential bergamot oil.
an aid rate of 40 % of eligible expenditure for investments in less-favoured areas and of 50 % for investments in less-favoured areas with the possibility of a 5 % increase in the rate for investments made by young farmers during the five years following setting up (the rates of aid expressing a gross subsidy equivalent),
a list of eligible expenditure consisting of the purchase, acquisition or improvement of immovable property, the purchase of new material and equipment, including software (the purchase of used equipment may be considered eligible where the following four conditions are met: a certificate from the seller confirming the exact origin of the equipment and attesting that it has not qualified for national or Community aid; the purchase of the equipment must be particularly advantageous for the programme or project and be justified by exceptional circumstances such as the absence of available new equipment within the required time; the costs involved, and therefore the amount of aid, must be low compared with the costs of the same equipment purchased new, while maintaining value for money; the used equipment must have the technical and/or technological characteristics necessary to comply with the project specification) and the overheads (architects, engineers and experts fees, feasibility studies, puchases of trade marks and licences, etc.) up to 12 % of the two items of expenditure mentioned previously,
the need, for the beneficiary holdings, to be viable on the basis of their prospects and to comply with the minimum environmental, health and animal welfare standards.
for services provided by outside consultants the aid must not exceed 50 % of the costs of such services; the services concerned must not be ongoing or periodic nor relate to the enterprise's usual operating expenditure, such as routine tax consultancy services, regular legal services, or advertising,
in the case of participation in fairs and exhibitions, the gross aid must not exceed 50 % of the additional costs incurred in renting, setting up and running the stand (this exemption applies only to the first participation of an enterprise in a particular fair or exhibition).
VI. CONCLUSIONS
the aid provided for in Article 2 of the draft order is compatible with the common market on condition that it is reserved for beneficiaries who start work only after an aid application has been submitted to the competent authority, and that the proposed rates of aid express a gross subsidy equivalent,
the aid provided for in Article 3 of the draft order is compatible with the common market on condition that they are granted only to those who have submitted an aid application before starting their investments,
the aid provided for in Article 4 of the draft order does not constitute State aid within the meaning of Article 87(1) of the Treaty,
the aid provided for in Article 5 of the draft order for the checks carried out in the organic products sector and for the establishment of control and certification systems of quality systems pursuant to Regulation (EEC) No 2081/92 is compatible with the common market,
the aid provided for in Article 5 of the draft order to launch or extend the activities of producer groups and the aid provided for in that Article to cover the fees requested by recognised certification bodies for the initial certification of quality assurance and similar systems is compatible with the common market on condition that all the aid to cover expenditure on the introduction of ISO and HACCP quality assurance programmes and the fees requested by certification bodies is limited to EUR 100 000 per beneficiary for each three-year period,
the aid provided for in Article 6 of the draft order does not constitute State aid within the meaning of Article 87(1) of the Treaty,
the aid provided for in Article 7 of the draft order for bergamots as fruit is compatible with the common market,
the aid provided for in Article 7 of the draft order for bergamot essence will be compatible with the common market if the concepts of industrial research and precompetitive activities are in line with those listed in Annex I to the Community framework for State aid for research and development,
the aid provided for in Article 8 of the draft order for advertising of bergamots as fruit and bergamot essence is compatible with the common market,
the aid provided for in Article 8 of the draft order for promotion and the dissemination of general information to bergamot producers is compatible with the common market,
the aid provided for in Article 8 of the draft order for promotion and the dissemination of general information for producers of essential bergamot oil which correspond to the Community definition of small and medium-sized enterprise is compatible with the common market provided that the conditions set out in Article 5 of Regulation (EC) No 70/2001 are met,
irrespective of the size of the beneficiary, the aid provided for in Article 8 of the draft order for promotion and the dissemination of general information for producers of essential bergamot oil does not constitute State aid within the meaning of Article 87(1) of the Treaty on condition that all the substantive and formal requirements laid down by Regulation (EC) No 69/2001 are met.
HAS ADOPTED THIS DECISION:
The aid provided for in Article 4 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 4 of the draft order sent by the Italian authorities following the initiation of the procedure provided for in Article 88(2) of the Treaty in respect of Articles 4 and 6 of that Law, does not constitute State aid within the meaning of Article 87(1) of the Treaty.
The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 2 of the draft order, is compatible with the common market on condition that it is reserved for beneficiaries who start work only after an aid application has been submitted to the competent authority, and that the rates of aid proposed in the draft order express a gross subsidy equivalent.
The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 3 of the draft order, is compatible with the common market on condition that it is granted only to those who have submitted an aid application before starting their investments.
The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 5 of the draft order, is compatible with the common market on condition that all the aid to cover expenditure on the introduction of ISO and HACCP quality assurance programmes and the fees requested by certification bodies is limited to EUR 100 000 per beneficiary for each three-year period.
The aid provided for in Article 4 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 6 of the draft order, does not constitute State aid within the meaning of Article 87(1) of the Treaty.
1.The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 7 of the draft order, is compatible with the common market where they concern bergamots as fruit.
2.The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 7 of the draft order, is compatible with the common market where they concern essential oil of bergamot on condition that the concepts of industrial research and precompetitive activities correspond to those listed in Annex I to the the Community framework for State aid for research and development.
1.The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 8 of the draft order, is compatible with the common market where it concerns advertising measures.
2.The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 8 of the draft order, is compatible with the common market where it concerns promotional measures and measures for the dissemination of general information for the benefit of bergamot producers.
3.The aid provided for in Article 6 of Law No 39 of 25 February 2000, the detailed rules for the application of which are laid down in Article 8 of the draft order, is compatible with the common market where it concerns promotional measures and measures for the dissemination of general information for producers of essential bergamot oil which correspond to the Community definition of small and medium-sized enterprise, provided that the requirements of Article 5 of Regulation (EC) No 70/2001 are met.
4.Irrespective of the size of the beneficiary, the aid provided for in Article 8 of the draft order for promotion and the dissemination of general information for producers of essential bergamot oil does not constitute State aid within the meaning of Article 87(1) of the Treaty on condition that all the substantive and formal requirements laid down by Regulation (EC) No 69/2001 are met.
Italy shall inform the Commission, within two months of the date of notification of this Decision, of the measures taken to comply with the requirements of Articles 2, 3, 6 and 7.
This Decision is addressed to the Italian Republic.
Done at Brussels, 5 July 2005.
For the Commission
Mariann Fischer Boel
Member of the Commission
OJ L 161, 26.6.1999, p. 1. Regulation as last amended by Regulation (EC) No 173/2005 (OJ L 29, 2.2.2005, p. 3).
OJ L 160, 26.6.1999, p. 80. Regulation as last amended by Regulation (EC) No 2223/2004 (OJ L 379, 24.12.2004, p. 1).
OJ L 214, 13.8.1999, p. 31. Regulation as last amended by Regulation (EC) No 1763/2001 (OJ L 239, 7.9.2001, p. 10).
Decision C(2000) 1600 of 15 June 2001.
As shown in the tables attached to Article 8, this includes both promotion and advertising measures.
See footnote 3.
See footnote 6.
See footnote 17.
Inserted by Article 1(9) of Commission Regulation (EC) No 364/2004 amending Regulation (EC) No 70/2001 as regards the extension of its scope to include aid for research and development (OJ L 63, 28.2.2004, p. 22).
See footnote 8. The Framework continues to apply in the case under consideration since Commission Regulation (EC) No 364/2004 provides expressly, by inserting a new Article 9a in Regulation (EC) No 70/2001, that notifications concerning aid for research and development pending on 19 March 2004 (which is the situation in this case) will continue to be assessed under the Community framework for State aid for research and development.
See footnotes 9 and 23.
See point 3.6 of the Guidelines.
See footnote 4.
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