BRATISLAVA, March 23, (WEBNOVINY) – On Wednesday, parliamentary deputies voted to override the President’s veto of the draft amendment to the state assistance law, based on which the company Frucona will be able to return unlawfully provided state aid. Slovakia will thus avoid a potential fine from the European Commission. According to Finance Minister Ivan Miklos, Slovakia could suffer considerable economic damage if the parliament had failed to approve the amendment. President Ivan Gasparovic previously returned the amendment to the parliament as he considers it retroactive. Opposition deputies for the SMER-SD party shared his opinion, too.
Based on the amendment, companies that received unlawful state assistance according to the European Commission, have to return it, including interest rates. The new legislation will apply also to the Commission’s decisions issued before the law takes effect, too. If, according to this change, the execution proceeding will be launched on the basis of a decision enforceable on the basis of the law on state assistance, the Malacky district court will be the one with venue jurisdiction. The law comes into force on June 1, 2011.
Frucona informed the Kosice Tax Office of its incapacity to fully cover its tax debts in 2004. The firm could have paid only 35 percent of the liabilities. Subsequently, Frucona filed a notice with the Kosice Regional Court, initiating proceedings to settle 35 percent of the debt that totaled SKK 644.6 million in tax arrears. Both the Kosice Tax Office and the Regional Court accepted the proposal and remitted its debt. Three years later, the EC found that the Slovakia provided the company with state assistance of SKK 416.6 million that infringed the rules of the single market. The tax office called upon the company to pay the debt but Frucona disregarded the appeal. The office filed a lawsuit with the Kosice II District Court on June 21, 2006 to recover the outstanding sum.
The verdict of the European Court of Justice concluded that the Slovak Republic failed to submit sufficient evidence based on which it could be assumed that it took all possible steps in the set horizon to recover the unlawfully extended state assistance. Therefore, Slovakia is obliged to pay all costs of the court trial.
SITA