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19.10.2011 Official
Journal
of
the
European
Union L
274/15
COMMISSION DECISION
of 13 July 2011
concerning State aid C 3/09 (ex NN 41 A-B/03) implemented by Portugal for the collection,
transportation, treatment and destruction of slaughterhouse waste
(notified under document C(2011) 4888)
(Only the Portuguese text is authentic)
(2011/677/EU)
THE EUROPEAN COMMISSION,
(6) Since
no
reply
was
received
within
the
4-week
period
allowed in the last letter mentioned above, on
19 December 2003 the Commission services sent the
Portuguese authorities an official reminder, stipulating
Having regard to the Treaty on the Functioning of the European
that, should the latter fail to reply, the Commission
Union (TFEU), and in particular the first subparagraph of
services reserved the right to propose that the
Article 108(2) thereof,
Commission send an information injunction, pursuant
to Article 10(3) of Council Regulation (EC) No 659/1999
of 22 March 1999 laying down detailed rules for the
Whereas:
application of Article 93 of the EC Treaty ( 2 ) (now
Article 108 TFEU).
I. PROCEDURE
(7) By
letter
of
5
February
2004
registered
on
the
same
date,
(1) Following
a
complaint,
on
15
November
2002
the
the Permanent Representation of Portugal to the
Commission asked the Portuguese authorities for
European Union sent the Commission the reply from
information on the introduction of a parafiscal charge
the Portuguese authorities to the letters from the
designed to finance the collection, transportation,
Commission services of 16 and 30 April 2003.
treatment and destruction of mammalian meat and poul

trymeat by-products, pursuant to Decree-Law
No 197/2002 of 25 September 2002 ( 1 ) (hereinafter
referred to as ‘Decree-Law No
197/2002’). The
(8) By
letter
of
11
November
2004,
the
Commission
services
Portuguese authorities replied by letter of 20 January
asked the Portuguese authorities for further information
2003.
on the measure in question. The Portuguese authorities
were given a period of 4 weeks in which to reply.
(2) As
the
information
provided
indicated
that
this
measure
had been implemented without prior authorisation from
the Commission, it was entered in the register of non-
(9) By
letter
of
30
December
2004,
registered
on
5
January
notified aid under number NN 41 A-B/03.
2005, the Permanent Representation of Portugal to the
European Union, on behalf of the Portuguese authorities,
in view of the time needed to gather this information,
asked for a further period of 1 month in order to provide
(3) By
letters
of
16
and
30
April
2003,
the
Commission
all the information requested.
services asked the Portuguese authorities for further
information on the measure in question. The Portuguese
authorities were given a period of 4 weeks in which to
reply.
(10) By
letter
of
17
January
2005,
the
Commission
services
granted an extension for the second time, as requested.
(4) By
letters
of
5
May
and
6
June
2003,
registered
on
5 May and 10 June 2003 respectively, the Permanent
(11) Since
no
reply
was
received
to
their
questions
within
the
Representation of Portugal to the European Union, on
further period allowed, on 12 April 2005 the
behalf of the Portuguese authorities, in view of the time
Commission services sent the Portuguese authorities
needed to gather this information, asked for a further
another official reminder, drawing the latter’s attention
period in order to provide all the information requested.
once again to the fact that, should they fail to reply
within the 4-week period allowed for this purpose, the
Commission services reserved the right to propose that
(5) By
letter
of
25
July
2003,
the
Commission
services
the Commission send an information injunction,
granted an extension of 4 weeks.
pursuant to Article 10(3) of Regulation (EC)
No 659/1999.
( 1 ) Diário da República, I Series A — No 222 of 25 September 2002,
p. 6535.
( 2 ) OJ L 83, 27.3.1999, p. 1.

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L 274/16
EN
Official Journal of the European Union
19.10.2011
(12) The
aforementioned
period
for
a
reply
to
be
submitted
replying. The Portuguese authorities replied to the
expired in May 2005. Since no reply was received within
questions of the Commission services by letter of
that period, the Commission, by Decision of 21 February
1 April 2011.
2006 ( 3 ), called upon Portugal to provide all the
information requested, stipulating that, should the
Portuguese authorities fail to reply, it reserved the right
to initiate the procedure laid down in Article 108(2)
TFEU (see paragraph 80 of the information injunction).
(20) By
letter
of
20
June
2011,
the
Commission
services
informed the Portuguese authorities that they were
going to propose that the Commission take a conditional
positive decision, and they set out the conditions to
(13) As
none
of
the
requested
information
was
provided,
on
which that decision would be subject.
28 January 2009 the Commission decided to initiate the
procedure laid down in Article 108(2) TFEU. This
Decision was published in the Official Journal of the
European Union ( 4 ). The Commission invited the other
Member States and interested parties to submit their
II. DESCRIPTION
comments on the aid in question.
(21) According to the information provided by the Portuguese
authorities, 66 cases of bovine spongiform encepha
lopathy (hereinafter referred to as ‘BSE’) were detected
(14) As
no
comments
were
received
from
Portugal
within
the
in Portugal between 1 January and 14 October 1998.
prescribed period, on 18 March 2009 the Commission
In view of this risk to public and animal health, the
sent an official reminder to the Portuguese authorities.
Commission adopted Decision 98/653/EC of
On 14 April 2009 Portugal sent its comments to the
18 November 1998 concerning emergency measures
Commission and also provided a copy of Decree-Laws
made necessary by the occurrence of bovine spongiform
No 393-B/98 and No 244/2003. On 15 June 2009
encephalopathy in Portugal ( 5 ), and imposed emergency
comments were received from ETSA — Empresa de
measures as required by the BSE cases in Portugal, in
Transformao de Subprodutos Animais, SA.
particular prohibiting the dispatch of certain animals
and animal by-products from Portugal to other
Member States.
(15) On
1
July
2009
the
Commission
sent
ETSA’s
comments
to the Portuguese authorities. The Portuguese authorities
did not send the Commission any observations on
ETSA’s comments.
(22) In order to mitigate the effects of the measures adopted
to combat BSE, from 1999 the Portuguese State assumed
the total cost of the collection, processing and
destruction of mammalian meat and poultrymeat by-
products. Through Decree-Law No
393-B/98 of
(16) Further
to
ETSA’s
comments,
on
19
February
2010
the
4 December 1998 (
Commission services sent a letter to the Portuguese

6 ) (hereinafter referred to as ‘Decree-
Law No
393-B/98’), the Portuguese State assumed
authorities requesting additional clarification. The
responsibility for and the cost of the collection,
Portuguese authorities replied by letter of 27 April 2010.
processing and destruction of these by-products.
(17) By
letter
of
1
February
2011,
the
Commission
services
requested clarification from the Portuguese authorities
(23) Article
4(3)
of
Decree-Law
No
393-B/98
allowed
charges
and called upon them to answer fully all the questions
to be imposed on slaughterhouses in order to finance the
raised previously by those services.
destruction of certain raw materials. According to the
information received from the Portuguese authorities,
this charge was not imposed on slaughterhouses.
(18) By
letter
of
24
February
2011,
the
Portuguese
authorities
requested an extension of 30 days to the deadline for
replying.
(24) The
Portuguese
authorities
have
explained
that
they
did
not have a sufficient number of specific facilities in order
to adequately treat the waste and that they were therefore
(19) By
letter
of
28
February
2011,
the
Commission
services
forced to contract these services — which are, by their
granted the extension of 30 days to the deadline for
nature, the State’s responsibility — to the private sector.
( 3 ) Decision C(2006) 576, notified to Portugal by letter No SG(2006)
( 5 ) OJ L 311, 20.11.1998, p. 23.
D/200772 dated 21 February 2006.
( 6 ) Diário da República, I Series A — No 280 of 4 December 1998,
( 4 ) OJ C 109, 13.5.2009, p. 9.
p. 6708.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/17
(25) The
Portuguese
authorities
have
explained
that
this
public
(31) The
Portuguese
authorities
have
explained
that,
in
order
interest mission was entrusted to the private sector in
to meet their obligations in this respect, they decided to
accordance with Decree-Law No 197/99 of 8 June
pass on the cost of these operations to economic
1999 ( 7 ), which transposed into national law European
operators in the sector, in strict compliance with the
Parliament and Council Directive 97/52/EC of
polluter pays principle and without losing sight of the
13 October 1997 amending Directives 92/50/EEC,
concerns about protecting public health, for which they
93/36/EEC and 93/37/EEC concerning the coordination
are responsible and which must be ensured. Portugal
of procedures for the award of public service contracts,
therefore adopted the measure laid down in Decree-
public supply contracts and public works contracts
Law No 197/2002 of 25 September 2002.
respectively ( 8 ). The private undertakings entrusted with
providing these services were selected based on their
technical ability to correctly perform the public interest
mission entrusted to them, having regard to the urgent
(32) Since
October
2002,
when
Decree-Law
No
197/2002
need to treat these by-products safely, quickly and
entered into force, the cost of the collection, transpor
effectively. The Portuguese authorities have supplied a
tation, processing and destruction of mammalian meat
model service provision contract, which applied
and poultrymeat by-products has been financed by
between 1 September 2004 and 31 December 2004.
revenue from a parafiscal charge imposed on slaughter
houses, importers of bone-in beef, veal and pigmeat, and
intra-Community operators, i.e. bone-in beef, veal and
pigmeat operators/receivers.
(26) According
to
the
information
provided
by
the
Portuguese
authorities, the parameters used to calculate the compen
sation for the services provided were established
beforehand by Joint Order No 96/99 of 25 January
(33) By
letter
of
20
January
2003,
the
Portuguese
authorities
1999 ( 9 ). The contents of this Order were periodically
indicated that the following operators were exempt from
checked, and were amended by Joint Order
paying this charge:
No 324/2001 of 6 April 2001 ( 10 ) and by Joint Order
No 124/2002 of 19 February 2002 ( 11 ).
— slaughterhouses collecting, processing and destroying
all by-products generated either in the slaughterhouse
(27) Through Decision 2000/766/EC
( 12 ), the Council
itself or in cutting plants, with the exception of
prohibited the use of animal by-products from almost
specified risk materials (hereinafter referred to as
all species in animal feed and imposed the destruction
‘SRM’), given that these units were in a position to
of these by-products in all Member States, including
independently treat the respective by-products (see
Portugal.
Annex 2, paragraph 2, of Decree-Law No 197/2002),
(28) The
Portuguese
authorities
have
explained
that,
due
to
— boned meat importers and intra-Community
this Decision, the quantity of waste increased, thereby
operators, as this operation does not generate by-
also increasing the cost of these operations.
products that must be treated under Community or
domestic law.
(29) Through
Decision 2001/376/EC
( 13 ), the Commission
decided to maintain Decision 98/653/EC, adopted in
(34) With
regard
to
the
precise
use
of
the
revenue
from
this
relation to Portugal.
charge, the Portuguese authorities have stated that this
was exclusively used to finance the operations inherent in
the services of collecting, transporting, processing and
destroying mammalian meat and poultrymeat by-
(30) Regulation (EC) No
1774/2002 of the European
products, including SRM.
Parliament and of the Council of 3 October 2002
laying down health rules concerning animal by-
products not intended for human consumption ( 14 ) lays
down specific rules for the collection, processing and
(35) The amount of the charge is set in Annex 1 to Decree-
destruction of animal by-products, applicable to various
Law No 197/2002, as indicated below, in proportion to
categories of by-products.
the weight and depending on the species in question:
( 7 ) Diário da República, I Series A — No 132 of 8 June 1999, p. 3171.
( 8 ) OJ L 328, 28.11.1997, p. 1.
( 9 ) Diário da República, II Series — No 20 of 25 January 1999, p. 935.
(EUR)
( 10 ) Diário da República, II Series — No 82 of 6 April 2001, p. 6270.
Species/Type Beef and Veal Pig Sheep/Goat Poultry Other
( 11 ) Diário da República, II Series — No 42 of 19 February 2002,

p. 3158.
( 12 ) OJ L 306, 7.12.2000, p. 32.
Charge/kg
0,05 0,04 0,03 0,06 0,06
( 13 ) OJ L 132, 15.5.2001, p. 17.
of carcass
( 14 ) OJ L 273, 10.10.2002, p. 1.

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L 274/18
EN
Official Journal of the European Union
19.10.2011
(36) In
order
to
finance
the
services
of
collecting,
trans
(43) With regard to the correspondence between the revenue
porting, processing and destroying SRM, Article 2(2) of
from the charges and the cost of the services financed by
Decree-Law No 197/2002 provides that a fixed charge of
these charges, the Portuguese authorities have stated that
EUR 0,30 per kilogram of SRM shall be specifically and
each charge set out in Annexes 1 and 2 to Decree-Law
solely imposed on slaughterhouses.
No 197/2002, as also the charge laid down in
Article 2(2) on SRM, was calculated based on the
actual cost of the services to be provided, bearing in
mind the nature and importance of the by-products
(37) All the charges were paid to a public body, the Instituto
generated by each animal species.
Nacional de Interveno e Garantia Agrícola (INGA),
using a reverse charge procedure. The charges imposed
on operators formed INGA’s revenue and were paid
directly to it.
(44) According
to the Portuguese authorities, this charge
formed, in all respects, the compensation payable by
users for the provision of a public service of general
interest. The amounts paid by operators liable for the
(38) As indicated in recitals 32 and 33 of this Decision,
charge were directly proportional to the quantities of
Article 4 of Decree-Law No 197/2002 provides that
waste actually delivered to the public service and to the
slaughterhouses may also arrange for the collection,
actual cost of disposing of this waste. In support of these
processing and destruction of by-products, with the
assertions, the Portuguese authorities have provided
exception of SRM, either by contracting the services of
documents containing figures for 1999 to 2005,
third parties or on their own initiative, under the relevant
proving the cost of the services, and, for 2003, a
legislation. Where slaughterhouses collect, process and
document containing figures for the revenue from the
destroy by-products generated in the slaughterhouse
charge, with regard to the various types of by-product,
itself — with the exception of SRM — the charge to
regardless of whether these were imported or domestic
be paid is set in Annex 2 to Decree-Law No 197/2002
products.
as follows:
(45) With regard to the question of whether imported
(EUR)
products could effectively benefit from the scheme in
Species/Type Beef and Veal Pig Sheep/Goat Poultry Other
the same way as domestic products, the Portuguese
authorities have given assurances that, in the spirit of
Charge/kg
0,03 0,02 0,00 0,00 0,00
the polluter pays principle, the charges applicable to
of carcass
slaughterhouses, imports or intra-Community trade in
bone-in meat reflected the costs associated with treating
all the by-products generated in the system up to the
final consumer.
(39) Where
slaughterhouses
collect,
process
and
destroy
all
by-products generated either in the slaughterhouse itself
or in cutting plants, with the exception of SRM, no
(46) According
to
the
Portuguese
authorities,
the
import
of
charge is payable.
bone-in meat generates by-products and therefore
benefited from the collection, transportation, processing
and destruction service, which justified applying these
charges.
(40) Under
Article
5
of
Decree-Law
No
197/2002,
INGA
is
responsible for checking that the charges are paid by
slaughterhouses, which must therefore keep up-to-date
registers of carcass numbers and weights. INGA is also
(47) The
Portuguese
authorities
consider
that
the
measures
responsible for checking that the charges payable on the
financed were in the public interest because, following
import and receipt of products from the European Union
the BSE crisis, it became clear that the disposal of
are paid. The operators/receivers in question must keep
slaughterhouse waste was a public service mission
up-to-date registers of all operations carried out.
falling under the responsibility of the State because of
its importance for the protection of human and animal
health and the environment.
(41) If
they
opt
for
this
alternative
scheme,
slaughterhouses
must submit the respective plans in advance for
assessment by INGA and must also submit to all the
(48) The
scheme
set
up
by
Decree-Law
No
197/2002
was
checks ordered by the competent authorities.
repealed by Decree-Law No 244/2003 of 7 October
2003 ( 15 ) (hereinafter referred to as ‘Decree-Law
No 244/2003’), which entered into force on
22 October 2003 and which laid down a general
(42) The
Portuguese
authorities
have
given
assurances
that
scheme and a transitional scheme for animal by-
this service was exclusively provided to entities
products not appropriate for human consumption.
generating by-products that had to be disposed of and
that the charge did no more than pass on the cost of
( 15 ) Diário da República, I Series A — No 232 of 7 October 2003,
these operations to these entities.
p. 6603.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/19
(49) Under the general scheme, slaughterhouses, cutting
(55) In
its
decision
to
initiate
the
procedure,
the
Commission
plants, hatcheries and egg production facilities must,
set out its concerns about the existence of aid in favour
either on their own initiative or by contracting the
of the undertakings providing the services of collection,
services of third parties, collect, transport, store, handle,
transportation, processing and destruction of the
process and destroy Category 1, 2 and 3 material
materials concerned, slaughterhouses and cutting plants,
generated within their own units, in accordance with
importers of bone-in beef, veal, pigmeat and poul
Regulation (EC) No 1774/2002, by implementing a
trymeat, intra-Community operators and livestock
plan subject to prior approval by the Veterinary Direc
farmers, and also about the compatibility of this aid.
torate-General (DG V).
(50) Slaughterhouses, cutting plants, hatcheries and egg
(56) The
Commission
in
particular
again
asked
the
questions
production facilities must submit a plan for the
raised in the first information injunction. With regard to
destruction or use of Category 3 material, to be
the aid in favour of the undertakings providing the
approved by DG V, within 90 days of the date of
services of collection, transportation, processing and
entry into force of Decree-Law No 244/2003 or the
destruction of the materials concerned, it expressed
date of starting up. With regard to Category 3 material,
doubts about the public interest service nature that the
until the plans are approved by DG V, INGA continues
Portuguese authorities were attributing to the activities in
to provide services of collection, transportation,
question, particularly in view of the Altmark
processing, temporary storage and destruction of by-
judgment ( 16 ). With regard to the aid in favour of
products, in accordance with Decree-Law No 197/2002.
slaughterhouses and cutting plants, importers of bone-
Until the plan for Category 3 material is approved,
in beef, veal, pigmeat and poultrymeat, and intra-
owners of slaughterhouses, cutting plants, hatcheries
Community operators in the sector, the Commission
and egg production facilities must pay the charges set
expressed doubts about whether the contribution paid
in Annex 1 to Decree-Law No 197/2002, except for
by the sector through the charge corresponded to the
those entities benefiting from the alternative scheme
actual financial cost of the collection service provided,
provided for in that Decree-Law, which must pay the
and requested quantified information in this respect.
charges set in Annex 2 to the Decree-Law.
Finally, with regard to the aid to livestock farmers, the
Commission expressed doubts about the advantages that
they could obtain from the scheme set up, given that
they were not subject to the charge.
(51) Under
the
transitional
scheme,
INGA
also
continued
to
provide these services for Category 1 and 2 material.
(57) The
Commission
then
examined,
on
a
preliminary
basis,
(52) With regard to Category 1 and 2 material, slaughter
the compatibility of the measures in question in light of
houses and cutting plants had to submit a destruction
the guidelines applicable since 1998 and concluded, on
or use plan within 30 days of the end of the transitional
deciding to initiate the procedure, that it did not have
scheme in November 2005. Until the plan was approved,
sufficient information to draw any conclusions as to the
they had to pay EUR 0,35 per kilogram of Category 1 or
compatibility of the measures in question.
2 material. Once the destruction or use plan was
approved, they became exempt from paying the charge.
(53) Once
slaughterhouses
and
cutting
plants
had
sent
a
plan
III. COMMENTS SUBMITTED BY PORTUGAL
to DG V, covering the operations needed to dispose of
(58) In
its comments, Portugal first recalls the country’s
Category 1 and 2 material, they assumed responsibility
specific situation in 1998 due to BSE. The Portuguese
for the cost of these operations and were subject to
authorities specifically refer to Decision 98/653/EC
checks by that competent authority. Article 3(4) of
prohibiting the dispatch from Portugal to other
Decree-Law No 244/2003 provided that this transitional
Member States or to third countries of certain
scheme would expire 2 years after the Decree-Law
products, particularly meat-and-bone meal, as such or
entered into force.
contained in other products. In this context, Portugal
introduced a BSE monitoring, control and eradication
plan, which was approved by the Commission’s
Standing Veterinary Committee. On 18 April 2001 the
(54) The
transitional
scheme
under
Decree-Law
No
244/2003
Commission decided to maintain the prohibition on
expired in November 2005. By letter of 1 April 2011,
Portugal, which was not repealed until 2004 by
the Portuguese authorities stated that, after the expiry of
Commission Regulation (EC) No 1993/2004 ( 17 ).
the transitional scheme under Decree-Law No 244/2003,
the cost of the operations to destroy the by-products of
slaughterhouses and cutting plants was passed on to
( 16 ) Judgment in Case C-280/00 Altmark Trans GmbH and Regierung
sprsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and
operators through waste recovery, conversion into
Oberbundesanwalt beim Bundesverwaltungsgericht [2003] ECR I-7747.
biofuels, and export of meal.
( 17 ) OJ L 344, 20.11.2004, p. 12.

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L 274/20
EN
Official Journal of the European Union
19.10.2011
(59) Portugal
therefore
insists
that,
between
1998
and
2004,
authorities indicate that the profits were between 30 %
all the measures taken were aimed at dealing with an
and 39,5 %, which, in their opinion, represents a margin
emergency situation that threatened public health. The
that is fair or even slightly below the average for
Portuguese Government’s objective was therefore to
economic activities. The Portuguese authorities have
allow measures to be immediately introduced until
provided examples showing how the parameters used
operators could arrange to carry out these tasks them
to calculate the prices set in the orders were applied.
selves, while remaining under state control. Portugal
takes the view that the protection of public health is a
legal priority above all others, which justifies an
exemption from State aid rules.
(64) In conclusion, the Portuguese State considers that the aid
granted can be declared compatible because a derogation
from the polluter pays principle is applicable, because the
(60) According to the Portuguese authorities, the adoption of
aid corresponds to the cost of the services provided, and
Decision 98/653/EC and its successive extensions
because the guidelines applicable at the time (Community
prevented the measures adopted by the Portuguese
guidelines for State aid concerning TSE tests, fallen stock and
State to deal with the BSE crisis from producing any
slaughterhouse waste ( 19 )) authorised aid of up to 100 % of
distortion in the market and therefore from hindering
the actual costs, as this was short term.
trade between Member States. Portugal points out that,
as there was a ban on the dispatch of these products,
there was no trade, which meant that there could be no
distortion of competition.
(65) From October 2002, the legal basis for paying the charge
became Decree-Law No
197/2002. The Portuguese
authorities consider that the charges in question took
into account the prices to be paid for the operations
(61) First
of
all,
Portugal
indicates
that
no
aid
was
granted
in
carried out by the by-product processing units.
1998, providing as evidence the date of entry into force
However, given that the crisis was still ongoing, the
of Decree-Law No 393-B/98, which was 4 December
Portuguese authorities consider that the State’s inter
1998. It was only at that point that the Portuguese
vention as an intermediary was still justified.
State, on an exceptional and transitional basis, assumed
responsibility for the collection, processing and
destruction of these by-products.
(66) In the simulations carried out at the time, the full costs
borne by the undertakings and a reasonable profit were
(62) Following the entry into force of Decree-Law
taken into account. The Portuguese authorities have
No 393-B/98, the Portuguese State assumed the cost of
provided the worked example based on the costs and
the collection, processing and destruction of by-products
charges for 2003, which, in their opinion, proves the
until Decree-Law No 197/2002 entered into force. In this
balance between the revenue and charges resulting
respect, according to the Portuguese authorities, it should
from the new legal rules, and sets the charges required
be considered that the Portuguese State assumed respon
to finance the services.
sibility for these measures in the short term, as the
scheme was subsequently amended, and that the charge
was introduced as a way of making the sector finance the
collection, transportation, processing and destruction of
mammalian meat and poultrymeat by-products, including
(67) The
Portuguese
authorities
also
state
that
the
services
of
specified risk materials (SRM).
collection, transportation, processing and destruction of
poultrymeat by-products were not financed from the
charges imposed on slaughterhouses and importers of
bovine and pig carcasses, half-carcasses and other bone-
(63) With regard to the cost of these measures, the Portuguese
in parts. The Portuguese authorities point out that the
authorities indicate that the parameters used to calculate
provisions of Article 2(1) of Decree-Law No 197/2002
the compensation were established beforehand by an
must be interpreted in light of the provisions of Annex
order published in the Diário da República. The Portuguese
1, to which they refer, with the result that the services of
authorities refer to three orders (
collection, transportation, processing and destruction of

18 ), which indicate the
prices of the services (collection, transportation,
meat by-products were financed by three types of
processing and bagging in big bags, per kilogram of
operator: beef, pig, sheep/goat, poultry and other slaught
product). The cost of these operations to be borne by
erhouses; importers of bovine and pig carcasses, half-
animal by-product processing units not attached to
carcasses and other bone-in parts; and intra-Community
slaughterhouses was taken into account. Overheads,
operators in the same products. Accordingly, Annex 1
such as energy, fuel, wage, insurance and other costs,
contains a column indicating the charges to be imposed
were also taken into account. These parameters were
on poultry slaughterhouses not collecting, transporting,
the same for all service-providers. The Portuguese
processing and destroying by-products generated during
the slaughter of poultry, bearing in mind that most
imported poultry carcasses do not generate by-products.
( 18 ) Joint Order No
96/99 of 25 January 1999; Joint Order
No 324/2001 of 6 April 2001; and Joint Order No 124/2002 of
19 February 2002.
( 19 ) OJ C 324, 24.12.2002, p. 2.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/21
(68) The
Portuguese
authorities
also
state
that
the
difference
(74) As
a
preliminary
point,
ETSA
notes
the
context
of
the
between the two charges set in Annex 2 to Decree-Law
BSE crisis, which forced the Portuguese State to adopt a
No 197/2002 was justified by the costs associated with
number of preventive measures (specifically the
the by-products generated in cutting plants.
collection, transportation, processing and destruction of
Category 1, 2 and 3 animal by-products) to combat and
reduce the risk of infection by BSE, so as to protect
public health and the environment. These measures
(69) The
Portuguese
authorities
state
that,
in
accordance
with
were largely adopted as a result of obligations laid
Decree-Laws No 197/2002 and No 244/2003, it was not
down in Community legislation.
intended that the charges should have an impact on
livestock farmers, although the costs of the collection,
transportation, processing and destruction operations
(75) Between
1998
and
2005,
INGA
contracted
ITS
and
did in fact impact on the whole meat sector. To that
SEBOL, through a direct award procedure, to provide
end, the Portuguese authorities have provided two
services of collection, transportation, processing and
service invoices dated 22 October 2002 and
destruction of waste. ETSA notes that all the under
28 October 2003, which, in their opinion, prove that
takings capable of providing the required services were
the costs of the collection, transportation, processing
contracted under the same conditions. Up to 10 October
and destruction operations were passed on by slaughter
2002, INGA contracted undertakings licensed to provide
houses to livestock farmers.
this type of service and bore the resulting costs, as laid
down in Article 6 of Decree-Law No 393-B/98. The
parameters used to calculate the price to be paid for
the service were established by Joint Order No 96/99.
(70) Finally,
the
Portuguese
authorities
give
an
assurance
that
The price was set in proportion to the weight of raw
no resources were diverted to any competing activities by
material and could be revised in the light of changes to
the service-providers, given that the latter’s sole activity
the service provision conditions. The price paid to SEBOL
was the collection, transportation, processing and
and ITS took account of the estimated costs of providing
destruction of animal by-products.
the service, particularly those associated with the weight
and volume of waste to be collected and treated and with
the operational establishment and management of the
system for collecting fallen stock from holdings, which,
for example, meant collection within a short period of
(71) The
Portuguese
authorities
also
indicate
that
the
transi
tional scheme set up by Decree-Law No 244/2003
time after notification of the animal’s death.
expired in November 2005 and that, since then,
entities generating by-products have fully assumed the
responsibility that the State initially assumed on a
(76) ETSA
points
out
that,
although
the
service
was
not
temporary basis, in its place. Since November 2005, all
awarded through a public procurement procedure, the
costs have been borne by operators, which offset these
price paid for the service provided covered the respective
through waste recovery, conversion into biofuels and
costs, taking into account the relevant receipts, and only
export of meal.
allowed a reasonable and legitimate profit to be made. It
also notes that the level of remuneration for the service
was always, in its opinion, in line with the principle of
efficiency, as the price paid by INGA was within the
(72) In
conclusion,
the
Portuguese
authorities
consider
that
European average of prices for equivalent services, and
the conditions laid down in the applicable guidelines
the prices paid until 2005 were actually, according to
were met, given that the operators generating by-
ETSA, lower than the prices subsequently applied in
products started to gradually pay for the operations
the contracts for the provision of the same services,
associated with the destruction of these by-products
concluded following public procurement procedures
through a charge.
intended to help define the remuneration in line with
market criteria.
IV. COMMENTS OF OTHER INTERESTED PARTIES
(77) From
2005
the
service
contracts
were
awarded
through
international public procurement procedures. Three
(73) ETSA
submitted
its
comments
by
letter
of
15
June
2009.
public procurement procedures were organised: beef/
The ETSA group consists of the following undertakings:
equine at national level; sheep/goats (South) and
ITS — Indústria Transformadora de Subprodutos
sheep/goats (North). ITS took part in these public
Animais, SA and SEBOL — Comércio e Indústria de
procurement procedures as part of a consortium which
Sebo, SA. These undertakings provide services of
was awarded the contract. Three service provision
collection, transportation, processing and destruction of
contracts were concluded for the three lots mentioned.
Category 1, 2 and 3 animal by-products in Portugal and
ETSA indicates that the conditions included the
are among the undertakings which the Portuguese State
collection, transportation, processing and destruction of
used to provide the services in question during the period
waste, as well as keeping a permanent and up-to-date
concerned. Consequently, ETSA is regarded as a recipient
register and archive on the operations. The Instituto de
of the state payments and may therefore be deemed an
Financiamento da Agricultura e Pescas — IFAP I.P. was
interested party in Case C 3/09.
responsible for ensuring compliance with the obligations.

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L 274/22
EN
Official Journal of the European Union
19.10.2011
(78) ETSA points out that the contracts concluded established
markets and on specific provisions for certain agricultural
the prices beforehand in an objective and transparent
products (Single CMO Regulation) ( 28 ) repealed these
manner, according to the tonnage and species of
various regulations and provides, in Article 180
animal in question. In its opinion, the prices were set
thereof, that the State aid rules apply to the aforemen
according to market conditions and ensured adequate
tioned products.
coverage of the costs incurred in order to comply with
the public service obligations, as listed in the service
provision contracts and relevant legislation.
(82) The nature of the aid must be determined in light of all
the beneficiaries of the services of collection, transpor
tation, processing and destruction of slaughterhouse
(79) ETSA
concludes
that,
given
the
above,
it
did
not
benefit
waste and their financing. The Commission has identified
from any illegal aid and that all the funds received were
the following categories of potential beneficiaries of the
simply legitimate consideration for the provision of a
scheme introduced in Portugal:
public service.
— undertakings providing the services of collection,
transportation, processing and destruction of the
V. ASSESSMENT
material in question,
1. EXISTENCE OF AID UNDER ARTICLE 107(1) TFEU
(80) Under
Article
107(1)
TFEU,
save
as
otherwise
provided
in
— slaughterhouses and cutting plants, importers of
the Treaties, any aid granted by a Member State or
bone-in beef, veal, pigmeat and poultrymeat, and
through State resources in any form whatsoever which
intra-Community operators, i.e. bone-in beef, veal
distorts or threatens to distort competition by favouring
and pigmeat operators/receivers,
certain undertakings or the production of certain goods
are, in so far as it affects trade between Member States,
incompatible with the internal market.
— livestock farmers.
(81) Articles 107 to 109 TFEU apply to the pigmeat sector
(83) In
order to assess the potential aid over time, the
pursuant to Article 21 of Council Regulation (EEC)
Commission identified four periods in its decision to
No 2759/75 of 29 October 1975 on the common
initiate the procedure, taking into account the application
organisation of the market in pigmeat ( 20 ), as last
of the various Community provisions relevant to the
amended by Council Regulation (EC) No 1913/2005 ( 21 ).
analysis of potential aid measures. The Commission
These articles apply to the beef and veal sectors pursuant
identified: the period from 1998 to 31 December
to Article 40 of Council Regulation (EC) No 1254/1999
1999, which was the period preceding the entry into
of 17 May 1999 on the common organisation of the
force of the guidelines for State aid in the agriculture
market in beef and veal ( 22 ), as last amended by Council
sector; the period from 1 January 2000 to
Regulation (EC) No 1152/2007 ( 23 ). Before the latter was
31 December 2002, which was the period preceding
adopted, these articles applied to this sector pursuant to
the entry into force of the Community guidelines for
Article 24 of Council Regulation (EEC) No 805/68 ( 24 ).
State aid concerning TSE tests, fallen stock and slaught
They apply to the sheepmeat and goatmeat sectors
erhouse waste; the period from 1 January 2003 to
pursuant to Article 22 of Council Regulation (EC)
31 December 2006, which was the period preceding
No 2467/98 of 3 November 1998 on the common
the entry into force of the new Community guidelines
organisation of the market in sheepmeat and
for State aid in the agriculture and forestry sector 2007
goatmeat ( 25 ), as last amended by Regulation (EC)
to 2013 ( 29 ); and the period from 1 January 2007 to the
No 1913/2005. They apply to the poultrymeat sector
present.
pursuant to Article 19 of Council Regulation (EEC)
No 2777/75 of 29 October 1975 on the common
organisation of the market in poultrymeat ( 26 ), as last
(84) Given
the
new
information
provided
by
the
Portuguese
amended by Council Regulation (EC) No 679/2006 ( 27 ).
authorities, particularly on the application of Decree-Law
Council Regulation (EC) No 1234/2007 of 22 October
No 244/2003, as described above, and on the various
2007 establishing a common organisation of agricultural
methods of financing the potential aid, the Commission
will slightly alter the division of these periods and will
( 20 ) OJ L 282, 1.11.1975, p. 1; Portuguese special edition: Chapter 03
therefore take account of the following periods in its
Volume 9 p. 86.
assessment of each group of potential beneficiaries:
( 21 ) OJ L 307, 25.11.2005, p. 2.
( 22 ) OJ L 160, 26.6.1999, p. 21.
( 23 ) OJ L 258, 4.10.2007, p. 3.
( 24 ) OJ L 148, 28.6.1968, p. 24; Portuguese special edition: Chapter 03
— period between 9 December 1998 and 9 October
Volume 2 p. 157; English special edition: Series I Chapter 1968(I)
2002, during which Decree-Law No 393-B/98 was
p. 187.
in force,
( 25 ) OJ L 312, 20.11.1998, p. 1.
( 26 ) OJ L 282, 1.11.1975, p. 77; Portuguese special edition: Chapter 03
Volume 9 p. 151.
( 28 ) OJ L 299, 16.11.2007, p. 1.
( 27 ) OJ L 119, 4.5.2006, p. 1.
( 29 ) OJ C 319, 27.12.2006, p. 1.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/23
— period between 10 October 2002 and 21 October
(89) It is clear from the Court of Justice judgment in the
2003, during which Decree-Law No 197/2002 was in
Altmark case ( 32 ) that public subsidies intended to allow
force, except for Annex 2, the application of which
the operation of public services do not fall within
was extended under the transitional scheme laid
Article 107 TFEU, given that they must be regarded as
down in Decree-Law No 244/2003,
compensation for the services provided by the recipient
undertakings in order to discharge public service obli
gations. However, the Court requires the following
conditions to be satisfied:
— period between 22 October 2003 and November
2005, during which the transitional scheme laid
down in Decree-Law No 244/2003 was in force.
— first, the recipient undertaking is actually required to
discharge public service obligations and those obli
gations have been clearly defined,
1.1. EXISTENCE OF A SELECTIVE ADVANTAGE
(85) According
to
settled
case-law
of
the
Court
of
Justice,
measures which, whatever their form, are likely directly
— second, the parameters on the basis of which the
or indirectly to favour certain undertakings or are to be
compensation is calculated have been established
regarded as an economic advantage which the recipient
beforehand in an objective and transparent manner,
undertaking would not have obtained under normal
market conditions are regarded as aid ( 30 ). In addition,
measures which, in various forms, mitigate the charges
which are normally included in the budget of an under
— third, the compensation does not exceed what is
taking and which, without therefore being subsidies in
necessary to cover all or part of the costs incurred
the strict meaning of the word, are similar in character
in discharging the public service obligations, taking
and have the same effect, are considered to constitute
into account the relevant receipts and a reasonable
aid ( 31 ).
profit for discharging those obligations,
1.1.1. Selective advantage for service-providers
— fourth, where the undertaking which is to discharge
public service obligations is not chosen in a public
(86) The
Commission
considers
that
the
activity
of
collection,
procurement procedure, the level of compensation
transportation, processing and destruction of the material
needed has been determined on the basis of an
in question is an economic activity, as it constitutes a
analysis of the costs which a typical undertaking,
service provision in return for remuneration and may be
well run and adequately equipped so as to be able
carried out by numerous economic operators on the
to meet the necessary public service requirements,
Community market. This conclusion is based, in
would have incurred in discharging those obligations,
particular, on the information provided by ETSA, as
taking into account the relevant receipts and a
summarised in recital 73 et seq. of this Decision.
reasonable profit for discharging the obligations.
(87) With
regard
to
this
economic
activity,
the
Portuguese
(90) Applying
the
judgment
in Altmark to the present case
authorities argue that the service-providers in question
leads the Commission to consider the following:
carried out a public service mission in the general
interest, justified by reasons of public health and envi
ronmental protection. In this context, the Portuguese
authorities stress the country’s specific situation in
(a) Genuine service of general economic interest, as
relation to the BSE crisis. Portugal therefore insists that
defined in Article 106(2) TFEU
all the measures taken were aimed at dealing with an
emergency situation that threatened public health. The
(91) To
start
with,
it
must
be
examined
whether
the
present
Portuguese Government’s objective was therefore to
case involves a genuine service of general economic
allow measures to be immediately introduced until
interest, as defined in Article 106(2) TFEU.
operators could arrange to carry out these tasks them
selves, while remaining under state control (see recitals
21 and 59 of this Decision).
(92) It is clear from the case-law of the Court of Justice that,
with the exception of the sectors in which there are
Community rules governing the matter, Member States
(88) In
its
comments,
ETSA
considers
that
it
did
not
benefit
have a wide margin of discretion regarding the nature of
from any illegal aid and that all the funds received were
services that could be qualified as being services of
simply the legitimate consideration for the provision of a
general economic interest. Thus, the Commission’s task
public service (see recital 79 of this Decision).
is to ensure that this margin of discretion is applied
without manifest error as regards the definition of
services of general economic interest.
( 30 ) Altmark judgment, paragraph 84.
( 31 ) Judgment in Case C-355/00 Freskot AE v Elliniko Dimosio [2003]
ECR I-5263, paragraph 83.
( 32 ) Altmark judgment, paragraph 88 et seq.

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L 274/24
EN
Official Journal of the European Union
19.10.2011
(93) Since the 1990s, the occurrence of various transmissible
processing and destruction of animal by-products unfit
spongiform encephalopathies (TSEs) has been detected
for consumption, would select the undertakings to
separately in humans and animals. Since 1996,
provide this service. Joint Order No 95/99 established
evidence has been gathered pointing to the similarity
beforehand the parameters used to calculate the remun
between BSE agents and the new variant of Creutzfeldt-
eration for the public service, together with other obli
Jakob disease. Since 1990, the European Community has
gations associated with the service provision, such as the
adopted a number of measures aimed at protecting
obligation for the undertaking to collect all by-products
public and animal health from the risk of BSE. These
generated in the national territory in accordance with the
measures are based on the safeguard provisions of the
health and technical rules laid down by law.
directives on animal health and environmental measures.
Pursuant to Decision 2000/766/EC, Member States had
to ensure that animal waste, as defined by Directive
90/667/EEC ( 33 ) was collected, transported, processed,
stored or disposed of in accordance with that Directive,
with Commission Decision 97/735/EC (
(96) The
Portuguese
authorities
maintain
that
the
obligations

34 ) and with
Council Decision 1999/534/EC (
of the service-providers were clearly defined in the service

35 ). In that respect, Regu
lation (EC) No
1774/2002 laid down health rules
contracts. By way of example, they have provided the
concerning animal by-products not intended for human
Commission with a service provision contract from
consumption, and required Member States to ensure that
2003, concluded on the basis of Decree-Law
adequate arrangements were in place and that a sufficient
No 393-B/98.
infrastructure existed to collect, transport and destroy
animal by-products.
(97) The Commission notes that the obligations of the
service-provider are clearly defined in the service
(94) Given
that
the
Court
of
Justice
has
recognised
that
the
provision contract submitted by the Portuguese
management of particular waste may form the subject of
authorities. In view of the provisions of Decree-Law
a service of general economic interest (
No 393-B/98 and the Joint Order, as also the model

36 ), and bearing in
mind the specific situation of the BSE crisis as indicated
service provision contract submitted, the Commission
above, the Commission has no objection to the
concludes that the first condition of the Altmark
Portuguese authorities attributing the nature of services
judgment is satisfied.
of general economic interest to this activity of collecting
and subsequently destroying carcasses and other animal
waste unfit for consumption from 1999 to 2005, during
which time the Portuguese State assumed full responsi
bility (from 1999 to 2003) and partial responsibility
(c) Parameters established beforehand in an objective
(from 2003 to 2005) for these operations. That
and transparent manner
decision was justified on grounds of public health and
environmental protection, and is therefore covered by the
(98) With regard to the second condition, the Commission
concept of general economic interest, as defined in
considers — based on the available information — that
Article 106(2) TFEU.
the parameters used to calculate the compensation were
established beforehand in an objective and transparent
manner. The Joint Orders submitted by the Portuguese
authorities define the calculation method and eligible
expenditure (see recital 26 of this Decision). These
figures were periodically checked based on previous
(b) Discharge of the public service obligation
years. From 2005, public procurement procedures were
(95) The Altmark judgment requires a mandate in the form of
organised. Based on the available information, the
one or more official acts with binding legal force under
Commission considers that the second condition of the
national law. With regard to the first condition imposed
Altmark judgment is satisfied.
by the Altmark judgment, it is confirmed that Decree-
Laws No
393-B/98 and No 244/2003 required the
collection, transportation, processing and destruction of
animal by-products unfit for human consumption.
Article 6 of Decree-Law No 393-B/98 provided that
(d) Compensation necessary to cover the service
INGA, which was responsible for the collection,
costs
( 33 ) OJ L 363, 27.12.1990, p. 51.
(99) With regard to the third condition, the Portuguese
( 34 ) OJ L 294, 28.10.1997, p. 7.
authorities and the interested party state that the
( 35 ) OJ L 204, 4.8.1999, p. 37.
compensation did not exceed what was necessary to
( 36 ) Judgment in Case C-209/98 Entreprenrforeningens Affalds/Milj
cover all or part of the costs incurred in discharging
sektion (FFAD) v Kbenhavns Kommune [2000] ECR I-3743,
the public service obligations, taking into account the
paragraph 75; see also the judgment in Case C-126/01 Ministère
de l’conomie, des Finances et de l’Industrie v GEMO SA [2003] ECR
relevant receipts and a reasonable profit for discharging
I-13769, paragraph 21.
those obligations.

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/25
(100) On several occasions, particularly when it initiated the
(107) The Commission is therefore obliged to conclude that
examination procedure, the Commission asked the
not all (four) criteria in the Altmark judgment are
Portuguese authorities to provide information on the
satisfied in the present case, and that it cannot rule out
method used to calculate the actual economic cost of
the possibility that there was an advantage for the
the services. The Portuguese authorities have provided
service-providers in the period between the entry into
documents showing the annual expenditure of the
force of Decree-Law No 393-B/98 and the end of the
service-providers with regard to 1999 to 2005, and
transitional scheme introduced by Decree-Law
have compared these figures with what INGA paid
No 244/2003, which expired in 2005.
providers for performing these services. The documents
in question show that the compensation paid by INGA
to the service-providers did not exceed what was
necessary to cover all or part of the costs incurred in
(108) The public payments were made to specific undertakings,
performing the service. The documents received show
i.e. to undertakings entrusted with the service. As a result,
that the compensation also takes into account a profit
it can be considered that the measure in question is
of between 30 % and 39,5 %, depending on the year
specific.
(see recital 62 of this Decision).
(101) The Portuguese authorities have given an assurance that
(109) The Commission therefore concludes that it cannot rule
the resources could not have been diverted to competing
out the possibility that there was a selective advantage for
activities in which the undertakings may have been
the service-providers in the period between 1998 and the
engaged (cross-subsidies) because the service-providers
end of the transitional scheme introduced by Decree-Law
chosen were not engaged in other activities.
No 244/2003, which expired in 2005.
(102) However, based on the information provided by the
1.1.2. Selective advantage for slaughterhouses and
Portuguese authorities, the Commission considers that
cutting plants, importers of bone-in beef, veal,
it is unable to conclude that the profit taken into
pigmeat and poultrymeat, and intra-Community
account was ‘reasonable’ as defined by the Altmark
operators, i.e. bone-in beef, veal and pigmeat
judgment.
operators/receivers
(110) According to the Court of Justice judgment in the GEMO
case ( 37 ), the fact that the service for the collection and
(103) In its comments, ETSA has confirmed that the remun
disposal of animal carcasses and waste available to
eration received for the service provision adequately
farmers and slaughterhouses is carried out by private
reflected the costs incurred, allowing a profit margin
undertakings cannot call into question any classification
which did not result in any particular advantage, and
as State aid as the organisation of that service originates
that, in the period prior to 2005, the level of remun
with the public authorities.
eration for providing the public service corresponded to

the European average and was below the level of remun
eration established in the public service contract awarded
through the public procurement procedure.
(111) In the present case, the rules governing the service and its
financing originate from the Portuguese authorities, as
laid down in Decree-Laws No 393-B/98, No 197/2002
(104) With regard to this information, the Commission notes
and No 244/2003. In that respect, the Commission
that neither the Portuguese authorities nor the interested
therefore concludes that the system in question can be
party have provided supporting documents.
imputed to the State.
(105) As a result, the Commission cannot conclude that the
third condition of the Altmark judgment is satisfied in the
(112) In the GEMO judgment, the Court of Justice stated that
present case.
the financial cost incurred in the disposal of animal
carcasses and slaughterhouse waste must be considered
to be an inherent cost of the economic activities of
farmers and slaughterhouses ( 38 ). The Court therefore
(e) Analysis of the costs of a typical undertaking
concluded that Article 107(1) TFEU must be interpreted
as meaning that a system which provides farmers and
(106) Given that, prior to 2005, the service-providers were not
slaughterhouses with the free collection and disposal of
selected through a public procurement procedure, the
animal carcasses and slaughterhouse waste must be clas
Altmark judgment requires a comparative analysis with
sified as State aid in favour of farmers and slaughter
the costs of a typical undertaking. The Portuguese
houses.
authorities have not provided any evidence that the
costs have been assessed based on an analysis of the
( 37 ) GEMO judgment, paragraph 26.
costs of a typical undertaking.
( 38 ) GEMO judgment, paragraph 31.

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L 274/26
EN
Official Journal of the European Union
19.10.2011
Period between 9 December 1998 and 9 October
charges set in Annexes 1 and 2 to Decree-Law
2002, prior to the entry into force of Decree-Law
No 197/2002, as also the charge laid down in
No 197/2002
Article 2(2) on SRM, were calculated based on the
actual cost of the services to be provided, bearing in
(113) In the present case, the disposal of animal carcasses and
mind the nature and importance of the by-products
slaughterhouse waste can be considered as an inherent
generated by each animal species.
cost of the activity, not only for slaughterhouses and
cutting plants, but also for importers of bone-in beef,
veal, pigmeat and poultrymeat, and bone-in beef, veal
and pigmeat operators/receivers. The Commission
(118) According to the Portuguese authorities, this charge
considers that this financing of the costs of collection,
formed, in all respects, the compensation payable by
processing and destruction of mammalian meat and
users for the provision of a public service of general
poultrymeat by-products through state budget appro
interest. The amounts paid by operators liable for the
priations prior to the entry into force of Decree-Law
charge were not fixed, but were directly proportional
No 197/2002 resulted in the users of this service being
to the quantities of waste actually delivered to the
exempt from a charge inherent in their activity.
public service and to the actual cost of disposing of
this waste.
(114) The Commission concludes that there was an advantage
in the period prior to the application of the parafiscal
(119) In support of these assertions, the Portuguese authorities
charge.
have provided documents containing figures for 2003, in
which the actual economic costs of the services provided
are compared with the contributions resulting from the
corresponding charge. The Portuguese authorities have
not provided any documents containing figures for the
Period between 10 October 2002 and November
revenue from the charge levied during the remainder of
2005
2002, after the entry into force of Decree-Law
(115) With regard to the period after the entry into force of
No 197/2002 in October of that year.
Decree-Law No
197/2002 and Decree-Law
No 244/2003, the activities described above were
financed through a parafiscal charge introduced by
Decree-Law No 197/2002 and amended by Decree-Law
(120) With regard to 2004 and 2005, the Portuguese
No 244/2003. According to the rules of Decree-Law
authorities have provided documents containing figures
No 197/2002, the following were exempt from paying
for the cost of the operations carried out, but not for the
this charge: slaughterhouses collecting, transporting,
revenue from the charge imposed on those operators
processing and destroying all by-products generated
whose respective destruction and use plan had not
either in the slaughterhouse itself or in cutting plants,
been approved, and who for this reason had to
with the exception of SRM, given that these units were
continue paying the charge laid down by the transitional
in a position to independently treat their own by-
scheme introduced by Decree-Law No 244/2003.
products (see Annex 2, paragraph 2, to Decree-Law
No 197/2002); and boned meat importers and intra-
Community operators, given that they did not generate
by-products subject to the compulsory treatment laid
(121) With regard to 2002, 2004 and 2005, the Commission
down in the Community and national legislation.
cannot, from the documents provided by the Portuguese
Decree-Law No 244/2003 provided for the exemption
authorities, conclude that the contributions from those
of these operators through the approval of a destruction
liable for the charge were directly proportional to the
or use plan in accordance with the specific conditions
quantities of waste actually delivered to the collection
required for the various categories of material.
service and to the actual cost of destroying this waste.
(122) With regard to 2003, the Commission concludes that
(116) In order to determine whether there was any advantage
there was no advantage, given that the contributions
for slaughterhouses and cutting plants, importers of
from those liable for the charge were directly propor
bone-in beef, veal, pigmeat and poultrymeat, and intra-
tional to the cost of the services received.
Community operators, i.e. bone-in beef, veal and pigmeat
operators/receivers liable for the charge, it must be
determined to what extent the contribution by way of
the charge corresponds to the actual economic cost of
the services provided by the collection service.
(123) However, the Commission cannot rule out the possibility

that there was some advantage for slaughterhouses and
cutting plants, importers of bone-in beef, veal, pigmeat
and poultrymeat, and intra-Community operators, i.e.
bone-in beef, veal and pigmeat operators/receivers liable
(117) The Commission notes that the Portuguese authorities
for the charge, from October 2002 until 1 January 2003
state, in their letter of 20 January 2003, that the
and also in 2004 and 2005.

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1.1.3. Selective advantage for livestock farmers
1.2. ADVANTAGES FINANCED THROUGH STATE
RESOURCES
Period between 9 December 1998 and 9 October
2002, prior to the entry into force of Decree-Law
(129) Article 107(1) TFEU concerns aid granted by Member
No 197/2002
States or through State resources. In other words, the
aid measure in question must be imputable to the State
(124) In the present case, the disposal of animal carcasses and
and be granted through State resources.
slaughterhouse waste can be considered as an inherent
cost of the activity, not only for slaughterhouses and
cutting plants, but also for livestock farmers who,
under market laws, should bear at least part of the cost
associated with these services. In accordance with the
(130) In the present case, the cost of the collection, processing
GEMO judgment, the Commission takes the view that
and destruction of mammalian meat and poultrymeat by-
this financing of the costs of collection, processing and
products was financed through direct State revenue
destruction of mammalian meat and poultrymeat by-
between 1999 and October 2002, and by revenue
products through state budget appropriations prior to
from a parafiscal charge imposed on slaughterhouses,
the entry into force of Decree-Law No
197/2002
importers of bone-in beef, veal and pigmeat, and intra-
resulted in the users of this service being exempt from
Community operators, i.e. bone-in beef, veal and pigmeat
a charge inherent in their activity.
operators/receivers, from October 2002.
(125) The Commission concludes that there was an advantage
in the period prior to the application of the parafiscal
(131) Payments to service-providers made from direct State
charge.
revenue are advantages financed through State resources.
The fact that, from 1999 until the application of the
charge in 2002, this public service was financed
Period between 10 October 2002 and November
through the State budget means that the undertakings
2005
providing the service benefited from public funds to
cover the costs of this service.
(126) As indicated, the measures adopted by the Portuguese
authorities in order to collect, transport, process and
destroy mammalian meat and poultrymeat by-products
could have exempted livestock farmers from costs that,
under normal circumstances, they should have partly
(132) The charges imposed between September 2002 and
borne. It is clear from Decree-Law No 197/2002 and
November 2005 are not covered by the scope of the
from the transitional scheme introduced by Decree-Law
TFEU provisions on State aid, unless they form the
No 244/2003 that livestock farmers are not liable for the
method of financing an aid measure and therefore
charge in question. The Portuguese authorities state that,
form an integral part of this aid ( 39 ).
prior to the end of 2005, the collection costs were
passed on to the whole sector. The Commission notes
that the two invoices submitted by the Portuguese
authorities do indicate that the charge based on
Decree-Law No 197/2002 and Decree-Law No 244/2003
(133) The charges were paid to INGA using a reverse charge
was passed on by one of the slaughterhouses in October
procedure. The charges imposed on operators formed
2002 and October 2003. The assertion by the
INGA’s revenue and were paid directly to it.
Portuguese authorities that, in accordance with market
laws, the costs were passed on to the whole sector,
including livestock farmers, is corroborated by the
documents submitted. The Commission therefore
(134) For a charge to be regarded as forming an integral part of
concludes that livestock farmers bore the costs corre
an aid measure, it must be hypothecated to the aid
sponding to their activity and did not therefore benefit
measure under the relevant national rules, in the sense
from any specific advantage.
that the revenue from the charge is necessarily allocated
for the financing of the aid ( 40 ).
(127) The Commission considers that livestock farmers only
benefited from an advantage in the period prior to the
application of the charge.
(135) Given that the charges formed INGA’s revenue and were
paid directly to it, the Commission considers that they
(128) Based on the above, the Commission concludes that
formed an integral part of the aid measure.
there was an advantage, in respect of the collection,
transportation, processing and destruction of animal
( 39 ) Judgment in Joined Cases C-261/01 and C-262/01 Belgische Staat v
by-products, in favour of slaughterhouses and importers
Eugène van Calster and Felix Cleeren and Openbaar Slachthuis NV
during all the periods, except for 2003. In the case of
[2003] ECR I-12272, paragraph 51.
( 40 ) Judgment of 13 January 2005 in Case C-174/02 Streekgewest
livestock farmers, this advantage existed only during the
Westelijk Noord-Brabant v Staatssecretaris van Financin [2005] ECR
period prior to the application of the charge.
I-85, paragraph 26.

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(136) With regard to the issue of whether or not the revenue
has decisive control over the methods of financing the
from the parafiscal charge in the present case can be
aid measure, the Commission considers that the revenue
regarded as State resources, it is worth noting that, in
from the parafiscal charge does in fact constitute State
terms of State resources, there is no distinction between
resources imputable to the State.
cases in which the aid is granted directly by the State and
those in which it is granted through a public or private
body designated or set up by that State. On 15 July 2004
the Court of Justice, in its judgment in Pearle and
1.3. DISTORTION OF COMPETITION AND EFFECT ON
Others ( 41 ), found that compulsory contributions
TRADE
collected by an intermediary body from all undertakings
in a given business sector are not regarded as State
(140) According to the case-law of the Court of Justice,
resources only if the following four conditions are
strengthening the competitive position of an undertaking
satisfied:
through the granting of State aid generally distorts
competition with other competing undertakings not
having benefited from this aid ( 42 ).
(a) the measure in question is implemented by the
professional body representing undertakings and
workers in a business sector and does not serve as
(141) The measure may have an effect on Portugal’s position in
an instrument for applying policies defined by the
the meat sector (
State;

43 ). As Portuguese undertakings operate
in a highly competitive international market, the measure
distorts or threatens to distort competition. The measure
may also affect trade between Member States.
(b) the objectives of the measure in question are financed
entirely by the contributions from undertakings in
the sector;
(142) The Portuguese authorities have argued that, due to the
ban on the dispatch, in particular, of live cattle and meat-
(c) the method of financing and the percentage/amount
and-bone meal, as such or incorporated in other
of the contributions are decided by the represen
products, there was no trade, which means that there
tatives of employers and employees within the
could not have been any distortion of competition.
professional body for the sector, without interference
from the State;
(143) In this respect, it should be recalled that, in accordance
with settled case-law ( 44 ), an aid may be of such a kind as
(d) the contributions must be used to fund the measure,
to affect trade between Member States and distort
without any possibility of intervention by the State.
competition even if the recipient undertaking, which is
in competition with producers in other Member States,
does not itself export its products. Where a Member State
(137) The available information indicates that the first
grants aid to an undertaking, internal supply may thereby
condition of the judgment in Pearle and Others is not
be maintained or increased, with the consequence that
satisfied, as the measure was laid down by a decree-law
the opportunities for undertakings established in other
in order to apply a policy defined by the State, which
Member States to offer their services to the market of
aims to combat BSE.
that Member State are reduced.
(138) In addition, the third and fourth conditions are not
(144) As a result, the Commission considers that the fact that
satisfied, given that the method of financing is
the dispatch of the aforementioned products from
regulated by the abovementioned decree-laws. As a
Portugal to other Member States was prohibited does
result, the Portuguese authorities have the opportunity
not alter the fact that the aid may be such as to
to intervene in determining the methods of financing
distort competition or affect trade.
the measure.
( 42 ) Judgment in Case 730/79 Philip Morris Holland BV v Commission of
the European Communities [1980] ECR 2671, paragraphs 11 and 12.
(139) As not all the conditions laid down in the judgment in
( 43 ) Beef production figures in the EU-15 were 7 691 101 tonnes in
Pearle and Others are satisfied and as the Portuguese State
1999 and 7 466 476 tonnes in 2002, of which 95 765 tonnes in
1999 and 105 019 tonnes in 2002 were produced by Portugal.
Pigmeat production figures in the EU-15 were 17 983 476 tonnes
( 41 ) Judgment in Case C-345/02 Pearle BV, Hans Prijs Optiek Franchise BV
in 1999 and 17 729 855 tonnes in 2002, of which 344 209
and Rinck Opticins BV v Hoofdbedrijfschap Ambachten [2004] ECR
tonnes in 1999 and 328 038 tonnes in 2002 were produced by
I-7139, paragraph 41; see also the judgment in Case T-136/05
Portugal (source: Eurostat).
EARL Salvat père & fils, Comité interprofessionnel des vins doux
( 44 ) Judgment in Case T-55/99 Confederación Espaola de Transporte de
naturels et vins de liqueur à appellations contrlées (CIVDN) and
Mercancías (CETM) v Commission of the European Communities [2000]
Comité national des interprofessions des vins à appellation d’origine
ECR II-3207, paragraph 86); judgment in Case C-303/88 Italian
(CNIV) v Commission of the European Communities [2007] ECR II-
Republic v Commission of the European Communities [1991] ECR
4063, paragraph 161 et seq.
I-1433, paragraph 27.

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1.4. CONCLUSIONS
the method of financing the aid ( 45 ). As indicated in
recital 135 of this Decision, the method of financing
(145) The Commission takes the view that the measure applied
the aid must be regarded as an integral part of the aid
by Decree-Laws No
393-B/98, No
197/2002 and
measure.
No 244/2003 with regard to the collection, transpor
tation, processing and destruction of animal by-
products constitutes State aid in favour of slaughter
houses and importers in the period during which
Decree-Law No 393-B/98 was in force and until the
3. EXAMINATION OF THE COMPATIBILITY OF THE AID
application of the transitional scheme introduced by
3.1. ANALYSIS IN LIGHT OF THE PROVISIONS APPLICABLE
Decree-Law No 244/2003. However, the year 2003 is
TO NON-NOTIFIED AID
excluded, as the Portuguese authorities have been able
to prove that there was no advantage.
3.1.1. Aid to service-providers
(a) Compatibility of the aid pursuant to
Article 106(2) TFEU
(146) With regard to livestock farmers, the Commission
considers that, in the period prior to the application of
(152) The prohibition laid down in Article 107(1) TFEU allows
the charge, the measure constitutes State aid under
for exceptions.
Article 107(1) TFEU.
(153) It is clear from the case-law of the Court of Justice that
(147) With regard to the service-providers, the Commission
concludes that it cannot rule out the possibility that
compensation for public services does not constitute
State aid existed in the period between the entry into
State aid, as defined in Article 107(1) TFEU, if certain
force of Decree-Law No 393-B/98 and the end of the
conditions are satisfied (see recital 89 of this Decision).
transitional scheme introduced by Decree-Law
However, if the compensation for public services does
No 244/2003, which expired in 2005.
not satisfy these conditions and if the general criteria
for applying Article 107(1) TFEU are met, such compen
sation constitutes State aid. However, this may be found
compatible with the TFEU, pursuant to Article 106(2) of
2. UNLAWFULNESS OF THE AID
the same Treaty, if it is necessary for the operation of
services of general economic interest and does not affect
(148) The Commission notes that Portugal did not notify, as
the development of trade to such an extent as would be
required by Article 108(3) TFEU, the aid measures
contrary to the interests of the Union. The Commission
granted from 1999 nor the schemes introduced by
has clarified the conditions that must be satisfied to
Decree-Laws
No 197/2002
and
No 244/2003.
achieve this balance. In its 2001 Communication on
Article 1(f) of Regulation (EC) No 659/1999 defines
services of general interest in Europe ( 46 ), the Commission
‘unlawful aid’ as new aid put into effect in contravention
clarified that it has to be ensured that any restrictions
of Article 93(3) of the Treaty.
to the rules of the EC Treaty and, in particular,
restrictions of competition and limitations of the
freedoms of the internal market do not exceed what is
necessary to guarantee effective fulfilment of the public
(149) As the measures implemented by Portugal contain
service mission. This means, in particular, that the
elements of State aid, it is concluded that these are
remuneration does not exceed the net extra costs of
new aid, not notified to the Commission, and are
the particular tasks entrusted to the undertaking in
therefore unlawful under the terms of the TFEU.
question. The Commission subsequently further clarified
these conditions, in the Community framework for State aid
in the form of public service compensation ( 47 ) and in its
Decision of 28 November 2005 on the application of
(150) The compatibility of any aid must be examined in two
Article 86(2) of the EC Treaty ( 48 ). With regard to calcu
stages: first, the Commission must examine the compati
lating the compensation, the Commission clarified that
bility of the aid granted to service-providers; second, it
the amount of this may not exceed what is necessary to
must examine the compatibility of any aid granted to
cover the costs incurred in discharging the public service
slaughterhouses and cutting plants, importers and intra-
obligations, taking into account the relevant receipts and
Community operators, and also livestock farmers.
a reasonable profit for discharging those obligations. The
reasonable profit may include, in particular, all or some
of the productivity gains achieved by the undertakings
concerned during an agreed limited period without
(151) This aid was financed from 2002 by a parafiscal charge
reducing the level of quality of the services entrusted to
and, where the financing is an integral part of the aid
the undertaking by the State.
measure, the Commission must examine both the actions
financed, i.e. the aid, and their financing. In fact, as found
by the Court of Justice, where the method of financing
( 45 ) Van Calster and Others judgment, paragraph 51.
aid through compulsory contributions in particular is an
( 46 ) Communication from the Commission — Services of general
interest in Europe (2001/C 17/04) (OJ C 17, 19.1.2001, p. 4).
integral part of the aid measure, the Commission’s exam
( 47 ) OJ C 297, 29.11.2005, p. 4.
ination of the latter must necessarily take into account
( 48 ) OJ L 312, 29.11.2005, p. 67.

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(154) Paragraph 18 of the Community framework for State aid in
intra-Community operators, i.e. bone-in beef, veal and
the form of public service compensation further clarifies that
pigmeat operators/receivers, where they do not carry
‘reasonable profit’ should be taken to mean a rate of
out these operations themselves.
return on own capital that takes account of the risk, or
absence of risk, incurred by the undertaking by virtue of
the intervention by the Member State, particularly if the
latter grants exclusive or special rights. This rate must
(159) According to point 23.3 of the Community Guidelines for
normally not exceed the average rate for the sector
State aid in the agriculture sector in the 2000-2006 period
concerned in recent years. In sectors where there is no
(hereinafter referred to as ‘the Guidelines’) ( 49 ) and the
undertaking comparable to the undertaking entrusted
Commission notice on the determination of the applicable
with the operation of the service of general economic
rules for the assessment of unlawful State aid ( 50 ), any
interest, a comparison may be made with undertakings
unlawful aid, as defined in Article 1(f) of Regulation
situated in other Member States, or if necessary, in other
(EC) No 659/1999, must be assessed in accordance
sectors, provided that the particular characteristics of
with the rules and guidelines applicable at the time
each sector are taken into account. In determining
when the aid was granted. In 2002 the Commission
what amounts to a reasonable profit, the Member State
adopted the Community guidelines for State aid concerning
may introduce incentive criteria relating, among other
TSE tests, fallen stock and slaughterhouse waste. These
things, to the quality of service provided and gains in
guidelines applied between 1 January 2003 and
productive efficiency.
31 December 2006 ( 51 ). Point 44 of the latter guidelines
establishes a derogation from the principle that unlawful
aid must be assessed in accordance with the rules
applicable at the time when it was granted, in particular
(155) As indicated in recital 99 et seq. of this Decision, the
Commission cannot, from the information provided by
for cases involving slaughterhouse waste. According to
the Portuguese authorities, conclude that the compen
point 47 of those guidelines, the Commission will
sation was calculated taking into account a reasonable
apply principles based on point 11.4 of the Guidelines
profit not exceeding the average rate for the sector.
to unlawful aid for slaughterhouse waste granted up to
The Commission services have asked the Portuguese
the end of 2002. As a result, point 47 of the TSE
authorities on several occasions to provide the
guidelines is the relevant legal basis for assessing the
necessary information so that they can determine, in
aid granted from 1999.
the present case, whether the conditions for the dero
gation laid down for State aid granted in the form of a
service of general economic interest were satisfied. The
information provided by the Portuguese authorities has
(160) In accordance with point 194(c) of the Community
never indicated whether any comparison with other
guidelines for State aid in the agriculture and forestry sector
undertakings has been made in order to determine the
2007 to 2013, from the entry into force of these
average rate for the sector in question.
guidelines on 1 January 2007, the Commission ceased

to apply the TSE guidelines, except for unlawful aid
granted before 1 January 2007, as referred to in point
43 et seq. of those same guidelines. As a result, point 47
(156) The Commission cannot therefore conclude that the aid
of the TSE guidelines continues to apply to unlawful aid
in favour of service-providers is compatible pursuant to
for slaughterhouse waste from 1 January 2003.
Article 106(2) TFEU.
(b) Compatibility of the aid pursuant to
(161) Point 47 of the TSE guidelines lays down a number of
Article 107(3)(c) TFEU
provisions on slaughterhouse waste.
(157) Pursuant to Article 107(3)(c) TFEU, aid intended to
facilitate the development of certain economic activities
or of certain economic areas may be regarded as
(162) According to point 47 of the TSE guidelines, with regard
compatible with the internal market, where such aid
to State aid for slaughterhouse waste, from January 2001
does not adversely affect trading conditions to an
the Commission took a number of individual Decisions
extent contrary to the common interest. In order to
authorising State aid of up to 100 % for the cost of
benefit from the derogation laid down in this
disposal of specified risk material, meat-and-bone meal,
subparagraph, the aid must contribute to the devel
and animal feed containing such products, which had to
opment of the sector in question.
be disposed of as a consequence of the new Community
legislation on TSEs. These Decisions were in particular
based on point 11.4 of the Guidelines, taking note of the
short-term character of these aids, and of the need to
(158) In the present case, the Portuguese authorities state that
respect the polluter pays principle in the long run. Excep
they assumed the total cost of the collection, processing
tionally, the Commission has accepted that such State aid
and destruction of mammalian meat and poultrymeat by-
products from 1999. Since October 2002, the cost of the
collection, transportation, processing and destruction of
( 49 ) OJ C 28, 1.2.2000, p. 2.
mammalian meat and poultrymeat by-products has been
( 50 ) OJ C 119, 22.5.2002, p. 22.
( 51 ) See point 194(c) of the Community guidelines for State aid in the
financed by revenue from a charge imposed on slaughter
agriculture and forestry sector 2007 to 2013 (OJ C 319, 27.12.2006,
houses, importers of bone-in beef, veal and pigmeat, and
p. 1).

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may also be granted to operators other than those active
(167) The Commission notes, in this respect, that Portugal has
in the production of live animals, for example slaughter
indicated that it assumed the total cost of the collection,
houses. For unlawful aid granted before the end of 2002,
processing and destruction of mammalian meat and
for comparable costs in relation to the new Community
poultrymeat by-products from 1999 until the end of
legislation on TSEs, and without prejudice to compliance
2002, in the context of the emergency measures
with other provisions of Community law, the
approved by the Commission through Decision
Commission will apply the same principles.
98/653/EC, which prohibits the export of meat meal,
bone meal and meat-and-bone meal of mammalian
origin. It should also be noted that the measures
prohibiting the dispatch of beef applied to Portugal
(163) Point 47 of the TSE guidelines notes that, exceptionally,
were not repealed until the adoption of Regulation (EC)
the Commission has accepted that such State aid may
No 1993/2004.
also be granted to operators other than those active in
the production of live animals, for example slaughter
houses. In the past, the Commission has decided that
this exception should also cover other undertakings
(168) The Commission also points out that, in accordance with
carrying out tasks strictly linked with the production of
points 33 and 34 of the TSE guidelines, undertakings
live animals, such as undertakings processing animal by-
were chosen and remunerated according to market prin
products.
ciples, in a non-discriminatory way (see recital 21 et seq.
of this Decision). Bearing in mind the urgency of the
measures to be taken, the Commission can, in the
present case, accept that the Portuguese authorities
(164) Based on point 11.4 of the Guidelines, the Commission
has authorised aid up to 100 % of actual costs incurred
chose service-providers in accordance with Decree-Law
in respect of measures such as health checks, tests and
No 197/99 of 8 June 1999 — which, according to the
other screening measures, purchase and administration of
information provided by those authorities, is the national
medicines and plant protection products, and cost of
instrument transposing Directive 97/52/EC — without
destruction of crops, provided that:
recourse to a public procurement procedure (see recital
24 of this Decision).
— there is an appropriate programme at Community,
national or regional level for the prevention, control
(169) The Portuguese authorities indicate that Decree-Law
or eradication of the disease concerned,
No 197/2002 was laid down in order to meet Portugal’s
obligations in the context of Decision 2000/766/EC, in
accordance with the polluter pays principle (see recitals
65 and 66 of this Decision). The Portuguese authorities
— diseases are a matter of concern for the public
have confirmed that the resources could not have been
authorities,
diverted to competing activities in which the service-
providers may have been engaged as the only activities
of the undertakings in question were in fact the
— the objective of the aid measures is preventative
collection, transportation, processing and destruction of
and/or compensatory,
animal by-products.
— the aid is compatible with Community veterinary and
(170) The Commission also considers that responsibility for the
phyto-sanitary legislation.
service and its financing was passed on to the operators,
following a transitional period, through the scheme
introduced by Decree-Law No 244/2003.
(165) These principles also apply under the terms of point 47
of the TSE guidelines.
(171) Given the special circumstances and the emergency
situation created by the risk of the spread of BSE
between 1999 and 2004, and due to the fact that the
(166) Bovine spongiform encephalopathy is a transmissible
scheme introduced by Decree-Law No
244/2003
disease that poses a threat to public health. It is an
provides for the gradual transfer of responsibility for
animal disease, the outbreak of which must be notified
and financing of the services to operators in the sector,
directly to the Commission and other Member States ( 52 ).
the Commission considers that the aid can be classified
The objective of the aid measure was to ensure that the
as short term and that it complies with the polluter pays
necessary prevention measures, involving collection,
principle in the long term.
transportation, processing and destruction, were applied
in accordance with the applicable veterinary legislation
between 1999 and 2005 in the meat sector.
(172) The Commission can therefore conclude that, based on
the available information, the aid granted between 1999
( 52 ) Council Directive 82/894/EEC of 21 December 1982 on the notifi
cation of animal diseases within the Community (OJ L 378,
and the end of 2002 can benefit from the derogation laid
31.12.1982, p. 58).
down in Article 107(3)(c) TFEU.

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(173) With regard to the aid granted between 2003 and
recital 160 et seq. of this Decision, the aid was granted in
November 2005, the Commission considers that, given
accordance with the principles laid down in point 47 of
the emergency situation that arose at the end of 2004
the TSE guidelines and can benefit from the derogation
and the fact that the scheme under the relevant Decree-
laid down in Article 107(3)(c) TFEU.
Law provides for the gradual transfer of responsibility for
and financing of the services, as indicated above, the aid
can be classified as compatible and compliant with point
47 of the TSE guidelines, where this aid corresponds to
the ‘actual’ costs of the services received.
3.2.

FINANCING OF THE AID
(180) Since October 2002, when Decree-Law No 197/2002
entered into force, the cost of the collection, transpor
tation, processing and destruction of mammalian meat
(174) As indicated in recital 100 of this Decision, the
and poultrymeat by-products has been financed by
Portuguese authorities have proven that the aid corre
revenue from a parafiscal charge imposed on slaughter
sponded to the ‘actual’ cost of the services provided by
houses, importers of bone-in beef, veal and pigmeat, and
the service-providers, with regard to the period between
intra-Community operators, i.e. bone-in beef, veal and
1999 and 2005.
pigmeat operators/receivers.
(175) Accordingly, the Commission concludes that, based on
the available information, the aid granted between 2003
(181) In accordance with the case-law of the Court of
and November 2005 to service-providers can benefit
Justice ( 53 ), the Commission normally considers that the
from the derogation laid down in Article 107(3)(c) TFEU.
financing of State aid through compulsory charges may
affect the aid by having a protective effect which goes
beyond aid properly speaking. The contributions in
question are in fact compulsory charges. In view of the
3.1.2. Aid granted to slaughterhouses and cutting
case-law, the Commission considers that aid cannot be
plants, importers and intra-Community
financed through parafiscal charges which are also
operators in the sector, and also livestock
imposed on products imported from other Member
farmers
States.
(176) As the Commission indicates in recital 166 of this
Decision, between 1999 and 2004 the risk of BSE
spreading in Portugal resulted in special circumstances
and an emergency situation. Given this exceptional
(182) In view of the case-law and of the fact that the aid was
situation and bearing in mind the fact that the scheme
granted through State resources and therefore constitutes
introduced by Decree-Law No 244/2003 provides for the
State aid, as defined in Article 107 TFEU, it should be
gradual transfer of responsibility for and financing of the
examined whether this aid may be discriminatory,
services to operators in the sector, the Commission
contrary to Article 110 TFEU, insofar as products from
considers that the aid can be classified as short term
other Member States must also pay the charge.
and that it complies with the polluter pays principle in
the long term. In line with its previous practice, it also
considers that, in the present case, the aid under point 47
of the TSE guidelines could, exceptionally, be granted to
(183) According to the Portuguese authorities, the imposition
other operators in the sector, namely slaughterhouses
of charges on imported bone-in meat is justified by the
and cutting plants, and also to importers and intra-
fact that, insofar as bone-in meat generates by-products
Community operators in the sector.
benefiting from the collection, transportation, processing
and destruction services, these imported products may
benefit from the system in the same way as domestic
products.
(177) As the Commission noted for service-providers, the aid
was granted in accordance with the principles laid down
in point 47 of the TSE guidelines.
(184) According to the information available to the
Commission, the charges were imposed on slaughter
(178) With regard to slaughterhouses and cutting plants,
houses and importers of bovine and pig carcasses, half-
importers and intra-Community operators in the sector,
carcasses and other bone-in parts (see Article 2(2) of
the Commission can therefore conclude that the aid
Decree-Law No 197/2002), and were used to finance
granted can benefit from the derogation laid down in
the services of collection, transportation, processing and
Article 107(3)(c) TFEU.
destruction of mammalian meat and poultrymeat by-
products (Article 1(1) of Decree-Law No 197/2002).
( 53 ) Judgment in Case 47/69 Government of the French Republic v
(179) With regard to livestock farmers, the Commission also
Commission of the European Communities [1970] ECR 487,
concludes that, bearing in mind the points made in
paragraph 20.

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EN
19.10.2011 Official
Journal
of
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European
Union L
274/33
(185) This information made the Commission doubt that the
(191) Under Article 3(2) of Decree-Law No 244/2003, slaught
charges imposed on those liable for the charge corre
erhouses, cutting plants, hatcheries and egg production
sponded to the services from which they benefited. The
facilities had to pay the charges set in Annex 1 to
Commission considered that it could not rule out the
Decree-Law No 197/2002, except for those entities bene
existence of a potentially discriminatory system in
fiting from the alternative scheme provided for in the
relation to products imported from other Member
Decree-Law, which, until the plan for the destruction of
States, on which the charge was also imposed.
Category 3 material was approved, had to pay the
charges set in Annex 2. With regard to Category 1 and
2 material, until a plan was approved, they had to pay
EUR 0,35 per kilogram of material (Article 5(1) of
(186) Subsequently, the Portuguese authorities gave an
Decree-Law No 244/2003).
assurance that the services of collection, transportation,
processing and destruction of poultrymeat by-products
were not financed by charges imposed on slaughter
houses and importers of bovine and pig carcasses, half-
carcasses and other bone-in parts, but, in accordance
(192) With regard to the amendments made by Decree-Law
with Annex 1 to Decree-Law No 197/2002, by charges
No 244/2003 to the charging system, the Commission
imposed on poultrymeat slaughterhouses which did not
asked the Portuguese authorities to prove that imported
collect, transport, process and destroy all the by-products
products could benefit from these services in the same
generated in the slaughter of poultry. Poultry carcass
way as domestic products.
importers and operators were exempt from the charge,
due to the fact that most imported poultry carcasses do
not generate by-products.
(193) The Portuguese authorities confirmed that the charge
introduced by Decree-Law No 244/2003 was based on
(187) However, with regard to importers and operators of
the by-products actually generated and that imported
bovine and pig carcasses, half-carcasses and other bone-
products could benefit in the same way from the
in parts, the Portuguese authorities demonstrated that
services in question. The Commission notes, however,
these imported bone-in parts did generate by-products.
that the Portuguese authorities have not provided any
quantified data in support of these assertions.
(188) In the information injunction and subsequently on
initiating the procedure, the Commission asked the
Portuguese authorities to give an assurance that
(194) In the absence of evidence, the Commission cannot
imported products could benefit from the mechanism
therefore conclude that the charge introduced by
in the same way as domestic products and to prove, in
Decree-Law No 244/2003 was equivalent to the cost of
a quantified manner, that, during a given reference
the services from which the by-products generated by
period, the charges imposed on bone-in beef, veal and
these imported products benefited and that,
pigmeat products from other Member States were
consequently, imported products could benefit from the
financially equivalent to the costs of the services from
services financed through the aid measure in the same
which these products exclusively benefited (see paragraph
way as domestic products.
37(h) of the Decision initiating the procedure).
(189) The Portuguese authorities gave an assurance that
(195) The Commission considers that the charging system
imported bone-in parts did benefit in the same way
applied based on Decree-Law No 197/2002 and on the
from the meat by-product collection, transportation,
transitional scheme introduced by Articles 3(2) and 5(2)
processing and destruction services as domestic
of Decree-Law No 244/2003 does not comply with
products, but they did not provide precise and
Article 110 TFEU, due to the existence of a potentially
supporting figures in this respect.
discriminatory system in relation to products imported
from other Member States, on which the charge was also
imposed.
(190) The information provided to the Commission does not
therefore enable it to conclude that the charge introduced
by Decree-Law No
197/2002, applied to imported
products, was equivalent to the cost of the services
VI. CONCLUSIONS
from which the by-products generated by these
imported products benefited and that, consequently,
(196) The Commission regrets that Portugal should have
imported products could benefit from the services
unlawfully granted aid for the collection, transportation,
financed through the aid measure in the same way as
processing and destruction of slaughterhouse waste,
domestic products.
contrary to Article 108(3) TFEU.

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L 274/34
EN
Official Journal of the European Union
19.10.2011
(197) The aid for the collection, transportation, processing and
financial equivalence between the amounts levied
destruction of slaughterhouse waste complied with the
overall on domestic products by way of the charge
applicable Community provisions in terms of the bene
concerned and the advantages from which these
ficiaries. However, the financing of this aid through the
products exclusively benefit.
charging system applied based on Decree-Law
No 197/2002 and on the transitional scheme introduced
by Articles 3(2) and 5(2) of Decree-Law No 244/2003 is
incompatible with the internal market, due to the
— Repayment must be made within a maximum time
potentially discriminatory effect in relation to products
limit of 6 months from the submission of the
imported from other Member States, on which the
request.
charge was also imposed.
— The amounts repaid must include interest calculated
(198) The Commission considers it appropriate in the present
as from the date on which they were levied up until
case to adopt a conditional decision using the possibility
the date of actual repayment. This interest shall be
offered by Article 7(4) of Regulation (EC) No 659/1999,
calculated on the basis of the Commission’s reference
according to which the Commission may attach to a
rate laid down by the method for setting the
positive decision conditions subject to which an aid
reference and discount rates ( 54 ).
may be considered compatible with the common
market and may lay down obligations to enable
compliance with the decision to be monitored.
— The Portuguese authorities shall accept any
reasonable evidence from the payers of the charge
paid in respect of products from other Member
States.
(199) In order to make good the breach of Article 110 TFEU
and thus retrospectively remove the potential discrimi
nation, Portugal must repay part of the charge imposed
on products from other Member States within a time
— The right to repayment cannot be made subject to
limit and under conditions set by the Commission.
other conditions, particularly that of the charge not
Making good this breach will make the aid concerned
having been passed on.
compatible with the Treaty.
— Where the charge has not yet been paid, the
(200) The conditions to be met for such repayment shall be
Portuguese authorities shall formally waive payment
laid down by the Commission. Portugal must thus repay
of the proportion of the charge imposed on products
to the persons who paid the charge that part of the
imported from other Member States and intended to
charge imposed on products from other Member States
finance the part of the aid exclusively benefiting
between the date when the charge laid down in Decree-
domestic products. The Portuguese authorities shall
Law No 197/2002 was first imposed and the date when
also waive any interest on late payment of this part.
it was last imposed prior to the end of the transitional
scheme introduced by Decree-Law No 244/2003. To that
end, Portugal will ensure that the following conditions
are met:
— Where the Commission so requests, Portugal shall
undertake to submit a full report proving the
proper implementation of the repayment measure.
— If they can provide evidence that the charge was
imposed on products imported from other Member
— If a charge with similar objectives has been imposed
States, the persons who paid the charge can claim the
in another Member State on the same products which
repayment of the proportion of the revenue from the
have been made subject to the charge in Portugal, the
charge intended to finance the part of the aid
Portuguese authorities shall undertake to repay those
exclusively benefiting domestic products. These
persons who have paid the charge for that part of it
claims for repayment shall be made within a time
which affected products from that other Member
limit set in accordance with national law and in no
State.
case less than 6 months from the publication of this
Decision.
— Portugal undertakes to make this Decision known to
all potential payers of the charge.
— Portugal must establish the extent of any discrimi
nation affecting imported products. To that end,
( 54 ) Commission notice on the method for setting the reference and
Portugal must check, during a reference period, the
discount rates (OJ C 273, 9.9.1997, p. 3).

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EN
19.10.2011 Official
Journal
of
the
European
Union L
274/35
HAS ADOPTED THIS DECISION:
— The Portuguese authorities shall accept any reasonable
evidence from the payers of the charge paid in respect of
products from other Member States.
Article 1
The State aid granted by Portugal based on Decree-Law
— The right to repayment cannot be subjected to other
No 393-B/98 of 4 December 1998 is compatible with the
conditions, particularly that of the charge not having been
internal market.
passed on.
Article 2
— Where the charge has not yet been paid, the Portuguese
1. The
State
aid
granted
by
Portugal
based
on
Decree-Law
authorities shall formally waive payment of the proportion
No 197/2002 of 25 September 2002 and on the transitional
of the charge imposed on products imported from other
scheme introduced by Article 3(2) of Decree-Law No 244/2003
Member States and intended to finance the part of the aid
of 7 October 2003 is compatible with the internal market,
exclusively benefiting domestic products. The Portuguese
provided that Portugal repays those persons who have paid
authorities shall also waive any interest on late payment
the charge for that part of it which affected products from
of this part.
other Member States between the date when the charge laid
down in Decree-Law No 197/2002 was first imposed and the
date when it was last imposed prior to the end of the transi
— Where the Commission so requests, Portugal shall undertake
tional scheme introduced by Decree-Law No 244/2003.
to submit a full report proving the proper implementation
of the repayment measure.
2. To that end, Portugal will ensure that the following
conditions are met:
— If a charge with similar objectives has been imposed in
another Member State on the same products which have
been made subject to the charge in Portugal, the Portuguese
— If they can provide evidence that the charge was imposed on
authorities shall undertake to repay those persons who have
products imported from other Member States, the persons
paid the charge for that part of it which affected products
who paid the charge can claim the repayment of the
from that other Member State.
proportion of the revenue from the charge intended to
finance the part of the aid exclusively benefiting domestic
products. These claims for repayment shall be made within
— Portugal undertakes to make this Decision known to all
a time limit set in accordance with national law and in no
potential payers of the charge.
case less than 6 months from the publication of this
Decision.
Article 3
— Portugal must establish the extent of any discrimination
Portugal shall inform the Commission, within a time limit of 2
affecting imported products. To that end, Portugal must
months from notification of this Decision, of the measures it
check, during a reference period, the financial equivalence
has taken to comply with it.
between the amounts levied overall on domestic products
by way of the charge concerned and the advantages from
which these products exclusively benefit.
Article 4
This Decision is addressed to the Portuguese Republic.
— Repayment must be made within a maximum time limit of
6 months from the submission of the request.
Done at Brussels, 13 July 2011.
— The amounts repaid must include interest calculated as from
the date on which they were levied up until the date of
For the Commission
actual repayment. This interest shall be calculated on the
basis of the Commission’s reference rate laid down by the
Dacian CIOLO
method for setting the reference and discount rates ( 55 ).
Member of the Commission
( 55 ) See footnote 54.

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