24.8.2007 Official Journal of the European Union L 219/25 COMMISSION DECISION of 24 April 2007 on State aid C 26/2006 (ex N 110/2006), temporary defensive mechanism to shipbuilding — Portugal (notified under document number C(2007) 1756) (Only the Portuguese version is authentic) (Text with EEA relevance) (2007/581/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having called on interested parties to submit their comments pursuant to those provisions (1) and having regard to their comments, Whereas: I. PROCEDURE (1) By letter dated 7 February 2006 (registered on 10 February 2006), Portugal notified the Commission of its intention to grant operating aid to Estaleiros Navais de Viana do Castelo SA (ENVC). By letter dated 13 March 2006, the Commission requested further clarifications, which Portugal provided by e-mail dated 28 April 2006. By letter dated 23 June 2006, the Commission informed Portugal that it had decided to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the aid. By letter dated 25 July 2006 (registered on 26 July 2006), the Portuguese authorities presented their comments in the context of the abovementioned procedure. The Commission decision to initiate the procedure was published in the Official Journal of the European Union (2). The Commission called on interested Parties to submit their comments. There were no comments from third Parties. II. DETAILED DESCRIPTION OF THE AID MEASURE The aid is intended for Estaleiros Navais de Viana do Castelo SA (ENVC), a Portuguese shipyard currently employing some 1 000 people. () O] C 223, 16.9.2006, p. 4. () See footnote 1 above. (6) (10) (11) ( ( ’) ‘) On 14 November 2003, ENVC signed a contract with a French ship owner, Fouquet Sacops SA, for the delivery of a chemical and oil tanker (hull No 227), for the contract price of EUR 22900 000. The vessel was delivered on 26 April 2005. Portugal proposes to grant ENVC aid for this contract in the form of a grant of EUR 1461 702 on the basis of Council Regulation (EC) No 1177/2002 concerning a temporary defensive mechanism to shipbuilding (%), as amended by Council Regulation (EC) No 502/2004 (%) (the TDM Regulation). The TDM Regulation entered into force on 3 July 2002 and expired on 31 March 2005; therefore, it was no longer in force at the time Portugal notified the aid. Portugal claims that the contract is nonetheless eligible for aid under the TDM Regulation, on the following grounds. Atticle 4 of the TDM Regulation states that ‘This Regu- lation shall be applied to final contracts signed from the entry into force of this Regulation until its expiry .... Portugal states in this respect that the contract in question was signed on 14 November 2003, ie. while the TDM Regulation was still in force, and therefore remains eligible for aid. Portugal further argues that the contract in question was the subject of lower price offers by Korean shipyards, thus fulfilling the conditions of Article 2 of the TDM Regulation and that the aid is thus justified to counter unfair competition from Korean shipyards. III. GROUNDS FOR INITIATING THE FORMAL INVESTIGATION PROCEDURE The Commission, in its decision to initiate the formal investigation procedure in the present case, stated that it had doubts about the compatibility of the aid with the common market based on the TDM Regulation for the following reasons. 172, 2.7.2002, p. 1. o L 0] L 81, 19.3.2004, p. 6.