Control of overcompensation
Article 7
1. Member States shall ensure that the compensation granted for the operation of the SGEI meets the requirements set out in this Decision and in particular that the undertaking does not receive compensation in excess of the amount determined in accordance with Article 5. Member States shall provide evidence of compliance upon request from the Commission. For that purpose, Member States shall carry out regular checks, at least every 5 years during the period of entrustment and at the end of that period. 2. Where the Member State has established a fixed compensation level for an SGEI which adequately anticipates and incorporates the efficiency gains that the service provider can be expected to make over the period of entrustment, on the basis of a correct allocation of costs and revenues and of reasonable expectations, the overcompensation check shall be limited to verifying that the level of profit to which the provider is entitled in accordance with the entrustment act is reasonable from an ex ante perspective. 3. Where the activity of the provider of the SGEI is essentially limited to the provision of that SGEI, with annual commercial revenues not exceeding 5% of the total annual revenues during the entrustment period, and the provider is legally obliged to reinvest all its profits into the provision of that SGEI, ex post checks to verify the absence of overcompensation shall not be necessary. When applying this exemption, Member States shall ensure that the commercial revenues remain ancillary to the provision of the SGEI. 4. Where an undertaking has received compensation in excess of the amount determined in accordance with Article 5, the Member State concerned shall require the undertaking concerned to repay any overcompensation received. If future compensation payments are foreseen by an ongoing SGEI entrustment, the parameters for the calculation of the compensation shall be updated for the future and, where the amount of overcompensation does not exceed 10% of the amount of the average annual compensation, such overcompensation may be deducted from the next compensation payment.