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State aid to shipbuilding

State aid to shipbuilding

Outline of the Community (European Union) legislation about State aid to shipbuilding

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Competition > Rules applicable to specific sectors > Competition in transport

State aid to shipbuilding (I)

Document or Iniciative

Council Regulation (EC) No 3094/95 of 22 December 1995 on aid to shipbuilding [See amending acts].

Summary

Regulation (EC) No 3094/95, which was the result of an agreement concluded in 1994 within the framework of the Organisation for Economic Cooperation and Development (OECD) regarding normal competitive conditions in the commercial shipbuilding and repair industry, cannot enter into force until the agreement has been ratified by all the parties. Given the reluctance by the United States to ratify, the Council initially adopted Regulation (EC) No 1540/98 in its place. This Regulation has now expired and has been replaced by the link on state aid to shipbuilding.

Definition of some of the terms used in the Regulation (“shipbuilding”, “ship repair”, etc.).

Enumeration of the various types of aid and the conditions which must be satisfied for them to be judged compatible with the common market:

  • social assistance (when such aid is intended to cover the cost of measures for the exclusive benefit of workers who lose retirement benefits or who are made redundant or are otherwise permanently deprived of their employment in the respective shipbuilding, conversion or repair enterprise, when such assistance is related to the discontinuance of shipyard activities, bankruptcy, or changes in activities other than shipbuilding, conversion or repair);
  • research and development aid (when such aid relates to fundamental research, basic industrial research, applied research or development, provided the limits set by the Regulation are observed);
  • indirect aid (when this is given in the form of state loans and guarantees, as development assistance to a developing country or for the building or conversion of ships, provided the conditions laid down in the Regulation are observed).

Derogations in favour of Spain, Portugal and Belgium, whereby reconstruction aid granted in the form of investment assistance and any other aid for social measures not covered by the Regulation and granted after 1 January 1996 may be authorised, provided the conditions laid down in the Regulation are observed.

Possibility of considering other aid to be compatible in the particular cases listed in the Regulation.

Monitoring procedure:

  • obligation on Member States to give the Commission advance notice of any aid scheme or amendment of an existing scheme, any decision to apply an aid scheme to an undertaking or any individual application of aid schemes;
  • obligation on Member States to provide the Commission with various reports on aid, on the basis of which the Commission draws up an annual overall report to serve as a basis for discussion with national experts.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 3094/95 31.12.1995 OJ L 332 of 30.12.1995
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2600/97 23.12.1997 L 351 of 23.12.1997

Related Acts

Seventh Commission report to the Council on the situation in world shipbuilding [COM (2003) 232 final – Not published in the Official Journal].

The countries or regions with the largest market shares in this sector are Japan, South Korea, China and the European Union. The sector is currently reeling from a deep crisis caused by three factors: past over-ordering, the global economic slowdown – and particularly the US slowdown – and the repercussions of September 11.

Order intake worldwide fell by 12.3% from 2001 to 2002, following a decrease of 20.7% between 2000 and 2001. European shipyards have, however, been the worst affected by this slump, with orders generally down 50% on 2001 and by over 70% compared to 2000. The hardest hit vessels are container ships and cruise ships. Only oil product tankers and bulk carriers have seen increased ordering, due to the replacement of old tonnage following new European Union maritime safety regulations and strong domestic demand in the Far East.

The main shipbuilding regions have, however, been affected in different ways: Japanese yards have the advantage of strong domestic demand, especially for bulk carriers; South Korea and China are battling for tanker contracts; and the European Union is only really active in the ferries and small tankers segment, where replacement needs are building up, although it is possible that Korean shipbuilders might try to further penetrate this market segment.

Prices: the statistics show that some categories of vessel are particularly affected by a major drop in market prices. Large container ships have seen their sales prices fall as a result of excessive price-cutting by Korean yards. The trend has been such that production costs have not always been covered. This is all the more surprising as the current weakness of the US dollar against the euro, won and yen should have led to an across-the-board increase in US dollar prices. Studies have also been carried out to investigate the relationship between the normal price, which is the full cost of production plus a profit margin of 5%, and the actual contract price charged by certain Korean shipyards. Given that production costs have risen in recent years, the gap between contract prices and normal prices has widened further. The studies are based on an analysis of several Korean yards and have revealed that the difference between the normal price and the contract price ranges from between -1% and -39%. All these results indicate a clear trend: Korean shipyards are trying to grab every order that appears in the market no matter the cost, despite assertions made to the contrary by the management of the different Korean groups. This strategy could be damaging if Korean yards fail to take certain factors into consideration, such as inflation and debt servicing, and major financial difficulties could ensue in the short term.

Sixth Commission report to the Council on the situation in world shipbuilding [COM (2002) 622 final – Not published in the Official Journal].

Following the breakdown of two rounds of talks conducted by the Commission (26-27 August 2002 in Seoul and 24-27 September 2002 in Brussels) the Commission had no choice but to initiate proceedings with the World Trade Organisation (WTO) and to start bilateral consultations with the Republic of Korea. At the same time a temporary defensive mechanism was authorised for certain market segments and for a limited period only.

The crisis in world shipbuilding is deepening with very slow order intake in the major shipbuilding regions in the first six months of 2002. The main reasons are past over-supply, slowing economies around the world and the effects of 11 September. Only Japanese yards still manage to fill building slots. However, this is helped a lot by domestic demand, in particular for bulk carriers, as has been long-standing practice in this region.

World-wide ordering of new ships in the first half of 2002 was down by almost two thirds compared to average quarterly figures in 2000, which was admittedly the best year ever for shipbuilding. In the EU the situation is even worse, with ordering down by almost 80% compared to 2000. Prices for new ships have declined further and are now at the lowest level for more than a decade. Yards in South Korea have further lowered offer prices despite increases in all major cost factors, and a number of Korean yards may find it difficult to meet their financial obligations if order intake is not increased soon.

Fifth Commission report to the Council on the situation in world shipbuilding [COM (2002) 205 final – Not published in the Official Journal].

The world shipbuilding market continues to face serious difficulties due to a substantial imbalance of supply and demand. Past expansion of shipyards, mainly in Korea, but now increasingly also in China, has led to price depression. Thanks to a historically high level of ordering in 2000, prices recovered to some extent, but the significant drop in orders in 2001 has led to a new reduction in prices. The year 2001 has been very problematic for the maritime industries worldwide: the recession in the United States and the terrorist attacks of 11 September have reduced the demand for sea trade and cruises respectively. The decline in ordering affected the container ship and cruise ship sectors most, leading to a drop in overall market shares for Korea and the EU, which are particularly strong in these segments.

The detailed cost investigations undertaken by the Commission show that certain Korean yards continue to price ships below cost while others are trying to improve their bottom line. Despite various rounds of talks with Korea, the Commission did not manage to convince the Korean authorities and yards to fully implement market principles and allow a shake-out of non-viable companies. An improvement in the market situation is therefore unlikely and the Commission has consequently proposed counter-measures to the Council, including preparing the ground for requesting a dispute settlement at the World Trade Organisation and the introduction of a temporary defensive mechanism for shipbuilding.

Fourth Commission report to the Council on the situation in world shipbuilding [COM (2001) 219 final – Not published in the Official Journal].

The year 2000 has seen a significant expansion in orders for new ships. Nearly 56% more orders were placed as compared to 1999, primarily benefiting South Korean shipyards, which have seen their market share increase again. EU yards also benefited considerably from the higher demand for ships, although orders for cruise ships probably played a dominant role here. In 2000 South Korea has consolidated its dominant position on the world shipbuilding market, accounting for more than 35 % of all tonnage ordered worldwide. If cruise ship orders are included, the market share for the EU and Norway is around 18 % (in cgt). However, if they are excluded from the overall figures, the market share of EU yards for new orders in 2000 is below 10 %. In 2000 prices for new ships are reported to have recovered in certain market segments from the very low levels seen after the Asian crisis in 1997.

Third Commission report on the situation in world shipbuilding [COM (2000) 730 final – Not published in the Official Journal].

In this report the Commission confirms the general trend highlighted in the second report of 18 May 2000, namely that, despite increased orders, ship prices have not on the whole recovered the ground lost since 1997. Prices continue to be depressed owing to the very low offer prices from yards in South Korea, which is now the biggest shipbuilding country in the world. Over the first eight months of 2000, its shipyards took more than 40% of all new orders. The Commission considers the stagnation in prices to be all the more alarming in that the European Union has drastically cut back state aid to shipbuilding. Despite the signing of the Agreed Minutes in June 2000 aimed at obtaining from South Korea firm commitments on non-intervention in the financing of shipbuilding, bilateral talks ended in failure. The Commission thus plans to:

  • continue its monitoring of the market situation;
  • examine the European industry’s complaint of October 2000 against Korean dumping, in order to deal with this problem under WTO rules;
  • remain open, at the same time, to any Korean proposals;
  • continue efforts to re-establish fair competition at international level;
  • encourage the International Monetary Fund to ensure that the restructuring of Korean shipyards is closely monitored;
  • continue to cooperate with the industry on competitiveness issues;
  • examine with the Council any possible action to address the problem.

Second Commission report on the situation in world shipbuilding [COM (2000) 263 final – Not published in the Official Journal].

The report takes stock of the world shipbuilding market. The market is in crisis, with supply outstripping demand. Vessel prices are falling in the face of unbeatable competition from Korean yards, which are prepared to sell at a loss in order to ensure market share and cash flow. To address the problem, the European Commission obtained an agreement from the Korean authorities to restrict State financial intervention in the shipbuilding industry. The Commission also gathered evidence pointing to unfair competition, and a complaint may be filed under the Trade Barriers Regulation.

First Commission report on the situation in world shipbuilding [COM (1999) 474 final – Not published in the Official Journal].

The report describes overcapacity on the shipbuilding market, with a marked imbalance between supply and demand caused mainly by South Korea’s increased capacity. Vessel prices were between 15 and 30% down on 1998 levels, stimulating demand and increasing the Korean yards’ market share. There were reasons to believe that Korean yards were offering vessels at below-retail rates.

Council Regulation (EC) No 1177/2002 of 27 June 2002 concerning a temporary defensive mechanism to shipbuilding [Official Journal No L 172 of 2.7.2002].

The commitments contained in the Agreed Minutes signed by the European Commission and the Government of the Republic of Korea on 22 June 2000 with a view to ensuring an effective price surveillance mechanism have not been effectively implemented by the Korean side and therefore a satisfactory result has not been obtained.

Consequently, despite the ban imposed by Council Regulation (EC) No 1540/98, the 2002 Regulation introduces a temporary defensive mechanism applicable to certain segments of the market (namely container ships and product and chemical tankers) for a short and limited period authorising support of 6% of contract value before aid. The aim is to enable Community shipyards to overcome unfair Korean competition. This Regulation expires on 31 March 2004.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.


Another Normative about State aid to shipbuilding

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic

Competition > Rules applicable to specific sectors > Competition in transport

State aid to shipbuilding (II)

To remove the differences between the rules applicable to the shipbuilding industry and to those applicable to other industrial sectors.

2) Document or Iniciative

Framework on state aid to shipbuilding [Official Journal C 317 of 30.12.2003].

3) Summary

Background

Since the early 1970s, state aid to shipbuilding has been subject to a series of specific Community regimes. This framework, which replaces Council Regulation (EC) No 1540/98, is designed to remove the differences between the rules applicable to the shipbuilding industry and those applicable to other industrial sectors. However, it takes account of specific factors affecting the shipbuilding sector, namely:

  • the nature of the world shipbuilding market (overcapacity, depressed prices, etc.);
  • the nature of ships as very large capital goods in respect of credit facilities;
  • the difficulty of applying the World Trade Organisation (WTO) rules on unfair trading practices to the shipbuilding sector;
  • the existence of agreements within the Organisation for Economic coordination and development (OECD) in the shipbuilding sector; this mainly concerns the 1994 Agreement on respecting normal competitive conditions in the shipbuilding and repair industry, which has not entered into force and which the OECD is in the process of replacing.

Definitions

For the purposes of this Framework, the following definitions shall apply:

  • shipbuilding: the building of self-propelled seagoing commercial vessels;
  • ship repair: the repair or reconditioning of self-propelled seagoing commercial vessels;
  • ship conversion: the conversion of self-propelled seagoing commercial vessels of not less than 1 000 gt, on condition that conversion operations entail radical alterations to the cargo plan, the shell, the propulsion system or the passenger accommodation;
  • self-propelled seagoing commercial vessels, including:

– vessels of not less than 100 gt used for the transportation of passengers and/or goods;
– vessels of not less than 100 gt for the performance of a specialised service (for example, dredgers and ice breakers);
– tugs of not less than 365 kW;
– fishing vessels of not less than 100 gt;
– unfinished shells of vessels.

Scope

Aid to shipbuilding includes aid to any shipyard, related entity, shipowner or third party which is granted, whether directly or indirectly, for the building, repair or conversion of ships.

The Framework provides for special measures in relation to investment aid for innovation, closure aid, export credits, development aid and regional aid.

Research, development and innovation aid

Aid granted to defray expenditure by shipbuilding, ship repair or ship conversion firms on R&D projects may be considered compatible with the common market if it complies with the rules laid down in the Community framework for state aid for research and development.

Aid granted for innovation in existing shipbuilding, ship repair or ship conversion yards may be deemed compatible with the common market up to a maximum aid intensity of 20% gross, provided that it contributes to the search for innovative products and processes.

Closure aid

Aid to defray the 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.

The costs eligible for aid are:

  • payments to workers made redundant or retired before the legal retirement age;
  • the costs of counselling services to workers made or to be made redundant or retired;
  • payments to workers for vocational retraining;
  • expenditure incurred for the redevelopment of the yard, its buildings, installations and infrastructure for use other than shipbuilding.

Companies receiving partial closure aid must not have benefited from rescue and restructuring aid in the past ten years. For further information, see the Community guidelines on state aid for rescuing and restructuring firms in difficulty.

Employment aid

Aid granted for the creation of employment, the recruitment of disadvantaged and disabled workers or to cover the additional costs of employing disadvantaged and disabled workers in shipbuilding, ship repair or ship conversion firms may be considered compatible if it complies with the substantive rules laid down in Commission Regulation (EC) No 2204/2002.

Development aid and export credits

Aid to shipbuilding in the form of development aid or export credits may be considered compatible with the common market if it complies with the terms of the 1998 OECD Arrangement on Guidelines for Officially Supported Export Credits and with its Sector Understanding on Export Credits for Ships.

Regional aid

Regional aid to shipbuilding, ship repair or ship conversion may be considered compatible with the common market on condition that it fulfils the following conditions:

  • aid must be granted for investment in upgrading or modernising installations with a view to improving productivity and must not be linked to financial restructuring of the yards concerned;
  • in the regions referred to in Article 87(3)(a) of the EC Treaty and in compliance with the regional aid map, the intensity of the aid must not exceed 22.5%;
  • in the regions referred to in Article 87(3)(c) of the EC Treaty and in compliance with the regional aid map, the intensity of the aid must not exceed 12.5 % or the applicable regional aid ceiling, whichever is the lower.

Aid must cover eligible expenditure as defined in the Community guidelines on regional aid.

Member States are required to submit annual reports to the Commission on all existing aid schemes. This Framework will be applicable from 1 January 2004 until 31 December 2006 at the latest. It may be reviewed by the Commission during this period, in particular in the light of the Community’s international obligations.

4) Implementing Measures

5) Follow-Up Work

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Strategy for cooperation with Bangladesh

Strategy for cooperation with Bangladesh

Outline of the Community (European Union) legislation about Strategy for cooperation with Bangladesh

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with Bangladesh (2007-2013)

Document or Iniciative

The European Commission – Bangladesh Strategy Paper 2007-2013 .

Summary

Following the adoption of a new partnership agreement in 2001, the European Union (EU) and Bangladesh are cooperating in many areas. Primarily, EU intervention should support the country in reducing poverty and meeting the Millennium Development Goals (MDGs).

All cooperation projects must incorporate the objectives of protecting gender equality, rural development, food safety, environmental protection and good public governance.

Short-term priorities

This strategy aims at establishing a balance between social development and economic development. The partners therefore identify priority areas for action:

  • human and social development, through programmes to promote health, nutrition, access to education, decent work and the fight against poverty;
  • good governance, particularly as regards the management of public finances, the judicial system and the effectiveness of the State;
  • the protection of human rights, mainly to improve respect for the rights of women and children, but also of minority groups such as refugees and the disabled;
  • economic and trade development, to enable the country to be integrated into the global trade system, to increase the competitiveness of enterprises and the diversification of economic production.

Long-term priorities

During the second phase of implementation of the strategy, a series of actions are to be carried out in the areas of:

  • the environment and disaster management, the consequences of which mainly affect the poorest people;
  • food security and nutrition, so as to permanently reduce malnutrition rates, particularly in rural areas.

State aid for public service broadcasting

State aid for public service broadcasting

Outline of the Community (European Union) legislation about State aid for public service broadcasting

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Audiovisual and media

State aid for public service broadcasting

Document or Iniciative

Communication from the Commission on the application of State aid rules to public service broadcasting [Official Journal C 257 of 27.10.2009].

Summary

Since the 2001 Communication from the Commission on the application of state aid rules to public broadcasting, technological changes have significantly changed the broadcasting and audiovisual markets, including an increase in competition with new players entering the market as well as the availability of new media services. In order to compete, both public and private broadcasters have had to diversify their activities, moving to new distribution platforms and expanding the range of their services. This diversification of the publicly funded activities of public service broadcasters has resulted in a number of complaints by other market players. There have also been significant legal developments since the 2001 Communication, with the introduction of the Audiovisual Media Services Directive which extends the scope of the European Union (EU) audiovisual regulation to emerging media services. Due to these technological, market and legal developments, an update to the 2001 Communication on state aid for public broadcasting is necessary.

The assessment of state aid in the EU is based on Articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU) (ex-Articles 87 and 88 of the Treaty establishing the European Community (TEC)). In accordance with Article 107 TFEU, state aid includes the following conditions:

  • aid must be granted by an EU country, or by means of state resources;
  • it must distort or threaten to distort competition by favouring the beneficiary;
  • it must be liable to affect trade between EU countries.

Article 106(2) TFEU (ex-Article 86(2) TEC) provides a derogation from the ban on state aid for undertakings operating a service of general economic interest. To benefit from this exemption, the following conditions apply:

  • the service in question is clearly defined as a service of general economic interest by the EU county concerned;
  • the undertaking in question must be explicitly entrusted by the EU country with the provision of that service;
  • the ban on state aid must obstruct the performance of the particular tasks assigned to the undertaking and the exemption from the ban must not affect the development of trade to an extent that would be contrary to EU interests.

For public broadcasting the above must be adapted in accordance with the Amsterdam Protocol which:

  • states that the public service remit is conferred, defined and organised by each EU country;
  • provides for a derogation for funding granted to broadcasting organisations for the fulfilment of the public service remit so long as it does not affect trading conditions and competition in the EU to an extent that would be contrary to EU interests.

The state aid assessment by the Commission requires transparency. This consists of a precise definition of the public service remit. The undertaking carrying out this service must be clearly entrusted with that task. The public service compensation should not exceed the net costs of the public service. EU countries should ensure regular supervision of the use of public funding and the carrying out of the public service mandate.

In relation to the diversification of public broadcasting services, the Commission considers that public service broadcasters should be able to take advantage of the opportunities offered by digitisation and internet-based services to benefit society by offering services on all platforms, provided that it does not distort competition or disproportionately affect the market. However, EU countries must consider whether significant new audiovisual services envisaged by public service broadcasters fulfil the conditions of the Amsterdam Protocol in serving the democratic, social and cultural needs of the society, without having disproportionate effects on trading conditions and competition. EU countries must determine what qualifies as a significant new service.

The rapid evolution of the broadcasting markets means that broadcasters are turning to new sources of financing, such as online advertising or the provision of services for payment. Whilst traditionally public broadcasting services are free-to-air, the Commission considers that a direct remuneration in such services does not necessarily mean that the services are not part of the public service remit. The communication states that as long as the pay element does not compromise the benefit to society which distinguishes public services from purely commercial activities.

Strategy for cooperation with China

Strategy for cooperation with China

Outline of the Community (European Union) legislation about Strategy for cooperation with China

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with China (2007-2013)

Document or Iniciative

European Commission – China Strategy Paper 2007-2013 .

Summary

Relations between the European Union (EU) and China have progressed towards a strategic partnership. This cooperation, which developed on the basis of a Trade and Economic Cooperation Agreement, now covers a large number of sectors thanks to the establishment of a stronger partnership.

This cooperation programme is an important element of that relationship.

Political dialogue

The partners are continuing to develop their ties through regular political dialogue, particularly in the areas of:

  • climate change and energy;
  • legal and illegal immigration;
  • human rights;
  • trade in goods and services, and market access;
  • the European arms embargo;
  • cooperation on foreign and security policy, with particular attention to conflict prevention and combating weapons of mass destruction;
  • justice, freedom and security, focusing on combating terrorism, organised crime, trafficking of human beings, drugs, and the trafficking of small arms and light weapons.

The political dialogue also serves as a framework for the negotiation of a Partnership and Co-operation Agreement (PCA).

Cooperation priorities

In the area of trade, the partnership supports trade liberalisation and China’s commitments in accordance with the rules of the World Trade Organisation (WTO). China’s significance in international trade is such that the country must demonstrate its ability to respect fair and equitable conditions of competition. Similarly, the EU supports the restructuring of the financial services sector in view of the increase in trade in services.

Cooperation in the area of civilian aviation should help to improve aviation safety and security, considering the rapid development of the aviation market and the country’s position as a transit hub within Asia. Action to provide regulatory technical assistance is in place, as are research projects, including for the development of green air transport.

China must reduce the negative social impact of its economic reforms in order to increase its social and territorial cohesion. This should be done through policies at regional level, employment and decent work, social security and health. The partners may therefore exchange experience in particular areas such as the labour market, social exclusion and pensions.

Similarly, cooperation must be increased in the education and training sector, for the development of student and professional exchange programmes, particularly in the field of science.

Finally, the partners must combine their efforts to combat climate change, to develop legal and economic instruments for environmental protection and to ensure the sustainable management of energy and water resources.

Strategy for cooperation with the Philippines

Strategy for cooperation with the Philippines

Outline of the Community (European Union) legislation about Strategy for cooperation with the Philippines

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with the Philippines (2007-2013)

Document or Iniciative

The European Commission – Philippines Strategy Paper 2007-2013 .

Summary

The partnership between the European Union (EU) and the Philippines is focused on reducing poverty and the equitable distribution of wealth. Although the country has reached an intermediate level of development, a large proportion of its population lives below the poverty threshold. This situation is partly explained by a high level of demographic growth and a low level of economic growth.

Areas for cooperation

This Strategy should be implemented according to priority actions in order to:

  • develop a policy to reduce poverty and meet the Millennium Development Goals (MDGs);
  • promote economic reforms and good public governance;
  • organise basic social services, in particular to improve access to health care and education.

Furthermore, the partnership should stimulate trade and investment, and reinforce the positive impact of commercial growth on the country’s level of development.

Cross-cutting issues

Generally, cooperation actions should improve governance and human rights, gender equality, the rights of children and minorities, as well as the protection of the environment, conflict prevention and the stability of the country.

Thematic regional programmes

The Philippines participate in several regional cooperation schemes, such as the Association of South-East Asian Nations (ASEAN), Asia-Pacific Economic Cooperation (APEC) and the Asia-Europe Meeting (ASEM) for policy dialogue.

These bodies provide a framework for cooperation and dialogue as regards democracy and human rights, migration, the environment, social policy and exchanges between universities.

Strategy for cooperation with Indonesia

Strategy for cooperation with Indonesia

Outline of the Community (European Union) legislation about Strategy for cooperation with Indonesia

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with Indonesia (2007-2013)

Document or Iniciative

The European Commission – Indonesia Strategy Paper 2007-2013 .

Summary

Indonesia has undertaken a process of political and economic stabilisation supported by the European Union (EU). This cooperation strategy also supports the achievement of the Millennium Development Goals (MDGs), which remain a priority for a country where the majority of the population lives in poverty.

Priorities for cooperation

Education and vocational training are priority areas of action. EU intervention should contribute to improving basic education systems, vocational training and higher education. The partners’ aim is to increase the level of education and adapt teaching to the needs of sustainable development.

The EU supports the programme of trade and investment reforms, to accelerate the economic performance of the country and allow it to join the international trade system. The social and environmental impact of these reforms must be controlled. They are contributing to the development of a free trade zone between the EU and the Association of South-East Asian Nations (ASEAN) countries.

In addition, the operation of the judicial and law enforcement system should be strengthened. To this end, cooperation actions support institutional reforms, good public governance, human rights, the fight against corruption and the fight against organised crime. The role of civil society should be particularly encouraged when carrying out reforms.

Beyond these priorities, the partners put in place a series of thematic actions, in particular for democracy and human rights, support for civil society, food security, asylum policy and migration.

General areas of cooperation

Certain areas must be included in a cross-cutting way within the actions that have been planned by the partnership, such as:

  • protection of the environment, particularly to combat illegal logging;
  • conflict prevention and post-conflict recovery for certain regions;
  • gender equality, including in democratic life;
  • governance, transparency and the management of public finances;
  • human rights and the protection of indigenous people;
  • combating HIV/AIDS;
  • controlling the impact of globalisation on social cohesion and promoting decent work.

Strategy for cooperation with Thailand

Strategy for cooperation with Thailand

Outline of the Community (European Union) legislation about Strategy for cooperation with Thailand

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with Thailand (2007-2013)

Document or Iniciative

The European Commission – Thailand Strategy Paper 2007-2013 .

Summary

The partnership put in place between the European Union (EU) and Thailand is intended to facilitate policy and trade dialogue and knowledge sharing. The cooperation priorities presented by the Commission therefore take into account improvements in the socio-economic development of the country.

Strategic cooperation areas

Economic cooperation activities are at the heart of the partnership. The EU therefore supports public reforms in economic areas, improvements to the legal environment for enterprise and investment, and the increase in commercial competitiveness of the country at regional and global levels.

Similarly, planned measures aim at facilitating customs cooperation and adapting rules and technical standards applicable to goods that are to be imported into the EU.

The partners also intend to strengthen their relations in the area of science and technology, higher education and research. Their activities should facilitate the sharing of information, know-how and good practices, as well as strengthening capacities and resources in the sector of research.

Lastly, cooperation should foster dialogue and the sharing of knowledge in the areas of social policy, protection of the environment, good governance, human rights and mine action.

Policy dialogue

A series of themes are to be covered as part of the policy dialogue:

  • the promotion of democracy and human rights;
  • social and human development, particularly as regards health, culture, education and training;
  • immigration and asylum policy, the fight against human trafficking and the protection of displaced persons;
  • the environment and the sustainable management of natural resources;
  • the development of civil society.

Cross-cutting issues

Cooperation actions undertaken must take into account:

  • gender equality and the position of women in the economy;
  • the impact of global trade at social level and the promotion of decent work;
  • management of natural resources, including energy;
  • good governance in public affairs and the promotion of human rights.

Context

The partners’ relations should be intensified through the conclusion of a Partnership and Cooperation Agreement (PCA). The negotiations, initiated in 2007, deal particularly with the priorities defined in this Strategy Paper.

Strategy for cooperation with Vietnam

Strategy for cooperation with Vietnam

Outline of the Community (European Union) legislation about Strategy for cooperation with Vietnam

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Strategy for cooperation with Vietnam (2007-2013)

Document or Iniciative

The European Commission – Vietnam Strategy Paper 2007-2013 .

Summary

Cooperation between the European Union (EU) and Vietnam aims primarily to reduce the level of poverty in the country. This aim is pursued in line with Vietnam’s socio-economic development plan and the Millennium Development Goals (MDGs).

Cooperation priorities

This strategy identifies a limited number of areas for cooperation, in order to enhance the effectiveness of development aid. Cooperation actions are mainly financed through the instrument for development cooperation (DCI). They are aimed at supporting:

  • socio-economic development, particularly the reform of public policies and the increase of financial resources, including by mobilising international donors;
  • the health sector, especially to improve access to care, the development of infrastructure and to extend the coverage of social protection to the whole population.

Furthermore, the EU supports the development of trade with Vietnam, to help the country to maximise its international trade development and exploit its membership of the World Trade Organization (WTO). Cooperation should contribute to the development of trade policies, and the legal framework applicable to workers, enterprises, investment and exports.

The increase in trade should have a positive impact on reducing poverty and the sustainable development of the country.

Policy dialogue

The partners are undertaking a strategic dialogue, in particular with a view to strengthening public institutions, public administration, good governance and human rights.

In addition, a set of thematic objectives supplements these priorities. They can be implemented through the European Instrument for Stability. The objectives are as follows:

  • democracy and human rights;
  • the development of civil society;
  • migration and asylum policy;
  • human and social development;
  • environmental protection and sustainable resource management;
  • higher education.

Cross-cutting issues

Cooperation actions should have a positive impact on gender equality, the fight against HIV/AIDS, environmental protection, democracy, good governance and human rights.

Context

In 2007, Vietnam and the EU launched negotiations with a view to intensifying their relations by adopting a Partnership and Cooperation Agreement.

State aid in the agriculture sector

State aid in the agriculture sector

Outline of the Community (European Union) legislation about State aid in the agriculture sector

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

State aid in the agriculture sector

Document or Iniciative

Community guidelines for state aid in the agriculture and forestry sector 2007-13 [Official Journal C 319 of 27.12.2006].

Summary

The guidelines cover state aid in the agriculture and forestry sector for the period 2007-13 and replace the previous guidelines (2000-06) established for agriculture.

These guidelines apply to state aid granted for the production, processing and marketing of agricultural products. Annex I of the Treaty on the Functioning of the European Union (TFEU) provides a detailed list of the agricultural products included. They do not apply to the fisheries and aquaculture sector but, unlike the previous ones (2000-06), are applicable for aid for some forestry activities.

European Union (EU) countries are still obliged to notify the Commission of state aid for certain Annex I products that are not covered by a common market organisation (CMO), but the Commission may only make observations on the aid schemes. EU countries are invited to take on board these observations to avoid the risk of infringement procedures.

State aid is categorised in the guidelines as follows:

  • rural development measures;
  • aid for risk and crisis management;
  • other types of aid;
  • aid for the forestry sector.

RURAL DEVELOPMENT MEASURES

In line with Regulation (EC) No 1698/2005, which regulates EU support for rural development (the second pillar of the Common Agricultural Policy (CAP)), the guidelines set out the rules governing state aid for rural development measures or other closely related measures.

Aid may be authorised for investment in agricultural holdings in the following cases:

  • aid for investment in agricultural holdings proper;
  • aid for the conservation of traditional landscapes and buildings;
  • aid to relocate farm buildings where this is done in the public interest;
  • aid for necessary investment to improve the environment, hygiene conditions and animal welfare;
  • aid for additional costs due to investment made in EU countries to implement Directive 91/676/EEC;
  • aid for investment in compliance with applicable EU or national rules (only for additional costs incurred by young farmers to implement the rules within 36 months of their establishment).

Aid for investment in connection with the processing and marketing of agricultural products is authorised where it meets the conditions laid down in one of the following provisions:

  • Commission Regulation (EC) No 800/2008;
  • the Commission guidelines on national regional aid for 2007–13.

Environmental and animal welfare aid must meet the general objectives of EU environmental policy. This consists of the precautionary principle and the principles that preventive action should be taken, that as a priority environmental damage should be rectified at source and that the polluter should pay.

Aid to compensate for handicaps in certain areas must contribute to maintaining land use for agriculture, conserving rural areas and maintaining and promoting sustainable farming systems. To qualify for this aid, EU countries must demonstrate the handicaps in question and provide proof that the amount of aid avoids any overcompensation of these handicaps. The level of compensatory payments must be proportionate to the economic impact of the handicaps. Only the economic impact of permanent handicaps that lie outside human control may be taken into account for calculating the amount of compensatory payments.

Aid for meeting standards is designed to cover part of the costs incurred and loss of income as a result of applying standards in the fields of environmental protection, public health, animal and plant health, animal welfare and occupational safety.

Aid for the setting up of young farmers is for persons under 40 years of age who are setting up an agricultural holding for the first time as farm manager. Eligible beneficiaries may also submit a plan to develop their agricultural activities.

Aid for early retirement or for the cessation of farming activities is authorised subject to the conditions for permanent and definitive cessation of commercial farming activities.

Aid for producer groups aims to encourage the establishment of producer groups to concentrate their supply and adapt their production to market requirements. This aid is limited to small and medium-sized enterprises (SMEs). Eligible expenditure includes: rental of suitable premises, purchase of office equipment, including computer hardware and software, administrative costs (including staff), overheads and other expenses.

Aid for land reparcelling aims to support the exchange of plots of agricultural land and to facilitate the establishment of economically viable holdings. Aid may only be granted to cover the legal and administrative expenses involved in reparcelling up to 100 % of actual expenditure incurred.

Aid to encourage the production and marketing of quality agricultural products aims to improve the quality of agricultural products and to encourage farmers to participate in food quality schemes.

Under technical support in the agricultural sector, aid may be granted for the following measures:

  • education and training provided to farmers and agricultural workers;
  • replacement services to cover farmers’ absence due to holiday or sickness;
  • consultancy services provided by third parties;
  • organisation of forums to pool knowledge between enterprises and organisation of and participation in competitions, exhibitions or fairs;
  • publication of factual or scientific data;
  • publications.

Aid in the livestock sector targets support for the maintenance and improvement of the genetic quality of EU livestock.

Aid for the outermost regions and the Aegean islands aimed at meeting the needs of these regions will be examined by the Commission on a case by case basis, in accordance with the specific legal provisions applying to these regions, and with regard to the compatibility of the measures concerned with rural development programmes for the regions concerned.

RISK AND CRISIS MANAGEMENT

State aid may be granted to manage crises in the sector of primary agricultural production. However, distortions of competition must be avoided as far as possible. Requiring a minimum contribution from producers to losses or the cost of such measures provides an incentive for minimising risk. The following risk and crisis management measures are eligible for state aid:

  • aid to compensate for damage to agricultural production or the means of agricultural production;
  • aid regarding TSE (transmissible spongiform encephalopathies) and fallen stock;
  • aid towards the payment of insurance premiums;
  • aid for closing production, processing and marketing capacity.

Aid for rescuing and restructuring firms in difficulty will be assessed in accordance with the applicable EU guidelines on state aid for rescuing and restructuring firms in difficulty.

OTHER TYPES OF AID

Regulation (EC) No 800/2008 provides certain conditions under which aid for employment and aid for research and development are authorised.

There are horizontal aid instruments applicable to the agriculture sector. State aid for the agriculture sector is also covered by more general rules on the compatibility of aid with the TFEU, such as training aid (which is also covered by Regulation (EC) No 800/2008), state aid in connection with investment capital, state aid in the form of guarantees and state aid in the form of public service compensation.

Aid for advertising agricultural products may be authorised if the advertising campaign is centred on quality products – recognised EU designations (such as registered designation of origin – protected designation of origin (PDO) and protected geographical indication (PGI)) or for national or regional quality labels. Advertising campaigns must not be dedicated directly to the products of one or more particular company or companies.

Aid linked to tax exemptions under Directive 2003/96/EC may be granted by applying reduced or zero rates of taxation, provided that no differentiation is made in the agricultural sector. This covers products used as fuel for primary agricultural production or energy and electricity products used for primary agricultural production.

Aid in the form of subsidised short-term loans is no longer authorised.

AID FOR THE FORESTRY SECTOR

Up to now there have not been any specific EU rules governing state aid for the forestry sector. Aid could be granted under EU general rules for all sectors or under certain specific regulations. In the interests of transparency, the Commission has therefore sought to more clearly define EU policy on state aid for the forestry sector. However, the guidelines apply only to living trees and their natural environment in forests and other wooded land. They do not apply to state aid for forest-based industries, timber transport, wood processing or other forestry resources used as products or for the purpose of energy generation.

Aid in the forestry sector is authorised for the following purposes:

  • to contribute directly towards maintaining and enhancing the ecological, protective and recreational functions of forests, local biodiversity and a healthy forest ecosystem;
  • afforestation of agricultural and non-agricultural land, establishment of agri-forestry systems on agricultural land, Natura 2000 payments, payments for the forestry environment, restoring forest potential, introducing prevention systems, and non-productive investments;
  • to cover additional costs and loss of revenue linked to using more demanding environmentally friendly forestry techniques than those imposed by the rules, if the owners concerned undertake voluntarily to use these techniques and this commitment meets certain conditions;
  • to purchase forestry land, provided that the intensity of aid is within the limits set for aid for investment in agricultural holdings;
  • training for forestry owners and workers and for consultancy services provided by third parties;
  • setting up forestry associations;
  • support for initiatives to spread new techniques, pilot or demonstration projects under the conditions laid down in the chapter on technical assistance in the agricultural sector in the guidelines.

PROCEDURES

All new aid schemes and all new aid must be notified to the Commission before they are implemented, unless the aid is covered by one of the exemption regulations adopted by the Commission. In contrast to the guidelines for 2000-06, only aid schemes of limited duration are now authorised, with the maximum duration being seven years. These new guidelines apply from 1 January 2007.

EU countries must submit annual reports and the Commission reserves the right to request additional information.

These guidelines apply until 31 December 2013. However, the Commission reserves the right to amend them in the light of important considerations of competition policy, agricultural policy, human and animal health or in order to take account of other EU policies or international commitments.

BACKGROUND

The new guidelines form part of the 2003 reform of the CAP, which confirms the importance of rural development and shows the Commission’s concern to make aid granted by EU countries in the agriculture sector more coherent. The guidelines for the period 2007-13 are based on Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development, and in particular Articles 88 and 89 thereof, which contain specific provisions regarding state aid.

Strengthening administrative and judicial capacity

Strengthening administrative and judicial capacity

Outline of the Community (European Union) legislation about Strengthening administrative and judicial capacity

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enlargement > Enlargement 2004 and 2007

Strengthening administrative and judicial capacity

1) Objective

To assess progress on implementing the action plans for reinforcing candidate countries’ administrative and judicial capacity and to review fulfilment of the commitments made in the accession negotiations.

2) Document or Iniciative

Commission Communication of 5 June 2002 on the Action Plans for administrative and judicial capacity, and the monitoring of commitments made by the negotiating countries in the accession negotiations [COM (2002) 256 final – not published in the Official Journal]

3) Summary

The existence of adequate administrative and judicial capacity in the candidate countries is essential if they are to be able to implement and enforce the acquis from the time of accession. Such capacity is also a key factor for the success of the enlargement process.

The European Commission has been monitoring candidate countries’ administrative and judicial capacity since 1997. In its 2001 enlargement strategy paper, it undertook to launch action plans for reinforcing the capacity of each country taking part in the accession negotiations. Implementation of these plans has been under way since early 2002. The Communication assesses the work that has been completed on this front and the progress achieved in implementing commitments made in the accession negotiations.

In 2002, the plans are supported by special financial assistance of 250 million. Since administrative and judicial capacity has to be adapted to the evolving requirements of the acquis, a process that will continue after accession, the Commission proposes to maintain this assistance via a transition facility amounting to a total of 380 million. It will cover actions not eligible for the Structural Funds.

The action plans

The Accession Partnerships have served as the point of departure for the action plans for reinforcing administrative and judicial capacity. All priorities from the Partnerships that are related to the strengthening of this capacity have been included in the actions plans.

The action plans bring together for each priority:

  • the commitments made in the accession negotiations;
  • the implementing measures envisaged;
  • the Community assistance that is already under way or planned, and any supplementary assistance that will be provided for institution building under the Phare programme;
  • the monitoring activities required to assess each country’s preparation.

The following issues are covered in the action plans:

  • issues relating to the political Copenhagen criteria: strengthening of the public administration, reform of the judicial system, development of an anti-corruption capacity, respect for human rights and the protection of minorities;
  • issues relating to the Copenhagen economic criteria: development of land markets and land property registers, compliance with bankruptcy legislation, development of a favourable business environment, reform of the financial sector, and reform of the public finance management system;
  • issues relating to the smooth functioning of the internal market: compliance with the competition rules, reinforcing transport structures, reinforcing the capacity of tax and customs administrations, and establishing or reinforcing regulatory authorities in the areas of transport, energy, telecommunications, postal services and broadcasting;
  • issues relating to ensuring sustainable living conditions: strengthening the structures for the management of the common agricultural policy, reinforcing administrative structures in the fisheries field, setting up bodies to manage the Structural Funds and Cohesion Fund, strengthening the capacity to monitor and enforce environmental legislation, transport safety, nuclear safety and enforcing occupational health and safety rules;
  • issues relating to the protection of citizens: strengthening the judicial system, fighting corruption, developing the capacity to implement the justice and home affairs acquis, upgrading food processing establishments and inspections relating to food safety;
  • issues relating to the proper management of Community funds: strengthening structures for public financial control, and strengthening statistical capacities.

Enhanced monitoring

The action plans are accompanied by enhanced monitoring of negotiating countries’ commitments made in the accession negotiations. The reports on the progress towards accession by each country, published every year by the Commission, are complemented by monitoring activities included in the action plans (such as peer review).

This enhanced monitoring process has shown that most of the commitments made by the candidate countries are being met in accordance with the agreed timetables. However, further efforts are needed in certain areas. The Communication takes stock of progress on the various negotiating chapters, indicating whether they have been provisionally closed and with which country, and where transitional periods have been granted. Food safety and the management of Community funds are mentioned as still requiring particular attention.

4) Implementing Measures

5) Follow-Up Work

This summary is for information only and is not designed to interpret or replace the reference document.