22.10.2013

EN

Official Journal of the European Union

L 280/26

(1)

By letter dating from 2 February 2007, the Commission requested Romania to provide information regarding public debt waivers and the rescheduling of public debt for Petrotub Roman S.A. (hereinafter ‘Petrotub‘� in the context of its privatisation in 2003 (following privatisation, the company was re-named Mittal Steel Roman, and subsequently ArcelorMittal Tubular Products S.A. (2) - hereinafter ‘楢M Roman‘�.

(2)

By letter dated 25 September 2007, the Commission informed Romania that it decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (3) in respect of possible aid involved in the privatisation of Petrotub. The Decision was published in the Official Journal of the European Union (4). The Commission invited interested parties to submit their comments on the measure.

(3)

Romania submitted its comments by letter of 26 November 2007, registered on the same date. By letters dated 28 January 2008, registered on 29 January 2008, ArcelorMittal (the parent company) and AM Roman (the subsidiary concerned) submitted their comments, which were communicated to Romania on 12 February 2008. Romania reacted by letter of 11 March 2008, registered on the same date.

(4)

The Commission requested additional information by letters of 26 February 2009, 8 October 2009 and 29 January 2010. Romania replied by letters of 27 April 2009, 19 October 2009 and 3 February 2010, all registered on the same dates.

(5)

AM Roman is a seamless steel tubes producer located in Roman, a Romanian region receiving assistance under Article 107(3)(a) TFEU (5). Before privatisation in 2003, the company, then named Petrotub, was a producer of seamless steel tubes, whose production consisted of hot-rolled and cold-rolled steel tubes with diameters between 6 and 620 mm and wall width between 0,5 and 70 mm. These products have various applications in energy industries (oil, gas, chemicals, nuclear and conventional energy) and in the machinery and construction industries. After privatisation, the company continued to operate on the same product market. At present ArcelorMittal Tubular Products Holding B.V. Rotterdam NLD (of the ArcerlorMittal group) holds a 69,76 % stake in the company (6).

(6)

On 23 July 2003 the Romanian privatisation agency APAPS (now AVAS) (7) made public its intention to sell its 70 % stake in Petrotub. The privatisation took place through public tender. A sale agreement was signed with LNM Holdings NV (now ArcelorMittal) on 28 October 2003, for the purchase price of USD 6 million (EUR 5,1 million (8)).

(7)

In the context of privatisation, APAPS agreed on behalf of the Romanian state to write off public debt totalling EUR 22,5 million, and to reschedule the remaining public debt.

(8)

In 1998 Petrotub had contracted a commercial loan of DEM [30-50] (9) million [EUR 15-25 million] with duration until 2011 from the German development bank Kreditanstalt f眉r Wiederaufbau (hereinafter ‘楰fW‘�, in order to purchase a new mill from Mannesmann AG. The KfW financing package was secured on its different segments with State guarantees granted by Germany and Austria and a bank guarantee from the Romanian bank Banca Comercial膬 Rom芒n膬 (BCR). The German State guarantee was counter-guaranteed by the Romanian State. The Romanian counter-guarantee covered 85 % of the total KfW loan of DEM 30-50 million. Romania charged Petrotub a one-off fee of [3-7 %].

(9)

In the opening decision, the Commission informed Romania that the basis for opening the formal investigation procedure was Annex VII Section B on Steel Restructuring to the Protocol to the Accession Treaty of Romania (hereinafter ‘楢nnex VII‘�; and that, in the absence of specific provisions in Annex VII with respect to the legal situation of Romanian tube producers at the time of the privatisation, the Commission would investigate the existence and compatibility of State aid to AM Roman on that basis.

(10)

The Commission noted that the acquisition price (EUR 5,1 million) did not cover the loss incurred by the State in the form of the waiver of EUR 22,5 million of public debt to which the Romanian privatisation agency APAPS agreed in the context of privatisation.

(11)

Before the opening of the formal investigation procedure, Romania had provided a report by an external consultant (10) to show that privatisation on the given terms had been the most advantageous solution for the State.

(12)

The report identified privatisation as leading to the most advantageous situation for the Romanian State. The table below compares the sums estimated to be obtained by each of the creditor public institutions in the privatisation and the liquidation scenarios (11).

(13)

The report was based on the assumption that, in the event of liquidation, the 1998 guarantee would have been triggered, and the State (through the Ministry of Finance) would have become liable for the outstanding amount of the 1998 KfW loan taken by Petrotub, i.e. for EUR [15-25] million. In other words, in the liquidation scenario, the State would have eventually received only EUR [2-9] million, which is lower by comparison to the total of EUR [4-9] million received through privatisation.

(14)

In the opening Decision, the Commission questioned whether the outcomes of the privatisation and liquidation scenarios should have been estimated for the State as a whole, as the expert report suggested, or separately for each of the public creditors, in line with the HAMSA jurisprudence (12).

(15)

Inter alia, the Commission also doubted that the loss of EUR [15-25] million as a result of the triggering of the 1998 guarantee could be taken into account in estimating the outcome of liquidation. In line with the HYTASA (13) and Gr枚ditzer (14) cases, a distinction should be made between the obligations which the State must assume as shareholder of the company and the obligations it must assume as public authority. It follows that the costs assumed in relation to a public authority act cannot be taken into account for the purpose of estimating the costs that a private shareholder would have been in the position to, and willing to incur. The Commission regards the fact that in 1998 the Romanian Ministry of Finance issued a sovereign guarantee for Petrotub as an indication that a private shareholder would not have been in the position to issue such a guarantee. Another indication in this sense is the fact that the 1998 guarantee was granted on terms and conditions that a private operator might not have accepted.

(16)

In its submission of 27 November 2007, Romania argued mainly that the privatisation of Petrotub in October 2003 had not involved an advantage to Petrotub or the buyer, and therefore the operation had not involved State aid within the meaning of Article 107(1) TFEU.

(17)

Romania first underlined that Petrotub had been sold through an open, transparent and unconditional tender procedure ‘�a fact which, in the opinion of the Romanian authorities, showed that Petrotub had been sold at the market price and that the buyer did not derive any advantage from the purchase. Second, Romania considered that it had acted in the same way as any private vendor would have acted: in choosing between the privatisation and liquidation scenarios, the State opted for the scenario that was most advantageous exclusively on financial terms, without taking into account non-commercial or policy considerations of the kind that by their nature are characteristic of the exercise of public authority.

(18)

In relation to this second argument, Romania showed that, under national law, the privatisation agency AVAS was required and empowered to estimate and compare the overall outcomes of privatisation and liquidation by reference to the State budget as a whole. In other words, the privatisation agency chooses the scenario that is most advantageous for the State budget as a whole, in the same way in which a large holding company comprising several creditors would do. From this perspective, contrary to the Commission's views, the State could not and did not have to estimate the outcomes of privatisation and liquidation separately for each of the public bodies concerned.

(19)

In addition, in estimating the outcomes of liquidation, the State was entitled to take into account the loss associated with the triggering of the 1998 guarantee, because, under the given conditions, such guarantee would have been granted to Petrotub also by a private investor. The company was not in difficulty at the time when the guarantee was granted, and the risk premium charged to Petrotub for the guarantee was an appropriate remuneration for a shareholder guarantee issued in favour of a company which was in good condition at the time.

(20)

Moreover, the 1998 guarantee must be assessed from the perspective of the relevant State aid rules in force at that time. The Commission Communication on short-term export credit guarantees applicable at the time excluded long-term export credit guarantees from the scope of scrutiny under Article 107(1) TFEU (then Article 87(1) TEC) (15). Romania also stressed that in 1998, when the guarantee was granted, Petrotub was a tube producer, and as such was not covered by the ECSC definition of steel or by the provisions of Protocol 2 on ECSC steel in the Europe Agreement.

(21)

AM Roman and its parent company ArcelorMittal fully endorsed Romania's argumentation. The companies also underlined that, under the Romanian legislation applicable at the time, and under the Europe Agreement rules on State aid, the State guarantee issued in favour of Petrotub in 1998 did not involve State aid. Furthermore, the 1998 guarantee constituted a clear enforceable commercial obligation undertaken by the State as majority shareholder of the company concerned, and can therefore be included in the estimate of the liquidation costs. ArcelorMittal also stressed that it had paid a market price for the acquisition of Petrotub, and therefore any possible advantage resulting from privatisation, quod non, would at any rate have remained with the State as a seller.

(22)

This procedure addresses events which took place before Romania‘檚 accession to the European Union (1 January 2007). Petrotub was privatised in October 2003. Also, in 1998 the Romanian State had issued a guarantee in favour of Petrotub in relation to a loan of DEM [30-50] million from KfW to purchase a new mill. The 1998 guarantee is linked to the 2003 privatisation insofar as Romania argued that its costs in case of liquidation must be taken into account when assessing the 2003 privatisation operation under the market economy operator test.

(23)

As a general rule, Articles 107-108 TFEU do not apply to measures granted before accession which are no longer applicable thereafter (16). By derogation from this general rule, and therefore on an exceptional basis, the Commission has the competence to review State aid granted by Romania in the context of the restructuring of its steel industry before accession on the basis of Annex VII to the Accession Treaty of Romania (17).

(24)

Annex VII contains provisions allowing Romania to conclude the restructuring of its steel industry as initiated before accession. The pre-accession restructuring of the Romanian steel sector was carried out on the basis of Protocol 2 on ECSC Steel annexed to the Europe Agreement (hereinafter ‘Protocol 2‘�, as extended by the Additional Protocol signed on 23 October 2002 (hereinafter ‘the Additional Protocol‘�.

(25)

Protocol 2 granted to Romania a ‘榞race period‘�of 5 years, from 1993 until the end of 1998, to restructure its ECSC steel industry in view of accession. The ‘榞race period‘�was extended until the end of 2004 by an Additional Protocol approved by Council Decision of 29 July 2002 and signed on 23 October 2002. During the resulting total ‘榞race period‘� i.e. from 1993 until the end of 2004, Romania was allowed to give restructuring aid to the steel sector on terms and conditions resulting from Protocol 2 (as extended by the Additional Protocol) and on the basis of a National Restructuring Program (hereinafter ‘NRP‘� agreed by the Community. The Romanian NRP was approved by the Council on 18 July 2005 (18).

(26)

Annex VII is a ‘safeguard mechanism‘�allowing the Commission to monitor after 1 January 2007 (the accession date) aid granted by Romania to the steel sector before accession on the basis of Protocol 2 (as extended by the Additional Protocol) and the NRP. Furthermore, Annex VII empowers the Commission to recover aid given in breach of Protocol 2 and the NRP. Thus Annex VII is a lex specialis allowing on an exceptional basis and by derogation from the general regime the retroactive monitoring and review of State aid granted by Romania to its steel industry before accession. In recent judgments concerning pre-accession State aid granted to Polish steel companies (19) the General Court confirmed the lex specialis character of Protocol 8 to the Accession Treaty of Poland, which contains equivalent provisions to those set out in Annex VII.

(27)

In the context of this procedure, the Commission must assess whether the exceptional retroactive control competence described in recitals (23)-(26) above also covers measures granted by Romania to tube producers before accession. To this end, the legal bases applicable to this case, consisting of Annex VII in conjunction with Protocol 2 and the Additional Protocol, have to be interpreted with a view to determining whether their provisions cover measures granted to Romanian tube producers before accession.

(28)

It is a generally-recognised principle of law that the provisions of a lex specialis, which derogates from the general regime, must be interpreted in a strict sense. A strict interpretation of the above-mentioned legal bases (see recitals (29)-(43) below) leads to the conclusion that the Commission‘檚 exceptional retroactive control competence is limited to (potential) pre-accession aid to ECSC producers, thereby excluding (potential) aid to tube producers.

(29)

Paragraphs (12) and (17) of Annex VII lay down the Commission‘檚 monitoring and retroactive control competences with respect to pre-accession aid to the Romanian steel industry. Paragraph (12) empowers the Commission and the Council to monitor the implementation of the Romanian NRP before and after accession, until 2009. Paragraph (17) empowers the Commission to order recovery of State aid granted in breach of paragraphs (1) to (3) of Annex VII (as indicated in recitals (30)-(32) below).

(30)

Paragraph (1) of Annex VII stipulates that State aid granted by Romania for the restructuring of ‘�span class="italic">specified parts of its steel industry