State aid - France: Aid to the Laboratoire National d'Essais - comment within one month (link)

October 24, 2005

Brussels, 21 Oct 2005

Full text of this notice

Invitation to submit comments pursuant to Article 88(2) of the EC Treaty

By means of the letter dated 5 July 2005 reproduced in the authentic language on the pages following this summary, the Commission notified the French Republic of its decision to initiate the procedure laid down in Article 88(2) of the EC Treaty concerning the abovementioned aid.

Interested parties may submit their comments on the measures in respect of which the Commission is initiating the procedure within one month of the date of publication of this summary and the following letter, to:
European Commission
Directorate-General for Competition
Directorate State Aid II State Aid Registry SPA 3 06/05 BE-1049 Brussels
Fax (32-2) 296 12 42

These comments will be communicated to the French Republic. Confidential treatment of the identity of the interested party submitting the comments may be requested in writing, stating the reasons for the request.

TEXT OF SUMMARY

The Laboratoire National d'Essais (LNE) was established in 1901 as a public institution under the supervision of the Ministry of National Education. In 1978 it acquired EPIC (public enterprise of an industrial and commercial nature) status. It provides testing, metrology, certification, calibration, training and R&D services both as part of the tasks assigned to it by its supervisory authority and on a competitive basis.

The Decree on the LNE stipulates that `the resources accruing to the enterprise shall include: ... grants from the central government, regional or local authorities, public institutions and public or private bodies of all kinds ...'. On that basis, the LNE has so far been awarded operating grants and investment grants to cover the operational costs incurred in carrying out the tasks assigned to it by the State and the exceptional costs of building two laboratory complexes.

Since the grants in question are intended to finance activities or investment projects of a non-economic nature or deriving from the fulfilment of a remit conferred by the State, they should not be used to support the LNE's commercial activities. However, the LNE has hitherto kept a single set of accounts for a large share of its activities that are of a mixed non-commercial and commercial nature. Furthermore, the document whereby the LNE is assigned its tasks by the State does not enable the scope and nature of the activities relating to those tasks to be accurately ascertained. In a situation where noncommercial and commercial activities are not shown in separate accounts and cannot be precisely demarcated, the LNE may have received surplus grants for carrying on its commercial activities. In fact it already received surplus funding in this way, in 2002. The provision of such funding would be tantamount to cross-subsidising commercial activities and would constitute State aid within the meaning of Article 87 of the EC Treaty.

At this stage, the aid in question does not appear to satisfy any of the compatibility tests laid down in Article 87 of the EC Treaty or in the Community State aid guidelines. The Commission has therefore decided to initiate formal investigation proceedings in respect of the measure.

TEXT OF LETTER

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