31.7.2013 Official Journal of the European Union L 20411 REGULATIONS COUNCIL REGULATION (EU) No 733/2013 of 22 July 2013 amending Regulation (EC) No 994/98 on the application of Articles 92 and 93 of the Treaty establishing the European Community to certain categories of horizontal State aid (Text with EEA relevance) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 109 thereof, Having regard to the proposal from the European Commission, Having regard to the opinion of the European Parliament, Whereas: Council Regulation (EC) No 994/98 (!) empowers the Commission to declare by means of regulations that certain specified categories of aid are compatible with the internal market and are exempted from the notifi- cation requirement of Article 108(3) of the Treaty on the Functioning of the European Union (TFEU). State aid is an objective notion defined in Article 107(1) of the TFEU. The power of the Commission to adopt block exemptions as provided for in Regulation (EC) No 994/98 only applies to measures that fulfil all the criteria of Article 107(1) of the TFEU and therefore constitute State aid. Inclusion of a certain category of aid in Regulation (EC) No 994/98 or in an exemption regulation does not predetermine the qualification of a measure as State aid within the meaning of Article 107(1) of the TFEU. Regulation (EC) No 994/98 empowers the Commission to declare, that under certain conditions aid to small and medium-sized enterprises (‘SMEs), aid in favour of research and development, aid in favour of environ- mental protection, aid in favour of employment and training and aid that complies with the map approved by the Commission for each Member State for the grant () OJ L 142, 14.5.1998, p. 1. ) of regional aid, is compatible with the internal market and not subject to the notification requirement. Regulation (EC) No 994/98 authorises the Commission to exempt aid for research and development, but not for innovation. Innovation has since become a Union policy priority in the context of Innovation Union’, one of the Europe 2020 flagship initiatives. Moreover, many aid measures for innovation are relatively small and create no significant distortions of competition. In the culture and heritage conservation sector, a number of measures taken by Member States might not constitute aid because they do not fulfil all the criteria of Article 107(1) of the TFEU, for example because the beneficiary does not carry out an economic activity or because there is no effect on trade between Member States. However, to the extent measures in the field of culture and heritage conservation do constitute State aid within the meaning of Article 107(1) of the TFEU, Member States are currently required to notify them to the Commission. Regulation (EC) No 994/98 authorises the Commission to exempt aid granted to SMEs, but such an exemption would in the cultural sector be of limited use as recipients are often large companies. However, small culture, creation and heritage conser- vation projects, even if carried out by larger companies, do not typically give rise to any significant distortion, and recent cases have shown that such aid has limited effects on trade. Exemptions in the culture and heritage conservation sector could be designed on the basis of the Commis- sion’s experience as set out in guidelines, such as for cinematographic and audiovisual works, or developed case by case. When drafting such block exemptions, the Commission should take into account that they should only cover measures constituting State aid, that they should in principle focus on measures that contribute to the objectives of EU State aid modern- isation (SAM)’, and that only aid is block-exempted in respect of which the Commission has already substantial experience. Furthermore, the primary competence of the Member States in the area of culture, the special protection  enjoyed by cultural diversity —under Article 167(1) TFEU and the special nature of culture should be taken into account.