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PR(94)16: Surveillance Authority extends term of synthetic fibres rules


The EFTA Surveillance Authority today extended the period of validity of its rules for aid to the synthetic fibres industry in the EFTA States participating in the European Economic Area (EEA) by six months until 30 June 1995.

In the European Union, the award of aid to the synthetic fibres industry has been subject to strict control since 1977 when, because of the low rate of capacity, utilisation and the consequent loss of jobs as well as the risk that aid to the industry would exacerbate the situation and distort competition, the European Commission decided to introduce a Code on aid to the synthetic fibres industry.

The current version of the Code was taken over by the EFTA States participating in the EEA (Austria, Finland, Iceland, Norway and Sweden) upon the entry into force 01' the EEA Agreement on 1 January 1994 as an integral part of the State Aid Guidelines of tile EFTA Surveillance Authority. These rules require the notification of all proposals to award aid, in whatever form, to synthetic fibres producers by way of support of such activities. They apply to all types of staple fibre and filament yam based on polyester, polyamide, acrylic or polypropylene irrespective of whether the end‑use is industrial or textile. In terms of industrial processes, they apply to the production and texturization of such fibres and yarns and to their polymerisation where this is integrated with production in terms of the machinery involved.

The rules also set out the criteria to be applied by the Authority when scrutinising such aid proposals; among other matters, they specify that there should be a significant reduction in the production capacity of a prospective recipient of investment aid, and that companies should finance from internal resources any investments in expanding or maintaining capacity.

On 19 July 1994 the European Commission extended the period of validity of it's Code until 30 June 1995. Under the EEA Agreement, the EFTA Surveillance Authority is to adopt corresponding acts in order to maintain equal conditions of competition. The EFTA States have thus been asked by the Authority to indicate their agreement to the extension. If an EFTA State decided to refuse to agree, the Authority would have to open a formal investigation procedure against all existing aid schemes of that State, under which aid could possibly be granted to the synthetic fibres industry.

For further information please contact Wolfgang Mederer (State Aid and Monopolies Directorate) at tel. 22 66 852.


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