Difference between revisions of "Draft 2012 Cinema Communication" English (en) français (fr)

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= Draft Communication from the Commission on State aid for films and other audiovisual works =
  
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== 1. Introduction ==
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<div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">1.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Audiovisual works, particularly films, play an important role in shaping European identities. They reflect the cultural diversity of the different traditions and histories of the EU Member States and regions. Audiovisual works are both economic goods, offering important opportunities for the creation of wealth and employment, and cultural goods which mirror and shape our societies. </div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">2.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Amongst audiovisual works, films still have a particular prominence, because of their cost of production and cultural importance. Film production budgets are substantially higher than for other audiovisual content, they are more frequently the subject of international coproduction, and the duration of their exploitation life is longer. Films in particular face strong competition from outside Europe. On the other hand, there is little circulation of European audiovisual works outside their country of origin.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">3.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>This limited circulation results from the fragmentation of the European audiovisual sector into national or even regional markets. While this is related to Europe's linguistic and cultural diversity, proximity is also built into the public support for European audiovisual works, with which national, regional and local funding schemes subsidise many small production companies. </div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">4.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>It is generally accepted that aid is important to sustain European audiovisual production. It is difficult for film producers to obtain a sufficient level of upfront commercial backing to put together a financial package so that production projects can proceed. The high risk associated with their businesses and projects, together with the perceived lack of profitability of the sector, make it dependent on State aid. In these circumstances, the fostering of audiovisual production by the Commission and the Member States have a role to ensure that their culture and creative capacity can be expressed and the diversity and richness of European culture reflected.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">5.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>MEDIA, the&nbsp;European Union's support programme for the film, television and new media industries, offers many different funding schemes, each targeting different areas of the audiovisual sector, including schemes for producers, distributors, sales agents, organisers of training courses, operators in new digital technologies, operators of video-on-demand (VoD) platforms, exhibitors and organisers of festivals, markets and promotional events. It encourages the circulation and promotion of European films with particular emphasis on non-national European films.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">6.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Member States implemented a wide range of support measures for the production of films, TV programmes and other audiovisual works. The rationale behind these measures is based on both cultural and industrial considerations. They have the primary cultural aim of ensuring that the national and regional cultures and creative potential are expressed in the audiovisual media of film and television. On the other hand, they aim to generate the critical mass of activity that is required to create the dynamic for the development and consolidation of the industry through the creation of soundly based production undertakings and the development of a permanent pool of human skills and experience. </div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">7.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Grants, tax incentives and other types of audiovisual support generally involve State resources. Since film producers are acting on an international level and audiovisual works are traded internationally, such support is liable to affect trade between Member States. Those producers and audiovisual works which receive such support are likely to have a financial and hence competitive advantage over those which do not. Consequently, such support may distort competition and is regarded as State aid.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">8.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>The Treaty recognises the utmost importance of promoting culture for the European Union and its Member States by incorporating culture among the Union's policies specifically referred to in the Treaty on the Functioning of the European Union (TFEU). Article 167 (2) TFEU provides that:</div><div style="margin: 0cm 0cm 6pt 1cm">''Action by the Union shall be aimed at encouraging cooperation between Member States and, if necessary, supporting and supplementing their action in the following areas:''</div><div style="margin: 0cm 0cm 6pt">''&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; […]''</div><div style="margin: 0cm 0cm 12pt">''&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - artistic and literary creation, including in the audiovisual sector.''</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">9.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Article 167 (4) TFEU provides that: ''The Union shall take cultural aspects into account in its action under other provisions of the Treaties, in particular in order to respect and to promote the diversity of its cultures.''</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">10.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Article 107 (1) TFEU prohibits aid granted by the State or through State resources, which distorts or threatens to distort competition and trade between Member States. However, the Commission may exempt certain State aid from this prohibition. One of these exemptions is Article 107 (3) (d) TFEU for aid to promote culture, where such aid does not affect competition and trading conditions to an extent contrary to the common interest.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">11.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>In line with the subsidiarity principle enshrined in Article 5 TEU, the definition of cultural activities is primarily a responsibility of the Member States. In assessing an audiovisual support scheme, the task of the Commission is limited to verifying whether a Member State has a relevant, effective verification mechanism in place able to avoid manifest error.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">12.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>As explained further in Section 3, this would be achieved through the existence of either a cultural selection process to determine which audiovisual works should benefit from aid or a cultural profile to be fulfilled by all audiovisual works as a condition of the aid. The Commission notes that the fact that a film is commercial does not prevent it from being cultural. This is in line with the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions of 2005[[#_ftn1|<span><span><span><span style="font-size: 12pt">[1]</span></span></span></span>]].</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">13.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>The assessment criteria for State aid for the production of films and other audiovisual works were originally set out in the 2001 Cinema Communication[[#_ftn2|<span style="font-size: 10pt"><span><span><span style="font-size: 10pt">[2]</span></span></span></span>]]. The validity of these criteria was extended in 2004[[#_ftn3|<span style="font-size: 10pt"><span><span><span style="font-size: 10pt">[3]</span></span></span></span>]], 2007[[#_ftn4|<span style="font-size: 10pt"><span><span><span style="font-size: 10pt">[4]</span></span></span></span>]] and 2009[[#_ftn5|<span style="font-size: 10pt"><span><span><span style="font-size: 10pt">[5]</span></span></span></span>]] and expired further to the publication of the present Communication.</div><div style="text-indent: -26.95pt; margin: 0cm 0cm 12pt 1cm">14.<span style="font: 7pt 'times new roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>In view of a number of different trends which have emerged since 2001, this Communication aims to ensure that European audiences are offered a more culturally diverse choice of audiovisual works by:</div>
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*extending the scope of activities covered by the Communication to include all aspects from story concept to delivery to the audience;
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*limiting the possibility to impose territorial obligations on production expenditure;
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*controlling the competition between Member States to use State aid to attract inward investment from major productions; and
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*referring to Commission initiatives aimed at improving the circulation and increasing the audience of European films for the benefit of both the European audiovisual industry and the citizens.
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== 2. Scope of activities ==
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<div><br>
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----
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<div id="ftn1"><div style="margin: 0cm 0cm 0pt 36pt">[[#_ftnref1|<span><span><span style="font-size: 10pt">[1]</span></span></span>]]<font size="2"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Convention states in Article 4(4): </span>“Cultural activities, goods and services refers to those activities, goods and services, which … embody or convey cultural expressions, irrespective of the commercial value they may have. Cultural activities may be an end in themselves, or they may contribute to the production of cultural goods and services."</font></div></div><div id="ftn2"><div style="margin: 0cm 0cm 0pt 36pt">[[#_ftnref2|<span><span><span style="font-size: 10pt">[2]</span></span></span>]]<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on certain legal aspects relating to cinematographic and other audiovisual works, OJ C 43, 16.2.2002, p. 6.</font></div></div><div id="ftn3"><div style="margin: 0cm 0cm 0pt 36pt">[[#_ftnref3|<span><span><span style="font-size: 10pt">[3]</span></span></span>]]<font size="2"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OJ C 123, 30.4.2004, p. 1.</span></font></div></div><div id="ftn4"><div style="margin: 0cm 0cm 0pt 36pt">[[#_ftnref4|<span><span><span style="font-size: 10pt">[4]</span></span></span>]]<font size="2"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OJ C 134, 16.6.2007, p. 5.</span></font></div></div><div id="ftn5"><div style="margin: 0cm 0cm 0pt 36pt">[[#_ftnref5|<span><span><span style="font-size: 10pt">[5]</span></span></span>]]<font size="2"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OJ C 31, 7.2.2009, p. 1.</span></font></div></div></div>

Revision as of 19:13, 19 March 2012

Draft Communication from the Commission on State aid for films and other audiovisual works

1. Introduction

1.            Audiovisual works, particularly films, play an important role in shaping European identities. They reflect the cultural diversity of the different traditions and histories of the EU Member States and regions. Audiovisual works are both economic goods, offering important opportunities for the creation of wealth and employment, and cultural goods which mirror and shape our societies.
2.            Amongst audiovisual works, films still have a particular prominence, because of their cost of production and cultural importance. Film production budgets are substantially higher than for other audiovisual content, they are more frequently the subject of international coproduction, and the duration of their exploitation life is longer. Films in particular face strong competition from outside Europe. On the other hand, there is little circulation of European audiovisual works outside their country of origin.
3.            This limited circulation results from the fragmentation of the European audiovisual sector into national or even regional markets. While this is related to Europe's linguistic and cultural diversity, proximity is also built into the public support for European audiovisual works, with which national, regional and local funding schemes subsidise many small production companies.
4.            It is generally accepted that aid is important to sustain European audiovisual production. It is difficult for film producers to obtain a sufficient level of upfront commercial backing to put together a financial package so that production projects can proceed. The high risk associated with their businesses and projects, together with the perceived lack of profitability of the sector, make it dependent on State aid. In these circumstances, the fostering of audiovisual production by the Commission and the Member States have a role to ensure that their culture and creative capacity can be expressed and the diversity and richness of European culture reflected.
5.            MEDIA, the European Union's support programme for the film, television and new media industries, offers many different funding schemes, each targeting different areas of the audiovisual sector, including schemes for producers, distributors, sales agents, organisers of training courses, operators in new digital technologies, operators of video-on-demand (VoD) platforms, exhibitors and organisers of festivals, markets and promotional events. It encourages the circulation and promotion of European films with particular emphasis on non-national European films.
6.            Member States implemented a wide range of support measures for the production of films, TV programmes and other audiovisual works. The rationale behind these measures is based on both cultural and industrial considerations. They have the primary cultural aim of ensuring that the national and regional cultures and creative potential are expressed in the audiovisual media of film and television. On the other hand, they aim to generate the critical mass of activity that is required to create the dynamic for the development and consolidation of the industry through the creation of soundly based production undertakings and the development of a permanent pool of human skills and experience.
7.            Grants, tax incentives and other types of audiovisual support generally involve State resources. Since film producers are acting on an international level and audiovisual works are traded internationally, such support is liable to affect trade between Member States. Those producers and audiovisual works which receive such support are likely to have a financial and hence competitive advantage over those which do not. Consequently, such support may distort competition and is regarded as State aid.
8.            The Treaty recognises the utmost importance of promoting culture for the European Union and its Member States by incorporating culture among the Union's policies specifically referred to in the Treaty on the Functioning of the European Union (TFEU). Article 167 (2) TFEU provides that:
Action by the Union shall be aimed at encouraging cooperation between Member States and, if necessary, supporting and supplementing their action in the following areas:
            […]
            - artistic and literary creation, including in the audiovisual sector.
9.            Article 167 (4) TFEU provides that: The Union shall take cultural aspects into account in its action under other provisions of the Treaties, in particular in order to respect and to promote the diversity of its cultures.
10.        Article 107 (1) TFEU prohibits aid granted by the State or through State resources, which distorts or threatens to distort competition and trade between Member States. However, the Commission may exempt certain State aid from this prohibition. One of these exemptions is Article 107 (3) (d) TFEU for aid to promote culture, where such aid does not affect competition and trading conditions to an extent contrary to the common interest.
11.        In line with the subsidiarity principle enshrined in Article 5 TEU, the definition of cultural activities is primarily a responsibility of the Member States. In assessing an audiovisual support scheme, the task of the Commission is limited to verifying whether a Member State has a relevant, effective verification mechanism in place able to avoid manifest error.
12.        As explained further in Section 3, this would be achieved through the existence of either a cultural selection process to determine which audiovisual works should benefit from aid or a cultural profile to be fulfilled by all audiovisual works as a condition of the aid. The Commission notes that the fact that a film is commercial does not prevent it from being cultural. This is in line with the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions of 2005[1].
13.        The assessment criteria for State aid for the production of films and other audiovisual works were originally set out in the 2001 Cinema Communication[2]. The validity of these criteria was extended in 2004[3], 2007[4] and 2009[5] and expired further to the publication of the present Communication.
14.        In view of a number of different trends which have emerged since 2001, this Communication aims to ensure that European audiences are offered a more culturally diverse choice of audiovisual works by:
  • extending the scope of activities covered by the Communication to include all aspects from story concept to delivery to the audience;
  • limiting the possibility to impose territorial obligations on production expenditure;
  • controlling the competition between Member States to use State aid to attract inward investment from major productions; and
  • referring to Commission initiatives aimed at improving the circulation and increasing the audience of European films for the benefit of both the European audiovisual industry and the citizens.


2. Scope of activities



[1]               The Convention states in Article 4(4): “Cultural activities, goods and services refers to those activities, goods and services, which … embody or convey cultural expressions, irrespective of the commercial value they may have. Cultural activities may be an end in themselves, or they may contribute to the production of cultural goods and services."
[2]               Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on certain legal aspects relating to cinematographic and other audiovisual works, OJ C 43, 16.2.2002, p. 6.
[3]               OJ C 123, 30.4.2004, p. 1.
[4]               OJ C 134, 16.6.2007, p. 5.
[5]               OJ C 31, 7.2.2009, p. 1.
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