Commission Regulation (EC) No 1860/2004 of 6 October 2004 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the agriculture and fisheries sectors

• Coming into Force: 01 January 2005
• End of Effective Date: 31 December 2007
• Celex Number: 32004R1860
• ELI: http://data.europa.eu/eli/reg/2004/1860/oj
• Published date: 28 October 2004
• Date: 06 October 2004
• Official Gazette Publication: Official Journal of the European Union, L 325, 28 October 2004

28.10.2004 EN Official Journal of the European Union L 325/4

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COMMISSION REGULATION (EC) No 1860/2004

of 6 October 2004

on the application of Articles 87 and 88 of the EC Treaty to de minimis aid in the agriculture and fisheries sectors

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid (1), and in particular Article 2(1) thereof,

Having published a draft of this Regulation (2),

Having consulted the Advisory Committee on State Aid,

Whereas:

(1) Regulation (EC) No 994/98 empowers the Commission to set out in a regulation a threshold below which aid measures are considered not to meet all the criteria of Article 87(1) of the Treaty and therefore do not fall under the notification procedure provided for in Article 88(3) of the Treaty.

(2) The Commission has applied Articles 87 and 88 of the Treaty and has in particular clarified, in numerous decisions, the notion of ‘aid’ within the meaning of Article 87(1) of the Treaty. The Commission, most recently in Regulation (EC) No 69/2001 (3), has also stated its policy with regard to a de minimis ceiling, under which Article 87(1) can be considered not to apply. In view of the special rules which apply in the agriculture and fisheries sectors, and of the risks that even low levels of aid could fulfil the criteria of Article 87(1) of the Treaty in these sectors, Regulation (EC) 69/2001 does not apply to these sectors.

(3) In the light of the experience acquired by the Commission, especially since the entry into force 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 Regulation (4), and the Community guidelines for state aid in the agriculture sector (5), it can be affirmed that very low levels of aid granted in the agriculture sector do not fulfil the criteria of Article 87(1) of the Treaty, provided that certain conditions are met. This is the case where both the amount of aid received by individual producers remains small, and the overall level of aid granted to the agriculture sector does not go above a small percentage of the value of production. Agricultural production in the Community is normally characterised by the fact that every commodity is produced by a large number of very small producers, producing largely interchangeable goods within the framework of common organisations of the market. For this reason, the impact of small amounts of aid granted to individual producers over a given period of time should be related to the value of agricultural production at sectoral level over the same period of time. A ceiling in the form of an amount per Member State established on the basis of the value of output in the agriculture sector allows a consistent approach in all Member States, based on an objective economic reference value.

(4) In the light of the experience of the Commission in the assessment of State aid in the fisheries sector, especially since the entry into force of the Community guidelines for the examination of state aid to fisheries and aquaculture (6), and of Council Regulation (EC) No 2792/1999 of 17 December 1999 laying down the detailed rules and arrangements for Community structural assistance in the fisheries sector (7), it can be affirmed that very low levels of aid granted in the fisheries sector do not fulfil the criteria of Article 87(1) of the Treaty, provided that certain conditions are met. Given the similarities of the production patterns in the fisheries sector and the agriculture sector, this is the case where both the amount of aid received by individual enterprises remains small, and the overall level of aid granted to the fisheries sector does not go above a small percentage of the value of production.

(5) With a view to increasing transparency and legal certainty, it seems appropriate to lay down a de minimis rule for the agriculture and fisheries sector in a regulation.

(6) In the light of the World Trade Organisation (WTO) Agreement on Agriculture (8), this Regulation should not exempt export aid or aid favouring domestic over imported products. Member States are under an obligation to refrain from granting any support contrary to the commitments contained in that Agreement. Aid towards the cost of participating in trade fairs, or towards studies or consultancy services needed for the launch of a new or existing product on a new market, does not normally constitute export aid. The European Court of Justice in its judgment of 19 September 2002 establishes that, once the Community has legislated for the establishment of a common organisation of the market in a given sector of agriculture, Member States are under an obligation to refrain from taking any measure which might undermine or create exceptions to it (9). This principle also applies in the fisheries sector. For this reason, this Regulation should not apply to aid the amount of which is fixed on the basis of price or quantity of products put on the market.

(7) In the light of the Commission’s experience, it can be affirmed that aid not exceeding a ceiling of EUR 3 000 per beneficiary over any period of three years, where the total amount of such aid granted to all enterprises over three years remains below a ceiling to be set by the Commission at around 0,3 % of the annual agricultural output or of the fisheries output, does not affect trade between Member States and/or does not distort or threaten to distort competition and therefore does not fall under Article 87(1) of the Treaty. The three-year period should be mobile, so that for each new grant of de minimis aid, the total amount of such aid granted during the previous three years needs to be determined. The de minimis aid should be considered to be granted at the moment when the legal right to receive the aid is conferred on the beneficiary. The de minimis rule is without prejudice to the possibility that enterprises may receive, for the same project, State aid authorised by the Commission or covered by a group exemption Regulation.

(8) In the interest of transparency, equal treatment and the proper

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