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HAS ADOPTED THIS REGULATION:
CHAPTER I
DEFINITIONS AND AID
Article I
Definitions
For the purposes of this Regulation, the following definitions shall apply:
| (a) |
'self-propelled seagoing commercial vessels' shall mean: |
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vessels of not less than 100 gt used for the transportation of passengers
and/or goods, |
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vessels of not less than 100 gt for the performance of a specialised service
(for example, dredgers and ice breakers), |
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tugs of not less than 365 kW, |
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fishing vessels of not less than 100 gt for export outside the Community, |
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unfinished shells of the abovementioned vessels that are afloat and mobile. |
For the purposes of the above, 'self-propelled seagoing vessel' shall mean a vessel that, by means of its permanent propulsion and steering, has all the characteristics of self-navigability on the high seas.
Military vessels (i.e. vessels which according to their basic structural characteristics and capability are specifically intended to be used exclusively for military purposes, such as warships and other vessels for offensive or defensive action) and modifications made or features added to other vessels exclusively for military purposes shall be excluded, provided that any measures or practices applied in respect of such vessels, modifications or features are not disguised actions taken in favour of commercial shipbuilding inconsistent with this Regulation;
| (b) |
'shipbuilding' shall mean the building, in the Community, of self-propelled
seagoing commercial vessels; |
| (c) |
'ship repair' shall mean the repair or reconditioning in the Community of
self-propelled seagoing commercial vessels; |
| (d) |
'ship conversion' shall mean the conversion, in the Community, of self-propelled
seagoing commercial vessels of not less than 1000 gt, on condition that conversion
operations entail radical alterations to the cargo plan, the shell, the propulsion
system or the passenger accommodation; |
| (e) |
'aid' shall mean State aid within the meaning of Articles 92 and 93 of the
Treaty. This shall include not only aid granted by the State itself but also that
granted by regional or local authorities or other public bodies and any aid elements
contained in financing measures taken directly or indirectly by Member States
in respect of shipbuilding, repair or conversion undertakings which cannot be
regarded as a genuine provision of risk capital according to standard investment
practice in a market economy; |
| (f) |
'contract value before aid' shall mean the price laid down in the contract
plus any aid granted directly to the yard; |
| (g) |
'related entity' shall mean any natural or legal person who: |
| (i) |
owns or controls an undertaking engaged in shipbuilding, ship repair or ship
conversion, or |
| (ii) |
is owned or controlled, directly or indirectly, whether through stock ownership
or otherwise, by an undertaking engaged in shipbuilding, ship repair or ship conversion. |
Control shall be presumed to arise once a person or undertaking engaged in shipbuilding, ship repair or ship conversion owns or controls an interest of more than 25 per cent in the other or vice versa.
Article 2
Aid
| 1. |
Aid granted, whether directly or indirectly, for shipbuilding, ship repair
and ship conversion, financed by Member States or their regional or local authorities
or through State resources in any form whatsoever, may be considered compatible
with the common market only if it complies with the provisions of this Regulation.
This provision applies not only to aid granted to undertakings engaged in such
activities but also to related entities. |
| 2. |
For the purposes of this Regulation, aid granted indirectly includes all forms
of aid to shipowners or to third parties which are available as aid for the building
or conversion of ships such as credit facilities, guarantees and tax concessions.
Concerning tax concessions, these provisions shall be without prejudice to the
Community guidelines on State aid to maritime transport (1),
and in particular point 3.1 thereof, and any amendments thereto. |
| 3. |
No aid granted pursuant to this Regulation may be conditional upon discriminatory
practices against products originating in other Member States. In particular,
aid granted by a Member State to its shipowners or to third parties in that State
for ship building or ship conversion may not distort, or threaten to distort,
competition between shipyards in the Member State and shipyards in other Member
States in the placing of orders. |
CHAPTER II
OPERATING AID
Article 3
Contract-related operating aid
| 1. |
Until 31 December 2000, production aid in support of contracts for shipbuilding
and ship conversion, but not ship repair, may be considered compatible with the
common market provided that the total amount of all forms of aid granted in support
of any individual contract (including the grant equivalent of any aid granted
to the shipowner or third parties) does not exceed, in grant equivalent, a common
maximum aid ceiling expressed as a percentage of the contract value before aid.
For shipbuilding contracts with a contract value before aid of more than ECU 10
million, the ceiling shall be 9 per cent; in all other cases the ceiling shall
be 4.5 per cent. |
| 2. |
The aid ceiling applicable to a contract shall be that in force at the date
of signature of the final contract. |
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However, the preceding subparagraph shall not apply in respect of any ship delivered more than three years from the date of signing of the final contract. In such cases, the ceiling applicable to that contract shall be that in force three years before the date of delivery of the ship. The Commission may, however, grant an extension of the three-year delivery limit when this is found justified by the technical complexity of the individual shipbuilding project concerned or by delays resulting from unexpected disruptions of a substantial and defensible nature in the working programme of a yard due to exceptional circumstances, unforeseeable and external to the company. |
| 3. |
The grant of aid in individual cases in application of an approved aid scheme
shall not require prior notification to, or authorisation from, the Commission. |
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However, where there is competition between different Member States for a
particular contract, the Commission shall require prior notification of the relevant
aid proposals at the request of any Member State. In such cases, the Commission
shall adopt a position within 30 days of notification; such proposals may not
be implemented before the Commission has given its authorisation. By its decision
in such cases, the Commission shall ensure that the planned aid does not affect
trading conditions to an extent contrary to the common interest. |
| 4. |
Aid in the form of state-supported credit facilities granted to national and
non-national shipowners or third parties for the building or conversion of vessels
may be deemed compatible with the common market and shall not be counted within
the ceiling if it complies with the terms of OECD Council Resolution of 3 August
1981 (OECD Understanding on Export Credits for Ships) or with any agreement amending
or replacing that Understanding. |
| 5. |
Aid related to shipbuilding and ship conversion granted as development assistance
to a developing country shall not be subject to the ceiling. It may be deemed
compatible with the common market if it complies with the terms laid down for
that purpose by OECD Working Party 6 in its Agreement concerning the interpretation
of Articles 6 to 8 of the OECD Understanding on Export Credits for Ships or with
any later addendum or corrigendum to the said Understanding. |
The Commission must be given prior notification of any such individual aid proposal. It shall verify the particular development content of the proposed aid and satisfy itself that it falls within the scope of the Understanding referred to in the first subparagraph and that the offer of development assistance is open to bids from different yards.
CHAPTER III
CLOSURE AND RESTRUCTURING AID
Article 4
Closure aid
| 1. |
Aid to defray the normal costs resulting from the total or partial closure
of shipbuilding, ship repair or ship conversion yards may be considered compatible
with the common market provided that the resulting capacity reduction is of a
genuine and irreversible nature. |
| 2. |
The costs eligible for the and referred to in paragraph 1 are: |
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payments to workers made redundant or retired before legal retirement age, |
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the costs of counselling services to workers made or to be made redundant
or retired before legal retirement age, including payments made by shipyards to
facilitate the creation of small enterprises which are independent of the shipyards
in question and whose activities are not principally shipbuilding, ship repair
or ship conversion, |
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payments to workers for vocational retraining, |
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expenditure incurred for the redevelopment of the yard(s), its buildings,
installations and infrastructure for use other than that specified in points (b),
(c) and (d) of Article 1. |
| 3. |
In addition, in the case of undertakings which totally cease shipbuilding,
ship repair or ship conversion, the following measures may also be deemed compatible
with the common market: |
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aid of an amount not exceeding the higher of the following two values, as
determined by an independent consultants report: the residual book value of the
installations, ignoring that portion of any revaluation since 1 January 1991 that
exceeds the national inflation rate, or the discounted value of the contribution
to fixed costs obtainable from the installations over a three-year period (less
any advanta the aided undertaking derives from their closure); |
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aid such as loans or loan guarantees for working capital needed to enable
the undertaking to complete unfinished works provided that this is kept to the
minimum necessary and a significant proportion of the work has already been done. |
| 4. |
The amount and intensity of aid must be justified by the extent of the closures
involved, account being taken of the structural problems of the region concerned
and, in the case of conversion to other industrial activities, of the Community
legislation and rules applicable to those new activities. |
| 5. |
In order to establish the irreversible nature of aided closures, the Member
State concerned shall ensure that the closed shipbuilding, ship repair and ship
conversion facilities remain closed for a period of not less than ten years. |
Article 5
Restructuring aid
| 1. |
Aid for the rescue and restructuring of undertakings in difficulties, including
capital injections, debt write-offs, subsidised loans, loss compensation and guarantees,
may exceptionally be considered compatible with the common market provided that
it complies with the Community guidelines on State aid for rescuing and restructuring
firms in difficulty (2). |
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Furthermore, in cases of restructuring, the following additional specific
conditions must also be respected: |
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the undertaking has not been granted any such aid pursuant to Regulation (EC)No
1013/97(3), |
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the aid is a one-off operation, with clear and unequivocal undertakings from
the Member State concerned that no further aid will be granted to the undertaking
or its legal successors in the future, |
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there is a genuine and irreversible reduction in the shipbuilding, ship repair
or ship conversion capacity of the undertaking concerned commensurate with the
level of aid involved (in that regard the level of actual production in the preceding
five years will be the determining factor in the level of capacity reduction required), |
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the closed capacity must have been regularly used for shipbuilding, ship repair
or ship conversion up to the date of notification of the particular aid in accordance
with Article 10, |
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the closed capacity must remain closed to shipbuilding, ship repair or ship
conversion for not less than 10 years from the Commission's approval of the aid, |
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if the closed capacity is re-used for alternative purposes, these must be
independent of the shipyard in question and the activities must not be related
principally to shipbuilding, ship repair or ship conversion, |
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the Member State concerned must agree to cooperate fully with monitoring arrangements
established by the Commission, including on-site inspections, where appropriate
by independent experts. |
| 2. |
In assessing the regularity of production and the capacity reduction involved,
the Commission shall base its decision not only on the theoretical capacity of
the yard(s) of the undertaking but also on the level of actual production over
the preceding five years. No account will be taken of capacity reductions in other
undertakings in the same Member Stale unless capacity reductions in the beneficiary
undertaking are impossible without undermining the viability of the restructuring
plan. |
| 3. |
The Commission shall seek the views of Member States on all such cases where
the aid is in excess of ECU 10 million before adopting a position on them. |
| 4. |
In the case of restructuring operations lasting several years and involving
large amounts of aid, the Commission may require that aid be disbursed in instalments
subject to prior notification and approval by the Commission. |
1 OJC 205,5.7.1997,p.5
2 0J C 368,23.12.1994,p.12.
3 OJ L 148, 6.6.1997,
p.1.
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