ERU, Alm.del - 2012-13 - Bilag 150: Grund- og nærhedsnotat vedr. modernisering af statsstøttereglerne, fra erhvervs- og vækstministeren

The European State aid rules were first introduced in the Treaties establishing the EuropeanCoal and Steel Community in 1952 and the European Economic Community in 1957. Theyare currently enshrined in the Treaty on the Functioning of the European Union (hereinafter:"TFEU" or "the Treaty").Article 107 TFEU contains the definition of State aid and the grounds on which aid may beconsidered to be compatible with the internal market, while Article 108 TFEU sets out themain procedural principles governing the Commission's action to ensure Member States'compliance with the substantive State aid rules. Article 109 TFEU allows the Council, actingupon a proposal from the Commission and after consulting the European Parliament, to makeany appropriate regulations for the application of Articles 107 and 108 TFEU.In 1999, the Council adopted Regulation (EC) No 659/19991(hereinafter, the "ProceduralRegulation"), setting out in more details the rules of procedure governing the enforcement ofArticles 107 and 108 TFEU, which have been applied until today without any significantmodifications.State aid procedures, as laid down by Article 108 TFEU and further detailed by theProcedural Regulation, are built around three main axes:–Prior notification by Member States of all planned aid measures is compulsory,except in cases covered by a block exemption regulation or a decision, and theMember State concerned may not put the measure into effect until aCommission decision authorising that aid is taken; to that end, following anessentially bilateral (Member State/Commission) preliminary investigation("first phase"), limited in principle to two months, the Commission may eitherapprove the aid or open a formal investigation ("second phase"), subject to abest endeavour deadline of 18 months, with a view to thereafter approving (ifnecessary, subject to conditions) or prohibiting the aid;The Commission is required to conduct a diligent and impartial examination ofcomplaints submitted from interested parties and take a decision thereonwithout undue delay. Where the Commission takes a decision finding that thereexists no State aid as alleged by a complainant, the Commission must at leastprovide the complainant with an adequate explanation of the reasons for whichthe facts and points of law put forward in the complaint have failed todemonstrate the existence of State aid;Finally, the Commission must keep under constant review all existing aidsystems in Member States and may propose to them any appropriate measuresrequired by the progressive development of the functioning of the internalmarket.

Those main features of the State aid procedure are a direct consequence of the system of Stateaid control foreseen in the Treaty, which is based on the Commission's exclusive competenceto assess the compatibility of State aid measures with the internal market.More than 13 years after its entry into force, a modernisation of the Procedural Regulation isneeded to adapt State aid procedure in a European Union of 27 Member States, 500 millioninhabitants, and 23 official languages.The economic and financial crisis has threatened the integrity of the internal market andshown the importance of streamlined and efficient State aid control and enforcement. Thatexperience pointed out the need for the Commission to have better tools in order to intervenewithin business-relevant timeframes and promote sound use of public resources for growth-oriented policies.On 8 May 2012, the Commission therefore adopted the Communication on "EUState aidmodernisation (SAM)"2which launches a comprehensive reform of the State aid framework.It will ensure that State aid policy contributes both to the implementation of the Europe 2020agenda3which is Europe's growth strategy for the current decade, and to budgetconsolidation.The revision of the Procedural Regulation is one of the elements that should allow theCommission to achieve the objectives of that initiative. Reforming the State aid proceduresshould primarily improve the effectiveness of State aid control4.The need to reform State aid procedures has also been emphasised by the Court of Auditors inits Special Report n�15/2011 "Dothe Commission’s procedures ensure effective managementof State aid control?"5. With the proposed reform of the State aid procedural framework, theCommission will in particular respond to the recommendations of the Court of Auditors to:––––minimise the number of requests for information sent to Member States;deal swiftly with unfounded complaints, in order to provide more legalcertainty to all stakeholders;periodically inform the complainant, the Member State and the beneficiaryabout the progress of each case and about the outcome of the investigation;improve the efficiency and reliability of its data-gathering process.

Complaints are in principle a very useful source of information to direct Commissioninvestigations towards those economic sectors where unlawful State aid hampers competitionat the level of the EU. However, the Commission receives on average more than 300complaints every year, whether lodged by interested parties9or not, among which many areeither not motivated by genuine competition concerns or not sufficiently substantiated. Mostcomplaints are not treated as a priority and the average duration of those cases therefore tendsto increase10. Therefore, the complaints handling procedure is sometimes perceived byMember States and complainants as unpredictable and lacking transparency.In 2009, the Best Practices Code for the conduct of State aid procedures11set out a staged andtransparent procedure to handle complaints. Two years into its application, however,experience shows that the benefits it sought – of shorter duration, increased efficiency andgreater predictability – have not fully materialised. Best Practices could not address some ofthe main shortcomings of the current system, since they directly stem from the ProceduralRegulation. That is why a reform of the Procedural Regulation itself is proposed to addressthose issues.**In that respect, the proposed amendments to the Procedural Regulation aim at improving thequality of the information received by clarifying the requirements to lodge a complaint andformalising a staged, predictable and transparent procedure.Currently, the Commission has to investigate every alleged infringement of the State aid rulesreceived from whatever source. Unlike the competition rules laid down in Articles 101 TFEUand 102 TFEU, in relation to which the lodging of a complaint is regulated by Regulations*

Council of the European Union, Conclusions on Special report n�15/2011 by the European Court ofAuditors: "Dothe Commission’s procedures ensure effective management of State aid control?"-Adoption, 2.5.2012, 9149/12.European Parliament, Resolution on the Court of Auditors‘ special reports in the context of the 2010Commission discharge, 10.5.2012, Paragraphs 116 to 125, 2011/2225(DEC).Paragraph 23b, Communication "EUState Aid Modernisation (SAM)",cited above in footnote 2.Within the meaning of Article 108(2) TFEU and Article 1(h) of the Procedural Regulation.As of 31 March 2012, the average duration of pending complaint cases in DG COMP was 17 months.Communication from the Commission,Best Practices Code for the conduct of State aid procedures,OJC 136, 16.06.2009, p. 13.

1/200312and 773/200413, no specific formal requirement is attached to the lodging of a Stateaid complaint. In the absence of any concrete rules in the Procedural Regulation, the GeneralCourt consequently considered, in theRyanairjudgment of 29 September 201114, that thereare currently no formal requirements to be met in order to put the Commission in possessionof a State aid complaint.In the interests of transparency and legal certainty, the conditions to lodge a complaint whichput the Commission in possession of information regarding alleged unlawful aid and therebyset in motion the preliminary examination should therefore be clarified (Amendment toArticle 10). Indeed it is appropriate to require that:–complainants submit a certain amount of compulsory information. To that end,it is appropriate to empower the Commission to adopt implementing provisionsto define the form and the content of a complaint (Amendment to Article 27).complainants demonstrate that they are interested parties within the meaning ofArticle 108(2) TFEU15and Article 1(h) of the Procedural Regulation16and thatthey therefore have a legitimate interest to lodge a complaint. To reach thatobjective, it is proposed to specify in Article 20(2) on the "rights of interestedparties" that "anyinterested party may lodge a complaint".

In cases where the information received will not be classified as a complaint since it will nothave passed the admissibility criteria, the Commission will no longer be under an obligationto adopt formal decisions. Those submissions will be registered as market information andcould be used at a later stage to conductex officioinvestigations.To complete the staged procedure introduced by the Best Practices Code17, the ProceduralRegulation should formalise the possibility for the Commission to deem complaintswithdrawn if the complainant does not return to it with meaningful information or otherwisefails to cooperate during the procedure. In that way, the treatment of complaints could bestreamlined and improved (Amendment to Article 20(2)).**Complainants mainly draw the attention of the Commission to aid which has already beengranted and therefore constitutes potential illegal aid. In 2009, the Commission adopted aNotice on the enforcement of State aid law by national courts18in order to inform nationalcourts and interested parties about the remedies available and has sought to develop its12

Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules oncompetition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003, p. 1.Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings bythe Commission pursuant to Articles 81 and 82 of the EC Treaty, OJ L 123, 27.4.2004, p.18.Case T-442/07 Ryanair v Commission [2011], not yet published, paragraph 33.See Case 323/82 Intermills v Commission [1984] ECR 3809, paragraph 16.Article 1(h) of Council Regulation 659/99: "‘interestedparty’ shall mean any Member State and anyperson, undertaking or association of undertakings whose interests might be affected by the granting ofaid, in particular the beneficiary of the aid, competing undertakings and trade associations."Communication from the Commission,Best Practices Code for the conduct of State aid procedures,cited above footnote 11.Commission notice on the enforcement of State aid law by national courts,OJ C 85, 09.04.2009, p. 1.

cooperation with national courts by introducing more practical tools for supporting nationaljudges in their daily work.It is proposed to expressly provide that national courts have the right to obtain from theCommission information for the purpose of applying Articles 107(1) and 108 TFEU and toask for an opinion of the Commission on questions related to the application of State aid rules(New Article 23a(1)).It is also proposed to introduce the right for the Commission to make submissions to nationalcourts in written or oral form (New Article 23a(2)). The Commission may act under thatprovision only in the Union public interest (as amicus curiae), i.e. not in support of one of theparties. That proposed provision aims in particular at permitting the Commission to draw theattention of Member States' courts to issues of considerable importance for the consistentapplication of EU State aid law across the internal market. The national courts are not boundto follow an opinion of the Commission. The new Article 23a is also without prejudice to theright or duty of national courts to request preliminary rulings from the Court of Justice underArticle 267 TFEU.**The above proposals should ensure that the Commission receives better substantiatedcomplaints and will therefore have a positive impact on all the actors involved in the handlingof State aid complaints.The compulsory use of the complaints form will facilitate the work of the Commission toidentify whether a complaint involves State aid issues and to determine the degree of prioritywhich should be given to each complaint, without having to send iterative informationrequests to the Member State concerned or the complainant. Given that the Member States areentitled to comment upon and react to each complaint, a possible reduction in the number ofcomplaints would moreover reduce the workload for the Member State concerned.Where complainants also lodge actions before national courts based on claims of breaches ofEU State aid law, national courts will find in the Procedural Regulation the tools at theirdisposal to obtain the Commission's support. That cooperation which will take place within anappropriate timeline should facilitate the implementation of EU State law by national courts.The fact that the Commission can also offer its assistance on its own initiative to nationalcourts will also be useful to raise national courts and litigants' awareness of the cooperationmechanisms between the Commission and the national courts, demonstrate their usefulnessand foster their use.Since complainants are not always aware of the information that the Commission needs to beable to swiftly assess a State aid complaint, a compulsory complaints form will guidecomplainants in the process of collecting and presenting the information needed for theCommission to conclude on the existence of aid in a given case. This should significantlyreduce the need to send subsequent information requests to complainants, since they will haveprovided all the necessary information at their disposal from the start. The increasedtransparency and predictability of the procedure will in itself give complainants a clearer viewon the state of play and progress of the investigation, thereby avoiding unnecessarycorrespondence.*

Over the last years, there has been a significant refinement in the compatibility assessment ofState aid measures. The Commission relies on an effects-based approach which seeks tobalance the positive and negative effects of State aid measures under assessment. Thecompatibility assessment of an aid measure depends on the design of the measure and itsimpact on the market. A proper facts-based assessment has therefore become more important,in particular for complex cases.To meet the Commission's needs in terms of information gathering, it is therefore proposed tointroduce market information tools (MIT) (2.2.1) and a legal basis for conductinginvestigations into particular sectors of the economy and into particular aid instruments(2.2.2) in order to enable the Commission to obtain timely, reliable, factually correct andcomplete information directly from the market.2.2.1Market information tools (MIT)

The current procedural framework as regards the Commission's powers to obtain informationduring State aid proceedings gives rise to a number of difficulties. Where the Commission isdependent on information provided by the Member State, delays can arise when theinformation is not readily available to the national authorities and can place a significantburden on those authorities in certain cases.The Commission tried to tackle some of those issues in the Best Practices Code19. It was inparticular formalised that the Commission services can send, in the context of the formalinvestigation procedure, a copy of the decision to initiate the formal investigation procedureto interested parties and invite them to comment on specific aspects of the case. Byintroducing the possibility to impose sanctions for submitting incomplete or incorrectinformation in replying to an information request, it will be possible to improve the quality ofinformation received by the Commission.To improve the efficiency and transparency of the procedure, it is proposed to go a stepfurther and codify the power that the European Court of Justice recognised to the Commissionon multiple occasions to consult the market20.It is proposed that the Commission may require information via simple request forinformation or by decision from entities other than the Member State concerned in notifiedand unlawful aid procedures after the opening of the formal investigation (New Article 6a andamended Article 10).As in antitrust and mergers, those market information tools would consist in the possibility torequest information from any undertaking, association of undertakings or Member State (NewArticle 6a), coupled with the possibility to sanction the companies concerned through fines orpenalty payments (New Article 6b) if they fail to respond or to provide complete information.19

This would deter third parties from submitting biased information. Furthermore, the fact thatthe same question will be asked to different companies and the replies received submitted tothe Member State for comments would allow the Commission to cross check the informationand ensure the reliability of the data received.In setting the amount of fines and periodic penalty payments, the Commission would take intoaccount the experience gathered in the field of mergers and antitrust. Therefore, the pecuniarysanctions would be in line with the existing values under Council Regulation 139/200421andCouncil Regulation 1/200322. The values chosen offer sufficient incentives for partiesconcerned to comply, being proportionate as to the potential gravity of the offence:–fines not exceeding 1% of the total turnover for supplying incorrect ormisleading information in response to simple requests or requests made bydecisions or for not replying to requests made by decisions (New Article6b(1)).periodic penalty payments not exceeding 5% of the average daily turnover foreach working day of delay, calculated from the date set in the decision in orderto compel them to supply complete and correct information which has beenrequested by decision (New Article 6b(2)).

In line with the principle of sincere cooperation enshrined in the Treaty on the EuropeanUnion, requests sent to Member States and public authorities would not entail the possibleimposition of fines or periodic penalty payments under the Procedural Regulation.For reasons of legal certainty, it is appropriate to establish limitation periods for theimposition and enforcement of fines or periodic penalty payments which are in line with theprovisions of Council Regulation 1/200323(New Articles 15a and 15b).Market information tools would be mostly used in complex individual cases requiring an in-depth assessment, in order to tackle a series of issues as regards the qualification of aid or itscompatibility assessment. The following examples may serve to illustrate the future use of theinstrument: assessing normal market practice (e.g. State aid element in guarantees/loans),market failures and/or incentive effect benchmarking. Selecting the addressees of theinformation requests will be based on objective criteria depending on each case. For example,besides the aid beneficiary, requests could be sent to competitors, customers, consumerassociations, etc., while ensuring that within each category the sample of respondents isrepresentative.The information sought will be readily available to the market actors concerned and consist inparticular in:–Factual market data (e.g. market size, market shares, level of imports etc.) andcompany data (e.g. cost structure, profits, ownership and control, participationsin other companies, etc.);

Confidentiality of the sensitive information provided by the Member States will be fullyguaranteed when using MIT. The opening decision already aims at informing third parties ofthe main features of a case in a manner that protects potentially sensitive information. TheCommission will also ensure that no sensitive information is disclosed when drafting requeststo third parties.When replying to a request for information, market participants will be invited to provide theCommission with the non-confidential version of their reply. If certain data are consideredconfidential, the Commission will ensure that they are adequately protected (for example, byaggregating data or providing a range in which the figures fall).If the Commission wants to use confidential information provided by third parties whichcannot be aggregated or otherwise be anonymised, it will have to obtain their agreementbefore it discloses that information to the Member State to be able to use it in the Decision.In cases where the information marked as confidential does not seem to be covered byobligations of professional secrecy, it is appropriate to establish a mechanism by which theCommission can decide the extent to which such information can be disclosed. Any suchdecision not to accept a claim that information is confidential should indicate a period at theend of which the information will be disclosed, so that the third party concerned can make useof any judicial protection available to it, including any interim measure (New Article 7(9)).**Introducing MIT should lead to a reduction of the administrative burden for Member States.By allowing the Commission to relieve the national authorities of some of the burden ofinformation-gathering, especially in cases where the information is not at the disposal of theMember State and obtaining it would entail significant additional efforts from its part, and todirectly tap into already existing information at companies' level (e.g. for market shares,market structure etc.), a better balance between the aid grantor and the final aid beneficiarycould ultimately be achieved.However, the Member State's obligation to provide all evidence demonstrating thecompatibility of an aid measure will not be modified under the modernised rules. Nor willthey alter the bilateral nature of the State aid procedure. MIT would duly associate MemberStates to the procedure, by giving them the possibility to present their comments on thereplies to information requests (New Article 7(8)). In that way, their rights of defence will beupheld and the transparency of the procedure guaranteed.Direct correspondence between the aid beneficiary and the Commission services would helpbetter identify what is truly needed to conclude the compatibility assessment in a timelymanner, which would be beneficial for the aid recipient and the Member State. Thatdevelopment would also improve the predictability of the beneficiary's situation. The targetedfactual data requested will be readily available to the beneficiary and should entail only a*

fairly limited effort from its part, which it will be ready to exert swiftly in order todemonstrate that the aid it seeks to obtain is actually justified.The use of MIT by the Commission will also be in the interest of competitors andcomplainants, as it will allow the Commission to more carefully assess the compatibility ofthe aid in question, thereby preventing or remedying the undue distortions of competitionstemming from incompatible aid.By using MIT, the Commission will be able to reach the appropriate third parties directly andsimultaneously. This will contribute to more transparent, accurate, and swift informationflows, which should reduce the number for repetitive and successive information requests,thereby shortening the duration of the investigation. The Commission will apply aproportionality criterion when requesting information from the market. Thereby, the burdenon the companies concerned will be reduced to the minimum necessary for the Commission tocomplete its assessment of a State aid measure. Small and medium-sized enterprises (SMEs)will only be exceptionally concerned by MIT, given that MIT would be mostly used incomplex individual cases requiring an in-depth assessment, while most of the aid SMEsreceive is granted through schemes, either approved or blocked-exempted24. In the very rarecases where MIT could concern SMEs, the Commission will adapt its requirements in light ofthe above-mentioned principle of proportionality.Introducing MIT after the opening of the formal investigation would not change the role ofthird parties as a source of information which is already currently foreseen and confirmed byclear case-law of the Court of Justice. Nevertheless, the addressees of decisions imposingfines and/or penalty payments will have the right to make their views known (New Article6b(5)) and to challenge such decisions (New Article 6b(6)).The new rules regarding information-gathering are necessary in order to ensure that theCommission adopts sound and substantiated decisions within business-relevant timelines. Inthat way, the Commission will increase legal certainty for Member States and companies,while at the same time making the State aid policy more efficient and transparent.2.2.2Investigations into sectors of the economy and into aid instruments

In accordance with the objectives of the State Aid Modernisation initiative, the Commission iscommitted to focusing its efforts on the most distortive cases for the functioning of theinternal market. By applying an enhanced horizontal approach in its investigations, theCommission would be in a better position to detect aid in a particular sector or based on aparticular instrument which may restrict or distort competition.The need for reinforced horizontal information is particularly manifest in cases where the datain the possession of the Commission (whether obtained via complaints, notifications ormarket information) would raise issues linked to a specific sector in several Member Statesand there are indications that similar problems may exist in other Member States.

Following the recommendations of the Court of Auditors that the Commission should step upits monitoring activities both in terms of sample size and of scope25, the Commission hasalready increased the use of its currently existing powers to monitor approved aid measuresand exempted schemes ex-post. By so doing, it can collect horizontal information fromMember States on specific economic sectors or the use of particular aid instruments in severalMember States. To increase its knowledge of a particular sector of the economy or State aidissue, the Commission may also send questionnaires, address requests to Member States ororder expert reports and in the future address information requests to market participants.To complete the existing powers of the Commission and to obtain anex anteholistic view ofthe market, it is proposed to introduce a specific legal basis to launch investigations intosectors of the economy and into types of aid measures (New Article 20a).The Commission would carry out that activity by using its power to send requests forinformation to the Member States and to any relevant market players. At the end of itsinquiry, the Commission may publish a report on the results of the inquiry into particularsectors of the economy.Before formally launching a sector inquiry, the Commission would have to analyse allinformation which is already at its disposal or available in the public domain. Forproportionality reasons, launching a sector inquiry will therefore require indications frompublicly available sources that State aid issues in a particular sector or concerning the use of aparticular aid instrument exist in several Member States: e.g. that existing aid measures in aparticular sector or based on a particular aid instrument in several Member States are not, orno longer, compatible with the internal market.Sector inquiries would entail a limited initial effort from some market players to whichrequests for non-public information will be addressed in the first place. The Commission willthen also ask the Member States for information and invite them to comment and give theirviews on its findings. The impact of that initial workload would however be outweighed by asignificant reduction in the workload involved in the future investigation of individual casesfor all concerned (Member States, beneficiaries, market players and the Commission) via areduction of the number of requests for information needed, and the efficiency gains to beexpected in the enforcement of State aid rules through greater transparency and speed.3.RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES ANDIMPACT ASSESSMENTS

Consultation of interested parties and use of expertiseThe reform of State aid procedures was presented to and discussed with the Member States athigh level meetings organised on 6 March, 11 July 2012. In addition, a technical workshop onmarket information tools and sector inquiries took place on 19 September 2012.A public consultation on the handling of State aid complaints and on information gathering inState aid investigations was carried out from 13 July 2012 to 5 October 2012. The replies tothis public consultation are available on the DG Competition website and the results werepresented to the Member States at a high level meeting organised on 9 November 2012.25

Summary of the proposed actionThe proposal consists in amending the provisions of Council Regulation (EC) No 659/99laying down the rules of procedure in State aid investigations as regards the handling ofcomplaints and the gathering of information from the market.Legal basisThe legal basis of the proposal is Article 109 of the Treaty on the Functioning of the EuropeanUnion.Subsidiarity and proportionalityThe proposed amendments to the Procedural Regulation aim at making State aid proceduresmore efficient, thereby contributing to maintaining the integrity of the internal market andachieving the objectives of the State aid modernisation initiative and more generally theEurope 2020 strategy. They will inter alia also alleviate the administrative burden put onMember States and third parties. Therefore, the present proposal of the Commission isproportionate to the political objective pursued.The present proposal concerns the application of State aid rules, which falls within theexclusive competence of the European Union. Therefore the principle of subsidiarity does notapply.Choice of instrumentCouncil Regulation amending Council Regulation (EC) No. 659/99 of 22 March 1999 layingdown detailed rules for the application of Article 93 of the EC Treaty.5.BUDGETARY IMPLICATION

THE COUNCIL OF THE EUROPEAN UNION,Having regard to the Treaty on the Functioning of the European Union, and in particularArticle 109 thereof,Having regard to the proposal from the European Commission,Having regard to the opinion of the European Parliament26,Whereas:(1)In the context of a thorough modernization of State aid rules to contribute both to theimplementation of the Europe 2020 strategy for growth27and to budgetaryconsolidation, Article 107 of the Treaty should be applied effectively and uniformlythroughout the Union. Council Regulation (EC) No 659/1999 of 22 March 1999codified and reinforced the Commission's previous practice to increase legal certaintyand to support the development of State aid policy in a transparent environment.However, in the light of the experience gained in its application and of recentdevelopments such as enlargement and the economic and financial crisis, certainaspects of that Regulation should be amended in order to enable the Commission to bemore effective.In order to assess the compatibility with the internal market of any notified or unlawfulState aid, for which the Commission has exclusive competence under Article 108 ofthe Treaty, it is appropriate to ensure that the Commission has the power, for thepurposes of enforcing the State aid rules, to request all necessary information from anyundertaking, association of undertakings or Member State whenever it has doubts as tothe compatibility of the measure concerned and has therefore opened the formalinvestigation.

For the purpose of assessing the compatibility of an aid measure after the opening ofthe formal investigation procedure, in particular as regards novel or technicallycomplex measures subject to detailed assessment, the Commission should be able, bysimple request or by decision, to require any undertaking, association of undertakingsor Member State to provide all information necessary for completing its assessment, ifthe information at its disposal is not sufficient, taking due account of the principle ofproportionality, in particular for small and medium-sized enterprises.The Commission should be able to enforce compliance with requests for informationaddressed to any undertaking or association of undertakings, as appropriate, by meansof proportionate fines and periodic penalty payments. The rights of the partiesrequested to provide information should be safeguarded by giving them theopportunity to make their views known before any decision imposing fines or periodicpenalty payments. The Court of Justice of the European Union should have unlimitedjurisdiction with regard to such fines and periodic penalties pursuant to Article 261 ofthe Treaty.Fines and periodic penalty payments are not applicable to Member States since theyare under a duty to cooperate sincerely with the Commission in accordance withArticle 4 of the Treaty on European Union, and to provide it with all informationrequired to allow the Commission to carry out its duties under Regulation (EC) No659/1999.In order to safeguard the rights of defence of the Member State concerned, they shouldbe informed of the content of requests for information sent to undertakings,associations of undertakings or Member States and be able to submit theirobservations on the comments received that raise doubts as regards the compatibilityof the aid measure at stake.The Commission should take due account of the legitimate interest of undertakings inthe protection of their business secrets. The Commission should not be able to useconfidential information provided by respondents, which cannot be aggregated orotherwise be anonymised, in any decision unless it has previously obtained theiragreement to disclose that information to the Member State concerned.In cases where that information marked as confidential does not seem to be covered byobligations of professional secrecy, it is appropriate to establish a mechanism bywhich the Commission can decide the extent to which such information can bedisclosed. Any such decision not to accept a claim that information is confidentialshould indicate a period at the end of which the information will be disclosed, so thatthe third party concerned can make use of any judicial protection available to it,including any interim measure.The Commission may, on its own initiative, examine information from whateversource on unlawful aid, in order to ensure compliance with Article 108 of the Treaty,and in particular with the notification obligation and standstill clause laid down inArticle 108(2) of the Treaty, and to assess their compatibility with the internal market.In that context, complaints are an essential source of information for detectinginfringements of Union State aid rules.

To improve the quality of the complaints submitted to the Commission and at the sametime increase transparency and legal certainty, it is appropriate to define the conditionsthat a complaint should fulfil in order to put the Commission in possession ofinformation regarding alleged unlawful aid and set in motion the preliminaryexamination.Complainants should be required to demonstrate that they are interested parties withinthe meaning of Article 108(2) TFEU and of Article 1(h) of Regulation 659/99. Theyshould also be required to provide a certain amount of information in a form that theCommission should be empowered to define in an implementing provision.For reasons of legal certainty, it is appropriate to establish limitation periods for theimposition and enforcement of fines and periodic penalty payments.In order to ensure that the Commission addresses similar issues in a consistent manneracross the internal market, it is appropriate to complete the existing powers of theCommission by introducing a specific legal basis to launch investigations into sectorsof the economy or into certain aid instruments across several Member States. Forreasons of proportionality, sector inquiries should be based on a prior analysis ofpublicly available information pointing to the existence of State aid issues in aparticular sector or concerning the use of a particular aid instrument in severalMember States, for example, that existing aid measures in a particular sector or basedon a particular aid instrument in several Member States are not, or no longer,compatible with the internal market. Such inquiries would enable the Commission todeal in an efficient and transparent way with horizontal State aid issues.Consistency in the application of State aid rules requires that arrangements beestablished for cooperation between the courts of the Member States and theCommission. Such cooperation is relevant for all courts of the Member States thatapply Article 107(1) and Article 108 of the Treaty, in whatever context. In particular,national courts should be able to ask the Commission for information or for its opinionon points concerning the application of State aid law. The Commission should also beable to submit written or oral observations to courts which are called upon to applyArticle 107(1) or Article 108 of the Treaty. Those observations should be submittedwithin the framework of national procedural rules and practices including thosesafeguarding the rights of the parties.In the interests of transparency and legal certainty, information on Commissiondecisions should be made public. It is therefore appropriate to publish decisions toimpose fines or periodic penalty payments, given that they affect the interests of thesources concerned. The Commission, when publishing its decisions, should respect therules on professional secrecy, in accordance with Article 339 of the Treaty.The Commission, in close liaison with the Advisory Committee on State aid, shouldbe able to adopt implementing provisions laying down detailed rules concerning theform, content and other criteria of the complaints submitted in accordance with Article10(1) and Article 20 of Regulation (EC) No 659/1999.Council Regulation (EC) No 659/1999 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:Article 1Regulation (EC) No 659/1999 is amended as follows:(1)(2)The title of Article 5 is replaced by the following:"Request for information made to the notifying Member State";The following Articles 6a and 6b are inserted:"Article 6aRequest for information made to other sources1. After the initiation of the formal investigation procedure provided for in Article 6, theCommission may, if it considers it to be relevant, require an undertaking, an association ofundertakings or another Member State to provide all information necessary to enable it tocomplete its assessment of the measure at stake, if the information available to it is notsufficient.2. Member States shall provide the information on the basis of a simple request and within atime limit which should normally not exceed one month.3. The Commission may require an undertaking or an association of undertakings to provideinformation by simple request. Where the Commission sends a simple request for informationto an undertaking or an association of undertakings, it shall state the legal basis and thepurpose of the request, specify what information is required and fix the time limit withinwhich the information is to be provided. It shall also refer to the fines provided for in Article6b(1) for supplying incorrect or misleading information.4. The Commission may require an undertaking or an association of undertakings to provideinformation by decision. Where the Commission requires an undertaking or an association ofundertakings to supply information by decision, it shall state the legal basis, the purpose of therequest, specify what information is required and fix the time limit within which theinformation is to be provided. It shall also indicate the fines provided for in Article 6b(1) andindicate or impose the periodic penalties payments provided for in Article 6b(2). It shallfurther indicate the right for the undertaking or association of undertakings to have thedecision reviewed by the Court of Justice.5. The Commission shall inform the Member State concerned of the content of requests forinformation sent pursuant to paragraphs 1 to 4.6. The owners of the undertakings or their representatives and, in the case of legal persons,companies or firms, or associations having no legal personality, the persons authorised torepresent them by law or by their constitution, shall supply the information requested onbehalf of the undertaking concerned. Persons duly authorised to act may supply theinformation on behalf of their clients. The latter shall remain fully responsible if theinformation supplied is incomplete, incorrect or misleading.Article 6bFines and periodic penalty payments1. The Commission may by decision impose on undertakings or associations of undertakingsfines not exceeding 1% of the total turnover in the preceding business year where,intentionally or negligently:

(a) they supply incorrect or misleading information in response to a request made pursuant toArticle 6a(3);(b) they supply incorrect, incomplete or misleading information in response to a decisionadopted pursuant to Article 6a(4), or do not supply the information within the specified timelimit.2. The Commission may, by decision, impose on undertakings or associations of undertakingsperiodic penalty payments not exceeding 5% of the average daily turnover in the precedingbusiness year for each working day of delay, calculated from the date established in thedecision, until they supply complete and correct information as requested by the Commissionby decision adopted pursuant to Article 6a(4).3. In fixing the amount of the fine or periodic penalty payment, regard shall be had to thenature, gravity and duration of the infringement.4. Where the undertakings or associations of undertakings have satisfied the obligation whichthe periodic penalty payment was intended to enforce, the Commission may fix the definitiveamount of the periodic penalty payment at a figure lower than that which would arise underthe original decision imposing periodic penalty payments.5. Before adopting any decision in accordance with paragraphs 1 and 2, the Commission shallgive the undertakings or associations of undertakings concerned the opportunity of makingknown their views.6. The Court of Justice of the European Union shall have unlimited jurisdiction within themeaning of Article 261 of the Treaty on the Functioning of the European Union to reviewfines or periodic penalty payments imposed by the Commission. It may cancel, reduce orincrease the fine or periodic penalty payment imposed.";(3)In Article 7, the following paragraphs 8 to 10 are added:"8. Before adopting any decision in accordance with paragraphs 2 to 5, the Commission shallgive the Member State concerned the opportunity of making known its views on theinformation received by the Commission pursuant to Article 6a, to the extent that suchinformation raises doubts as to the compatibility of the measure.9. The Commission shall not use confidential information provided by respondents, whichcannot be aggregated or otherwise be anonymised, in any decision taken in accordance withparagraphs 2 to 5 unless it has obtained their agreement to disclose that information to theMember State concerned. The Commission may take a reasoned decision, which shall benotified to the undertaking or association of undertakings concerned, finding that informationmarked as confidential provided by a respondent is not protected and fixing a period at theend of which the information will be disclosed. That period shall not be less than one month.10. The Commission shall take due account of the legitimate interest of undertakings in theprotection of their business secrets. If an undertaking or association of undertakings providinginformation pursuant to Article 6a so requests, on grounds of potential damage, its identityshall be withheld from the Member State concerned.";(4)Article 10 is amended as follows:

The Commission shall examine without undue delay any complaint submitted by anyinterested party in accordance with Article 20(2).2. If necessary, the Commission shall request information from the Member State concerned.Article 2(2) and Article 5(1) and (2) shall applymutatis mutandis.After the initiation of the formal investigation procedure, the Commission may also requestinformation from other sources. The provisions of Article 6a and 6b shall applymutatismutandis.";(5)The following chapter heading is inserted after Article 14:"CHAPTERIIIALIMITATION PERIODS";(6)The title of Article 15 is replaced by the following:"Limitationperiod for the recovery of aid";(7)The following Articles 15a and 15b are inserted:"Article 15aLimitation period for the imposition of fines and periodic penalty payments1. The powers conferred on the Commission by Article 6b shall be subject to a limitationperiod of three years.2. Time shall start running on the day on which the infringement is committed. However, inthe case of continuing or repeated infringements, time shall begin to run on the day on whichthe infringement ceases.3. Any action taken by the Commission for the purpose of the investigation or proceedings inrespect of an infringement shall interrupt the limitation period for the imposition of fines orperiodic penalty payments, with effect from the date on which the action is notified to theundertaking or association of undertakings concerned.4. Each interruption shall start time running afresh. However, the limitation period shallexpire at the latest on the day on which a period equal to twice the limitation period haselapsed without the Commission having imposed a fine or a periodic penalty payment. Thatperiod shall be extended by the time during which the limitation period is suspended inaccordance with paragraph 5.5. The limitation period for the imposition of fines or periodic penalty payments shall besuspended for as long as the decision of the Commission is the subject of proceedings pendingbefore the Court of Justice.Article 15bLimitation periods for the enforcement of fines and periodic penalty payments1. The powers of the Commission to enforce decisions taken pursuant to Article 6b shall besubject to a limitation period of five years.2. Time shall start running on the day on which the decision becomes final.3. The limitation period for the enforcement of fines or periodic penalty payments shall beinterrupted:

(a) by notification of a decision varying the original amount of the fine or periodic penaltypayment or refusing an application for variation;(b) by any action of the Commission or of a Member State, acting at the request of theCommission, intended to enforce payment of the fine or periodic penalty payment.4. Each interruption shall start time running afresh.5. The limitation period for the enforcement of fines or periodic penalty payments shall besuspended for so long as:(a) time to pay is allowed;(b) enforcement of payment is suspended pursuant to a decision of the Court of Justice.";(8)Article 16 is replaced by the following:"Article 16Misuse of aidWithout prejudice to Article 23, the Commission may in cases of misuse of aid open theformal investigation procedure pursuant to Article 4(4). Articles 6, 6a and 6b, Article 7(1) to(5), Articles 9 and 10, Article 11(1) and Articles 12 to 15 shall applymutatis mutandis.";(9)In Article 20, paragraph 2 is replaced by the following:

"2. Any interested party may submit a complaint to inform the Commission of any allegedunlawful aid and any alleged misuse of aid. To that effect, the interested party shall dulycomplete a form that the Commission should be empowered to define in an implementingprovision and provide all the mandatory information requested in it.Where the Commission considers that the facts and points of law put forward by the interestedparty do not provide sufficient grounds to show, on the basis of a first examination, theexistence of unlawful aid or misuse of aid, it shall inform the interested party thereof and callupon it to submit comments within a prescribed period which shall not normally exceed onemonth. If the interested party fails to make known its views within the prescribed period, thecomplaint shall be deemed to have been withdrawn.The Commission shall send a copy of the decision on a case concerning the subject matter ofthe complaint to the interested party.";(10)The following Chapter VIa is inserted after Article 20:"CHAPTERVIAINVESTIGATIONS INTO SECTORS OF THE ECONOMY AND INTO AID INSTRUMENTSArticle 20aInvestigations into sectors of the economy and into aid instruments1. Where the information available suggests that State aid measures in a particular sector orbased on a particular aid instrument may restrict or distort competition within the internalmarket in several Member States, or that existing aid measures in a particular sector or basedon a particular aid instrument in several Member States are not, or no longer, compatible withthe internal market, the Commission may conduct its inquiry into the sector of the economy orthe use of the aid instrument concerned across various Member States. In the course of that

inquiry, the Commission may request the Member States, or the undertakings or associationsof undertakings concerned to supply the necessary information for the application of Articles107 and 108 of the Treaty, taking due account of the principle of proportionality.The Commission may publish a report on the results of its inquiry into particular sectors ofthe economy or particular aid instruments across various Member States and invite theMember States and any undertakings or associations of undertakings concerned to submitcomments.2. Articles 5, 6a and 6b shall applymutatis mutandis.";(11) The following Chapter VIIa is inserted after Article 23:"CHAPTERVIIACOOPERATION WITH NATIONAL COURTSArticle23aCooperation with national courts1. For the application of Article 107(1) and Article 108 of the Treaty, the courts of theMember States may ask the Commission to transmit to them information in its possession orits opinion on questions concerning the application of State aid rules.2. Where the coherent application of Article 107(1) and Article 108 of the Treaty so requires,the Commission, acting on its own initiative, may submit written observations to courts of theMember States. With the permission of the court in question, it may also make oralobservations.For the purpose of the preparation of its observations only, the Commission may request therelevant court of the Member State to transmit or ensure the transmission to it of anydocuments necessary for the assessment of the case.";(12)Article 25 is replaced by the following:"Article25Addressee of decisions1. Decisions taken pursuant to Article 6a(4) and Article 6b(1) and (2) and Article 7(9) shall beaddressed to the undertaking or association of undertakings concerned. The Commission shallnotify them to the addressee without delay and give the addressee the opportunity to indicateto the Commission which information it considers to be covered by the obligation ofprofessional secrecy.2. All other decisions taken pursuant to Chapters II, III, IV, V and VII shall be addressed tothe Member State concerned. The Commission shall notify them to the Member Stateconcerned without delay and give that Member State the opportunity to indicate to theCommission which information it considers to be covered by the obligation of professionalsecrecy.";(13)In Article 26, the following paragraph 2a is inserted :"2a. The Commission shall publish in theOfficial Journal of the European Unionthedecisions which it takes pursuant to Article 6b(1) and (2).";(14)Article 27 is replaced by the following:"Article27

Implementing provisionsThe Commission, acting in accordance with the procedure laid down in Article 29, shall havethe power to adopt implementing provisions concerning:(a) the form, content and other details of notifications,(b) the form, content and other details of annual reports,(c) the form, content and other details of complaints submitted in accordance with Article10(1) and Article 20(2),(d) details of time-limits and the calculation of time-limits,(e) the interest rate referred to in Article 14(2)."Article 2This Regulation shall enter into force on the on the twentieth day following that of itspublication in theOfficial Journal of the European Union.