6 State aid rules and protection of heritage
in the film sector
| (25474)
7583/04
COM(04) 171
| Commission Communication on the follow-up to the Commission communication on certain legal aspects relating to cinematographic and other audiovisual works (Cinema communication) of 26.09.2001 (published in OJ No. C 43 on 16.2.2002)
Draft Recommendation on film heritage and the competitiveness of related industrial activities
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| Legal base | Article 157 EC; co-decision; QMV
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| Document originated | 16 March 2004
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| Deposited in Parliament | 23 March 2004
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| Department | Culture, Media and Sport
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| Basis of consideration | EM of 7 April 2004
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| Previous Committee Report | None; but see (22361) 8030/01: (22770) 12258/01: HC 152-iv (2001-02), para 12 (7 November 2001)
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
6.1 In September 2001 the Commission issued a Communication on
certain legal aspects relating to cinematographic and other audiovisual
works, which dealt with a range of issues including the application
of the state aid rules to the film sector and the protection of
film heritage. We cleared that Communication on 7 November 2001.
We noted that the Government found it broadly satisfactory, and
that it contained no proposals for immediate legislation. The
present Communication is a follow-up to the one made in 2001.
The Communication and draft Recommendation
6.2 The Commission Communication sets out the practice which
the Commission will follow in respect of the state aid rules until
30 June 2007, and introduces a draft Recommendation on the preservation
of film heritage.
6.3 The Commission indicates that its main concerns
about state aids are not so much to do with the volume of aid,
but with "territorialization" clauses, i.e. provisions
which require film producers to spend a certain amount of the
film budget in a Member State as a condition of obtaining the
full amount of aid from that Member State. In the Commission's
view, such clauses may constitute a barrier to the free circulation
of workers, goods and services across the EC and may therefore
fragment the internal market or hinder its development. The Commission
considers, nevertheless, that such clauses may be justified under
certain circumstances and within limits in order to "ensure
the continued presence of human skills and technical expertise
required for cultural creation".
6.4 The Commission further states that it has considered
the arguments put forward by national authorities and professionals
in the film sector and that it accepts that film production is
under pressure. It states that it is willing to consider, at the
latest at the time of the next review of the Communication, higher
amounts of aid being made available, provided that aid schemes
comply with the general Treaty rules and that barriers to the
free circulation of workers, goods and services across the EC
are reduced. In the meantime, the Commission extends the existing
criteria for state aids in this sector until 30 June 2007.
6.5 The draft Recommendation invites Member States
to adopt appropriate legislative or administrative measures to
ensure that cinematographic works forming part of the "national
audiovisual heritage" are collected, catalogued and preserved
and made available for educational, academic, research and cultural
purposes. The Recommendation calls on Member States to undertake
the systematic collection of cinematographic works, at least where
the production of the works has received public funding at national
or regional level, and to adopt appropriate measures for cataloguing
and indexing of works, including the creation of databases. The
Recommendation also invites Member States to ensure the preservation
of works, including reproduction on new storage media and preservation
of equipment for showing films on different media, and to consider
a system for the voluntary deposit of works from other countries
and of publicity material relating to films. Finally, the Recommendation
invites Member States to encourage cooperation between their national
bodies responsible for the preservation of cinematographic works.
The Government's view
6.6 In her Explanatory Memorandum of 7 April the
Minister for the Arts (Estelle Morris) explains that the Commission
has extended the existing state aid guidelines for three years,
but that it initially wished to reduce the amount a film producer
would have to spend in the Member State as a condition of receiving
national aid. (The Minister points out that the Film Act 1985
requires 70% of a film's budget to be spent in the UK in order
for a film to be certified as British and therefore eligible for
tax relief and/or lottery funding.) The Minister adds that the
Commission received a "strong message" from most Member
States that reducing territoriality requirements would seriously
undermine the European film industry.
6.7 The Minister states that the British Film Institute
(BFI), which holds the main national archive for film in the UK,
welcomes the draft Recommendation. It also welcomes the encouragement
for designated bodies to make heritage materials as widely accessible
as possible and for increased cooperation between designated archives
in Europe and elsewhere. The Minister points out that the UK has
an advanced and well-developed system for film preservation and
archiving.
6.8 The Minister adds that the BFI already carries
out many of the requirements of the Regulation. As far as the
preservation of film on new mediums is concerned, the Minister
recalls that the Recommendation is not binding but that the preservation
of old and damaged film and transfer to new mediums carries with
it very significant costs. The Minister comments that significant
change in archival practice will be necessary as digital technologies
increasingly supplant the older analogue film technologies.
Conclusion
6.9 We thank the Minister for her informative
and helpful Explanatory Memorandum. We note that the Recommendation
is welcomed by the British Film Institute. We are content to clear
the document.
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