No L 385/24 Official Journal of the European Communities 31. 12. 94 COMMISSION DECISION of 13 December 1994 on the proposal of the United Kingdom to award aid to Carpets International (UK) plc (formerly Abingdon Carpets plc), Gwent (Only the English text is authéntic) (Text with EEA relevance) (94/1071/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community and, in particular, the first subparagraph of Article 93 (2) thereof, Having regard to the Agreement establishing the European Economic Area and, in particular, subparagraph (a) of Article 62 (1) thereof, Having, in acordance with the abovementioned Articles, given notice to the parties concerned to submit their comments to it, Whereas: By letter dated 23 September 1993, pursuant to Article 93 (3) of the EC Treaty and the Code on aid to the synthetic fibres industry (!), the United Kingdom authorities notified the Commission of a proposal to award aid retrospectively to Abingdon Carpets plc in support of a completed investment programme costing approximately £ 4 900 000 (ECU 6,39 million) in a new facility for the production of polypropylene . bulked continuous filament (hereinafter PP-BCF) yarn on the company’s site in Crumlin, Gwent. The yarn is processed by the company to produce carpets. The company was * acquired by Shaw Industries Inc in September 1993 and, on 1 January 1994, the business together with that of Kosset Carpets Ltd was transferred to Carpets International (UK) plc (hereinafter CIP), a new wholly owned subsidiary of Shaw Industries Inc. The proposed aid would be awarded in the form of a grant of £ 750 000 (ECU 0,98 million) under the Regional Development Grant (hereinafter RDG) scheme which was approved by the Commission in 1984. It should be noted that the company applied for assistance on 29 March 1988 and that, under the terms of the RDG scheme, applicants could undertake the ' () O] No C 346, 30. 12. 1992, p. 2 and O] No C 224, 12. 8. 1994, p. 4. : investments for which they had applied for aid before receiving approval from the UK authorities. The proposal was the subject of correspondence between the Commission and the UK authorities in September 1990 and, in December 1991, between the Commission and the company. However, as noted above, the UK authorities did not formally notify a proposal to award aid to the company until 23 September 1993. The Commission decided on 14 December 1993 to open the procedure provided for in Article 93 (2) in respect of the proposed aid. In taking this decision, the Commission considered that, on the information provided by the UK authorities, the proposed aid would be likely to distort competition and affect trade among Member States to an extent contrary to the common interest because it would result id an increase in the production capacity of the aid beneficiary and, therefore, could not conform with the Code under which aid could be authorized only if it would lead to a significant reduction in the production capacity of the aid beneficiary. Accordingly, the proposed aid appeared to be incompatible with the common market. By letter dated 27 January 1994, the Commission informed the United Kingdom that it had decided to open the procedure provided for under Article 93 (2) in respect of the proposal to award aid to CIP, Other Member States and interested parties were informed by publication of the letter in the Official Journal of the European Communities (2). I By letter dated 7 March 1994, the United Kingdom submitted comments under the procedure. The UK authorities argued that the Commission should assess the proposed aid against the terms of the version of the Code in force at the time the investment was undertaken, i.e. the 1987 to 1989 Code (%), because the investment was carried out in 1988, and not against the {2 No C 79, 16. 3. 1994, p. 8. ) OJ {) OJ No C 183, 11. 7. 1987, p. 4.