Brussels Brief - December 22, 2006
December 22, 2006
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Due to the closure of the Commission and other European Institutions over the Christmas period, the next Brussels Brief will be sent on Friday 12 January 2007.
KEY DEVELOPMENTS
Court of First Instance: Innovative Discovery of Documents in State Aid Litigation
Philip Bentley QC
The Court of First Instance (CFI) has ruled that where the European Commission refuses access to documents under the exception designed to protect the purpose of investigations, it must undertake a concrete, individual examination of each of the documents concerned. It cannot make a blanket refusal on the grounds simply that the documents are part of the file in a State aid investigation. This question arose when a German glass company, Technische Glaswerke Ilmenau GmbH (TGI), sought access to all the documents in the Commission’s file concerning State aid granted to that company. TGI intended to use these documents in other proceedings before the CFI seeking annulment of a Commission decision prohibiting the aid. This illustrates an innovative use of Regulation (EC) No 1049/2001 on access to documents. It enabled “discovery of documents” for the purposes of CFI proceedings, thereby compensating for a gap in the CFI’s rules of procedure.
Aviation: Proposed Emissions Trading Scheme for Air Transport
Philip Torbøl
The European Commission has published a formal proposal to include air transport in the EU’s Emissions Trading Scheme. The aim of this initiative is to limit the rapid growth in aviation emissions, to which end the Commission proposes capping the total number of emission allowances available to airlines at the average emissions level in 2004-2006. Both EU and foreign-based airlines will be subject to the scheme. Initially, from 2011, only inter-EU flights will be covered, but from 2012 the scope will be extended to all international flights arriving at or departing from EU airports. Very light aircraft will be exempt from the scheme. It is estimated that by 2020 emissions will be almost halved in comparison to what would otherwise be the case, amounting to 183 million tonnes of CO2 emissions each year.
Mergers: Commission Clears at Second Phase Merger in Tea and Coffee Filtration Market
Yannis Virvilis
Following a second phase merger investigation, the European Commission has cleared the acquisition of a paper mill owned by the UK company Crompton by the US company Glatfelter. The activities of the parties overlapped in the market for wetlaid fibre materials, which are used for tea and coffee filtration. This case was submitted to the Commission upon referral by the German Competition Authority pursuant to Article 22 of the EC Merger Regulation. This provision permits Member States to ask the Commission to examine a concentration that does not meet the EU jurisdictional thresholds, if it affects competition throughout the EU. On the substance of the case, the Commission found that competition in the EEA would not be restricted following the transaction, due to the existence of important actual and potential competitors.
Competition: Commission Rectifies Decision in Stainless Steel Cartel Case
Yannis Virvilis
The European Commission has adopted a decision in the so-called “alloy surcharge” cartel case in the stainless steel sector, as regards the company ThyssenKrupp. This decision comes after the European Courts annulled the initial Commission decision of 1998 on procedural grounds, insofar as the company ThyssenKrupp was concerned. More specifically, the company ThyssenKrupp had accepted liability for the cartel behaviour of one of its subsidiaries. However, the Commission had not provided the company with the right to be heard and to make its views known. Following the judgments rendered by the European Courts, the Commission issued a statement of objections against ThyssenKrupp inviting it to give its views. The fine ultimately imposed on the company was slightly reduced in comparison to the fine imposed in the original 1998 decision.
State Aid: French Exemption from Tax Deductible Depreciation Ceiling for Leased Assets Constitutes State Aid
Elena Kostadinova
The European Commission has concluded that a French tax scheme involving assets leased by an economic interest grouping (EIG) constitutes State aid. The French Tax Code provides that the tax deductible depreciation of assets leased by an EIG may not exceed the amount received by way of rent. An exception to this rule, subject to approval by the Finance Minister, is when the assets are depreciable over eight years. The Commission’s in-depth investigation launched in December 2004 showed that the scheme benefited the transport sector. The Commission therefore concluded that the removal of the depreciation ceiling constituted State aid specific to the transport sector. The recovery of the unlawful aid is limited to aid granted since December 2004. France must now amend the relevant French Tax Code provisions.
Mergers: Commission Decides that Spanish Measures in Proposed E.ON/Endesa Concentration Infringe EC Law
Mélanie Bruneau
The European Commission has decided that
Internal Market: Infringement Procedure Against Ireland Over Minimum Retail Prices of Cigarettes
Maria Scimemi
The European Commission has sent a reasoned opinion to Ireland within the framework of an Article 226 infringement procedure for fixing minimum and maximum retail prices of cigarettes. In line with case law of the European Court of Justice (ECJ), the Commission took the view that the imposition of minimum prices as a measure to tackle cigarette consumption is contrary to Community law and distorts competition by safeguarding margins for the sole benefit of manufacturers. The Commission pointed out that tobacco consumption may be reduced by increasing excise duties on cheap cigarettes, a measure which would not hamper price competition. Unless Irish legislation is brought into compliance within two months of receipt of the reasoned opinion, the Commission may decide to refer the case to the ECJ. The Commission has already sent reasoned opinions over minimum retail prices of cigarettes to France and Belgium. See Brussels Brief of 30 June 2006.
Internal Market: REACH Regulation Receives Final Approval
Andrea Hamilton
Following approval by the European Parliament, the European Council gave final approval to the comprehensive chemicals regulation known as REACH on 18 December. REACH, which stands for the Registration, Evaluation and Authorisation of Chemicals, is designed to promote human and environmental health, as well as Europe’s chemicals industry. Among other things, REACH will require the registration of approximately 30,000 chemical substances over the next 11 years. Certain hazardous substances will be subject to a strict authorisation procedure, and other particularly hazardous substances may be phased out entirely. REACH will be administered by a new agency, the European Chemicals Agency, which will be established in Helsinki. REACH will enter into force on 1 June 2007. See Brussels Brief of 1 December 2006.
Monday 25 December – Friday 29 December 2006
COUNCIL MEETINGS
No meetings scheduled for next week
COURT OF JUSTICE
Judicial vacation of the Court of Justice from 18 December 2006 to 7 January 2007 inclusive
COURT OF FIRST INSTANCE
Judicial vacation of the Court of First Instance from 18 December 2006 to 7 January 2007 inclusive
