On Monday, the European Commission opened a detailed investigation into Croatian state aid for timber companies, in order to check whether it is illegal aid.
The commission opened the investigation after receiving a complaint in which it is claimed that Hrvatske šume (HŠ), a 100% state-owned company and some Croatian wood processing companies, benefited from state aid incompatible with the internal market, reports Dnevnik.hr.
The support was allegedly granted so that HŠ did not pay the Croatian state the exclusive right to manage and commercially exploit Croatian public forests. It is also being investigated whether HŠ offered wood purchase contracts to some Croatian wood processing companies at non-market prices.
“Based on a preliminary assessment, when it comes to the exclusive right of commercial exploitation of public forests granted to HŠ, the Commission doubts that the absence of payment can be considered an economic advantage compared to private forest owners who, in order to compete with HŠ, have to buy or lease the forest. Also, in relation to the non-market prices offered to some Croatian wood processing companies, the Commission doubts that it is not a matter of independent business decisions of an independent company (HŠ), but that these are decisions the Croatian state, which led to an economic advantage for a selected group of HŠ customers”, the Commission states.
He points out that the opening of the investigation in no way prejudges its outcome and that it gives the opportunity to interested parties to submit their remarks.
HŠ is a 100% state-owned company, and since 1990 it has had the exclusive right to manage and commercially exploit all publicly owned forests in Croatia.