The European Commission publishes 12-page draft Cinema Communication which “intends to create a level playing field between member states and to encourage cross-border productions.”

The European Commission (EC) has launched a public consultation on the state aid criteria it proposes to use to assess member states’ film support schemes in the future.

The criteria are set out in a 12-page draft Cinema Communication on which the EC invites comments to by 14 June 2012.

The final Communication is set to be adopted by the EC in the second half of 2012 as the current state aid assessment criteria are due to expire by 31 December 2012 at the latest.

Commenting on the draft Communication, Joaquin Almunia, EC vice-president in charge of competition policy, said that the document “aims to provide a workable instrument which is beneficial both for the entire European audiovisual sector and for European audiences.”

An EC communique explained that the draft document “is intended to create a level playing field between member states and to encourage cross-border productions, taking advantage of the internal market rules.”

In view of a number of trends which have emerged since the publication of the first Communication in 2001, the authors of the draft Communication said it “aims to ensure that European audiences are offered a more culturally diverse choice of audiovisual works by”:

· extending the scope of activities covered by the Communication to include all aspects from story concept to delivery to the audience [the existing rules only apply to production support];

· limiting the possibility to impose territorial obligations on production expenditure;

· controlling the competition between member states to use state aid to attract inward investment from major productions; and

· referring to Commission initiatives aimed at improving the circulation and increasing the audience of European films for the benefit of both the European audiovisual industry and the citizens.”

The EC pointed out, however, that it would be “premature” to integrate the games sector in the present Communication: “not all games necessarily qualify as audiovisual works or cultural products. Therefore, the rules designed for film production cannot apply automatically to games.

Furthermore, contrary to the film and television sector, the Commission does not have a critical mass of decisions on state aid to games.

A first round of public consultation on the Communication was launched last summer as part of a review of the criteria for assessing the compatibility of national, regional, and local film and audiovisual support schemes with European Union state aid rules.

These criteria were set out in the Commission’s 2001 Cinema Communication whose validity was extended three times, most recently in 2009, when it was announced that new rules on state aid to cinematographic and other audiovisual works would come into effect by 31 December 2012, at the latest.

The European Union’s member states annually provide an estimated €3bn in film support, comprising €2bn in grants and soft loans and €1bn in tax incentives, with around 80% invested in film production.