Secondly, the Norwegian Government requests that the definition of non-severable be included in the GBER.

Transcription

1 European Commission Directorate-General for Competition State Aid Registry 1049 Brussels Belgium Your ref Our ref Date HT / HT SAM GBER Review Comments from the Norwegian Government The Norwegian Ministry of Trade, Industry and Fisheries has the overall responsibility for the sector crossing instruments in the Norwegian Government s competition policy, and coordinates comments from the Norwegian central administration in State Aid regulatory processes at the European Commission (hereinafter the Commission ) and the EFTA Surveillance Authority. The Norwegian Government refers to the public consultation on the second draft of the new General Block Exemption Regulation on State Aid measures (hereinafter the GBER ). On a general note, the Norwegian Government welcomes the amendments made to the new draft. The Norwegian Government is also positive to the comprehensive nature of the draft GBER. Nevertheless, the Norwegian Government would like to comment on a few issues. General issues Firstly, the Norwegian Government would like to voice its opinion that EU funding should be subject to the same state aid rules as aid granted by the Member States. For undertakings, the effect on competition is the same regardless of whether the aid is granted by the EU or by the Member States. Furthermore, some undertakings and countries may have easier access to EU funding than others. Thus, exempting EU funding from the state aid rules is contrary to the objective of the Internal Market. Secondly, the Norwegian Government requests that the definition of non-severable be included in the GBER. Postal address Office address Telephone* <engelsk navn> Our officer PO Box 8090 Dep Akersgata Silje Thorstensen 0032 Oslo Vat no postmottak@nfd.dep.no

2 Preamble - Paragraph 49 It is the Norwegian Government s understanding that a research infrastructure may fall outside the state aid rules in its entirety when the capacity allocated each year to economic activity does not exceed 15 per cent of the research infrastructure's overall annual capacity. The Norwegian Government also interprets this paragraph to imply that the investment costs related to economic activities are determined based on the share of the annual capacity used in economic activities. In our opinion, there is a need for clarification regarding how the overall annual capacity should be calculated. Is it for example in terms of operating hours, and if so, on a 24/7/365 basis? There are infrastructures where the capacity cannot be measured in terms of time, but must instead be measured in terms of, for example, amount. Data-storage is such an example. For such infrastructures, there will be other issues related to the interpretation of the annual capacity. It is difficult to foresee all possible consequences of using the annual capacity of a research infrastructure as the basis for determining the relative use of the infrastructure in economic activities and thus for determining when aid is considered to be state aid and when the maximum threshold is reached. Article 1 - Scope According to Article 1(2) (a) of the draft GBER, the GBER does not apply to aid schemes for which the planned or effective yearly public expenditure exceeds 0.01 % of national gross domestic product (GDP) for the Member State concerned for the previous calendar year, in so far as the planned or effective annual budget of the scheme in question exceeds EUR 100 million. Schemes exceeding these thresholds shall be notified. The Norwegian Government understands the importance of focusing the Commission s ex ante scrutiny on cases with the biggest impact on the Internal Market. However, large aid schemes do not automatically lead to market distortion. Large schemes typically have a large number of beneficiaries, many of which are SMEs, but not necessarily large amounts of aid granted to each beneficiary. Rather than focusing on large schemes as such, the focus should be on large amounts of aid and cumulation of aid for each beneficiary. The Norwegian Government is of the opinion that setting the threshold as proposed creates two problems. Firstly, the threshold that depends on the GDP of the Member State treats the Member States unequally. Secondly, the threshold of EUR 100 million is problematic because instead of creating several smaller aid schemes Member States should aim at creating larger, more flexible schemes. This would lessen the bureaucracy. The Norwegian Government is concerned that the proposed notification threshold of EUR 100 million may lead to a situation where aid schemes will have smaller budgets and narrower scopes in order to avoid the notification obligation. In addition, it will increase the bureaucracy and decrease the flexibility of the aid schemes and the ability to adapt to changes in the market. The Norwegian Government believes that the transparency and monitoring of aid in accordance with Articles 9 to 12 combined with the evaluation obligation as described in the Page 2

3 memo attached to the open consultation, should sufficiently ensure that the aid schemes and measures do not distort the market. Thus, the Norwegian Government proposes that this provision is modified in such way that instead of a notification obligation, all the schemes exceeding the total amount of state aid of EUR 100 million annually will be subject to the evaluation obligation. However, as there may be aid schemes which carry a higher risk of market distortion than others, it is proposed that the notification obligation is retained to cover the most distortive schemes. It is proposed that the notification obligation applies to schemes exceeding the annual total amount of state aid of EUR 100 million and having specific potentially distortive characteristics. Examples could be schemes with a small number of beneficiaries, schemes where the beneficiaries consist only or mainly of large undertakings or schemes with a relatively narrow sectoral or regional scope. Article 19 - Aid for SMEs cooperation costs linked to ETC projects The Norwegian Government is positive to the possibility to co-finance cooperation projects. As aid for general consultancy services in favour of SMEs are excluded from the new regulation, it is our opinion that granting aid to SMEs cooperation projects should be made possible in general and not just related to ETC projects. An alternative is to maintain the possibility to grant aid to general consultancy services in favour of SMEs in the new regulation. Article 20 - Risk finance aid The Norwegian Government believes there should be room for grants as an opening to convey state aid under Article 20. Both guarantees and tax incentives in essence contain grants, thus there is no reason for discriminating between different forms of aid. Norway has used grants in combination with loans and equity to successfully incentivise investors to invest in three different seed capital schemes. If the grant is capped at 25 % of the state participation, which will be less than the guarantee cap because of the requirement for private participation, this could create a fast and well-tested way to increase risk finance. When designed in a proper way, a scheme based on grant and equity could also provide uncomplicated support for risk capital investments which aligns the interests of investors and the state. The grant element in the latest Norwegian scheme, which is based on 50/50 financing between investors and the State, is structured in such a way that 15 % of the state investment is transferred to the investors, by giving them a higher ownership share. After the transfer of part of the ownership, which gives the investors maximum 57.5 % ownership, all losses and profits are shared on a pari-passu basis. The result is an uncomplicated asymmetrical profit and losssharing in line with the guiding principles of Article 20 and thus, should be allowed. Things get more complicated if the profit and loss sharing mechanisms are based on different principles. There is no limit to the share provided to investors in the asymmetric profit sharing. Is that intentional? This could also incentivise investors to take excessive risk, contrary to the good of society. Page 3

4 The definition of innovative enterprise, adds to the administrative burden of micro enterprises. Norwegian undertakings with less than NOK 5 million in turnover, 10 employees and 20 million on the balance sheet are exempted from the general audit requirement. These are the undertakings which will most frequently receive start-up aid. The Norwegian Government is therefore of the opinion that there should not be an audit requirement to establish whether they are eligible for start-up aid. Further, the Norwegian Government suggests that Article 20 (6)(b) should be deleted. This requirement is too strict as markets and technology change rapidly for innovative start-ups. This may require capital that was not foreseen in the original business plan. Article 25 - Investment aid for research infrastructures The Norwegian Government urges the Commission to reconsider the proposed aid intensity for investment aid to research infrastructures. In our experience, it can be difficult to get private investments into large multi-use research infrastructures, thus preventing the establishment of first class research infrastructures. Markets are often distorted by previous state financing of such infrastructure even if it has primary economic use, and the expectation that it will still be financed that way. Open access research infrastructures should be able to receive 100 % investment aid if all the aid is transferred to undertakings through reduced prices under the rules for Aid for research and development projects. If that is not an option, the 15 % income allowed from economic activity in order to approve 100 % state financing should be substantially raised as the Norwegian Government wishes to encourage more cooperation between research institutions and undertakings. Paragraph 4 of Article 25 states that Undertakings which have financed at least [30]% of the investment costs of the infrastructure may be granted preferential access with more favourable conditions, provided such access is proportional to the undertaking's contribution to the investment costs to avoid overcompensation and these conditions are made publicly available". The Norwegian Government assumes that if the infrastructure is owned by a research organisation which finances at least 30% of the investment costs itself with funds from its economic activities, the research organisation may be granted preferential access with more favourable conditions when using the infrastructure in its economic activities. The Norwegian Government would like to point out that an undertaking's investment in a research infrastructure might lead to financial loss regardless of the state aid granted to the infrastructure. To strengthen the undertakings' incentives to invest in research infrastructures despite the risk involved, we suggest that the 30% condition should only apply as regards the granting of preferential access. Regarding access on favourable conditions, any contribution to the investment costs should qualify. The Norwegian Government suggests the following text: "Access to the infrastructure shall be open to several users and be granted on a transparent and non-discriminatory basis. Undertakings which have contributed to the investment costs may Page 4

5 be granted access on more favourable conditions. Undertakings which have financed at least 30 % of the investment costs of the infrastructure may in addition be granted preferential access. Preferential access and access on more favourable conditions shall be proportional to the undertaking's contribution to the investment costs to avoid overcompensation. These conditions shall be made publicly available." Paragraph 7: This paragraph does not state the duration of the monitoring and claw-back mechanism. Is it to be in place for the whole of the amortisation period? Innovation clusters Article 26 The Norwegian Government is of the opinion that the 5 year limitation for operating aid for innovation clusters is too short. The Norwegian Government has gained comprehensive experience from several cluster programs, and in our experience, clusters develop differently depending on size, maturity and geographical location. The Norwegian Government would therefore like to suggest an extension of the time limitation for operating aid. We believe that a 10 year time period would give clusters in good progress more predictable and better conditions to develop their full potential. This will reduce the need of public investment and make the innovation cluster more efficient. Further, the Norwegian Government would ask for a clarification in Article 26(4). If the fees charged to participants should correspond to the market price or their costs, there would be little need for aid. It should therefore be clarified that it is the net costs after aid. Furthermore, the Norwegian Government requests that the Commission clarifies whether the threshold of 7.5 million EUR includes a combination of both investment aid and operating aid, or whether the threshold applies for each category of aid? Training aid- Article 30 Norwegian Government finds it problematic not to have the possibility to grant aid to accommodation costs for the trainer and the trainee. Only aid for travel expenses may be granted. There may be situations where, due to long distances, it is necessary to provide accommodation for the trainer and the trainee in order to conduct a training project. Furthermore, aid to trainees personnel costs should be made possible also for large undertakings covered by the regional aid map. Undertakings covered by the regional aid map often find it difficult to attract competent personnel, and therefore often have to conduct the required training themselves. Definitions for Aid for Research and Development and Innovation Definition 98 It is the opinion of the Norwegian Government that the definition of a research infrastructure could be more precise. The definition allows for different interpretations of what constitutes infrastructure, for example one or a few sets of instruments constitute a separate research Page 5

6 infrastructure, or does the infrastructure consist of the entire laboratory with all its equipment? In a situation with several different, but related sets of equipment or instruments, where should the line be drawn between different infrastructures? We believe that different interpretations may lead to different results with regard to when the maximum aid intensity is reached. Yours sincerely, Monica Wroldsen Deputy Director General Silje Thorstensen Adviser This document has been signed electronically and therefore it is not signed by hand Page 6