EC & Competition Law Group

24 Mar 1999

EUROPEAN COMMISSION ISSUES FORMAL LETTER OF OBJECTION

EUROPEAN COMMISSION ISSUES FORMAL LETTER OF OBJECTION TO FRANCE RELATING TO STATE AIDS IN COAL INDUSTRY

Simmons & Simmons' pan-European EC & Competition Law Group, on behalf of its client Thion & Cie, a French private company involved in the coal industry, has brought to light a possible misuse of State aids by Groupe Charbonnages de France, the French state-owned coal company.

Following on from a formal complaint prepared by Simmons & Simmons which was submitted to the European Commission on 27 August 1997, the European Commission on 09 February 1999 issued a formal Letter of Objection to France. The European Commission requires France to justify itself as regards possible infringements of the European Coal and Steel Community ('ECSC') regulations concerning State aids in the coal sector and in particular direct or indirect misuse of State aids for non-authorised purposes, leading to distortion of competition between producers, dealers and European end-users.

According to the European Commission, the illicit State aids may amount to FRF 209.9 million for 1994 to 1997, although this is said to be only an estimate and could be increased in the final decision. Unless France provides evidence to the contrary, the European Commission will be entitled to issue a formal decision to France after other ECSC countries have had one month in which to give their opinion after the Letter of Objection has been published in the Official Journal of the European Communities.

The Simmons & Simmons team is being led by partner Jacques de Taisne in the firm's Paris office, with assistance from Frederic Bourgoin (Paris office) and Conor Maguire (Brussels office). Advice has included drafting the Complaint, corresponding with the Directorate General XVII (Energy) and subsequent lobbying actions.

Jacques de Taisne commented:

" French state owned companies are coming increasingly under scrutiny from the European Commission as regards State aids. We are particularly delighted to assist Thion & Cie in this matter. This illustrates the growing integration of our Pan European EC/Competition practice, providing a seamless service to our clients."

Eric Soyer, head of legal affairs at Thion & Cie, commented:

"The European Commission backed our arguments. We are extremely pleased with our collaboration with Simmons & Simmons in this matter."

ENDS Notes for editors:

1. Simmons & Simmons is worldclass law firm with offices in London, Paris, Brussels, Düsseldorf, Lisbon, Milan, Rome, Madrid, Abu Dhabi, Hong Kong, Shanghai and New York with over 1,400 staff worldwide. For further information on Simmons & Simmons please visit our website at www.simmons-simmons.com.

2. Simmons & Simmons' EC & Competition Law Group now operates as a pan-European practice from its network of European offices and covers the full range of European law and EC and domestic competition matters. The Group, which comprises more than 20 lawyers, has considerable experience in advising on EU procurement law (most recently in relation to the Channel Tunnel Rail Link, the largest construction project in the UK).