Subject: Re: Inquiry Regarding the Application of EU Regulation 651/2014 and Harmonization of Requirements in the Baltic Region
From: Eva Kalniņa <[email-masked]>
To: "Kersti Kunder" <[email-masked]>, "LIAA Invest" <[email-masked]>
Cc: <[email-masked]>, <[email-masked]>, <[email-masked]>, <[email-masked]>, <[email-masked]>, <[email-masked]>, <[email-masked]>, <[email-masked]>, "Andris Blumbahs" <[email-masked]>
Date: Tue, 15 Oct 2024 09:21:35 +0300

Dear Kersti,
Thank you very much for the information you provided, it is very helpful
for us, as in Latvia the evaluating authorities refer to the requirement
to request financial reports from each group entity. Could you kindly send
the explanation you mentioned regarding the European Commission's
explanation (European Commission has explained: As already set out in
replies to earlier questions, the other criteria of Article 2(18)...)?
This would help us better understand the approach.
Additionally, I have requested the Latvian evaluation department to
provide answers to the questions of your interest. Once the information is
prepared, I will forward it to you.

Regards,

Eva Kalniņa

Projektu attīstības nodaļa

Investīciju projektu departaments

Pērses iela 2, Rīga, LV-1442

Mob. Tālr.: +371 26414932

liaa.gov.lv <http://www.liaa.gov.lv/>

latvia.eu

  _____

From: Kersti Kunder <[email-masked]>
Sent: Monday, October 14, 2024 17:56
To: LIAA Invest <[email-masked]>
Cc: [email-masked] <[email-masked]>;
[email-masked] <[email-masked]>;
[email-masked] <[email-masked]>; [email-masked] <[email-masked]>;
[email-masked] <[email-masked]>; [email-masked] <[email-masked]>;
[email-masked] <[email-masked]>; [email-masked]
<[email-masked]>; Andris Blumbahs <[email-masked]>; Eva
Kalniņa <[email-masked]>
Subject: FW: Inquiry Regarding the Application of EU Regulation 651/2014
and Harmonization of Requirements in the Baltic Region

UZMANĪBU: Šis ir ārējs e-pasts, esiet piesardzīgi, atverot pielikumus un
saites.

Dear Colleagues

Thank You for Your questions, what a great initiative to standardize
practices between member states!

I think we can have an open discussion here.

Our answers from Estonian Business and Innovation Agency (Enterprise
Estonia):

1.	What financial information do you require from company groups to
ensure that they are not classified as "undertakings in difficulty"?-  We
use the last approved annual report. Estonian companies provide their
annual reports to the Estonian Business register by 30 of June every year,
and reports are accessible to all: Search for a legal person |
e-Äriregister (rik.ee) <https://ariregister.rik.ee/eng>

However – if the company is in difficuties based on annual report, we ask
them to provide a more recent report which would show that they are not in
difficulties any more.

If there are foreign companies in the group, we ask applicant to provide
their last approved annual reports.

2.	Do you assess related companies, such as other companies owned by
the parent company, using the parent company’s consolidated financial
statements, or do you require individual financial reports from each
company within the group?

– can be done  both ways. At first we  evaluate on the applicant level and
then on the group level. If we have consolidated data, then group level
will be evaluated on the basis of consolidated data. If the applicant does
not provide us consolidated data, then we take annual reports from
Business register or ask from applicant all the group members annual
reports and evaluate them separately.

We also assess all companies owned through natural person who has majority
stake in other companies (over 50% shares).

We do not consider partner companies (25-50% shares) to be part of the
group when determing undertakings in difficulties.

European Comission has explained:

As already set out in replies to earlier questions, the other criteria of
Article 2(18) for determining whether an undertaking is in difficulty need
to be assessed at both, the level of the legal entity applying for aid and
the level of the group to which such entity belongs. The assessment at the
level of the group should be carried out on the basis of consolidated
financial statements. If such consolidated financial statements are not
available it is possible to carry out a plausibility check of the
financial situation of the group on the basis of stand-alone financial
statements of the individual entities forming the group, by adding up
these stand alone financial statements. It is not necessary to assess
separately individual entities forming a group.

We don`t have regulation or rules written down in one document at the
moment unfortunately regarding UID. But we do use EC User guide to the SME
Definition.

I hope this is information is useful.

We have some questions about your practises regarding the size of the
company:

1.	How you determine the number of employees – do you count members
of the management board,  owners (shareholders), members of the
supervisory board? They are usually not counted in annual reports.
2.	In case one natural person owns the majority shares in company A
and also in companies B and C – do you consider all these companies as
linked companies even if they do not operate on the same or adjacent
markets?
3.	If the majority of shares is owned by more individuals (acting
jointly) – do you consider the enterprises involved as linked if they
operate on the same or adjacent markets?
4.	Do you count same family members acting jointly and having several
companies as single economic entity (a group)? T.ex. if individuals acting
jointly have same surnames, how do you determine they are relatives and
acting jointly?
5.	When determing the size of the group, do you have some exceptions
for some group members? T.ex If an aid applicant (company) is part of a
larger group, but he has different field of activity and you don`t count
this applicant to group and he may be small enterprise although group is
large enterprise – is it possible?

Hope all of you find time to answer!

PS! Can we save your contacts in case we have further questions regarding
similar questions about UID and defining the size of the company?

Best regards

Kersti Kunder

Senior Consultant

Reporting and Information

Grant Centre

Estonian Business and Innovation Agency (Enterprise Estonia)

+372 5615 6549

+372 627 9748

[email-masked] <mailto:[email-masked]>

Sepise 7, 11415 Tallinn

 <http://www.eis.ee/> www.eis.ee

From: LIAA Invest <[email-masked] <mailto:[email-masked]> >
Sent: Friday, October 11, 2024 3:08 PM
To: Klienditeenindus <[email-masked]
<mailto:[email-masked]> >; [email-masked]
<mailto:[email-masked]> ;
<mailto:[email-masked]>
[email-masked]; [email-masked]
<mailto:[email-masked]> ; [email-masked] <mailto:[email-masked]>
Cc: [email-masked] <mailto:[email-masked]> ;  <mailto:[email-masked]>
[email-masked]; [email-masked] <mailto:[email-masked]> ;
[email-masked] <mailto:[email-masked]> ; Andris Blumbahs
<[email-masked] <mailto:[email-masked]> >; Eva
Kalniņa <[email-masked] <mailto:[email-masked]> >
Subject: Inquiry Regarding the Application of EU Regulation 651/2014 and
Harmonization of Requirements in the Baltic Region

Dear Colleagues,

I hope this message finds you well.

On behalf of the Investment and Development Agency of Latvia (LIAA), I
would like to inquire about the current practices regarding the financial
evaluation of company groups and partner enterprises in your country,
particularly concerning the application of EU Regulation 651/2014 on the
status of undertakings in difficulty.

We have identified that EU Member States interpret Commission Regulation
(EU) No 651/2014 of 17 June 2014 , which declares certain categories of
aid compatible with the internal market in accordance with Articles 107
and 108 of the Treaty, in different ways. The document relates to Article
18(2) of the EEA Agreement. In particular, we are interested in
understanding how your country applies this regulation when evaluating
large international company groups whose subsidiaries apply for support.
<https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014R0651
>
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014R0651

To ensure a harmonized application of the regulation, we kindly request
clarification on the following:

1.	What financial information do you require from company groups to
ensure that they are not classified as "undertakings in difficulty"?

2.	Do you assess related companies, such as other companies owned by
the parent company, using the parent company’s consolidated financial
statements, or do you require individual financial reports from each
company within the group?

Additionally, we would appreciate if you could share any relevant
materials or guidelines outlining the evaluation principles used in your
country. Please feel free to send them in your local language if
necessary, as we can arrange for translation.

We look forward to receiving your response and learning more about the
approaches taken by your institutions in this area.

Eva Kalniņa

Projektu attīstības nodaļa

Investīciju projektu departaments

Pērses iela 2, Rīga, LV-1442

Mob. Tālr.: +371 26414932

 <http://www.liaa.gov.lv/> liaa.gov.lv

latvia.eu

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