Stockholm Avfall AB and Stockholm Vatten AB, two municipal companies, will, as of fiscal year 2020, maintain so-called transparent and separate accounts in accordance with the Swedish Transparency Act. This is the result of an investigation conducted by the Swedish Competition Authority and concluding that the two companies must comply with the Transparency Act. The provisions of this act aim in particular to simplify the scrutiny of compliance with EU state aid rules.
“The Transparency Act is important. It supports the European Commission in its mission to ensure that companies do not receive unlawful state aid. This legislation enhances also the possibilities to detect unlawful cross-subsidisation,” says Karin Lunning, Deputy Director General at the Swedish Competition Authority.
Following the receipt of a complaint alleging that the subsidiaries in the Stockholm Vatten och Avfall AB group did not fulfil their obligations to produce transparent and separate accounts pursuant to the Swedish Transparency Act, the Swedish Competition Authority opened an investigation. The companies have now committed to produce transparent and separate accounts of their different business activities.
The requirement to maintain transparent accounts applies to public companies, while the requirement to maintain separate accounts may apply to both public and private companies. These accounting requirements aim respectively to ensure transparency on how public companies use public funds and on how revenues and costs are assigned or allocated between activities in respect of which a special or exclusive right has been granted and activities conducted on a competitive market. The obligation to produce such accounts in accordance with the Swedish Transparency Act applies to companies with a turnover exceeding EUR 40 million.
“The companies concerned must be aware of their obligation to produce accounts according to the Transparency Act. The decision adopted by the Competition Authority gives guidance on how these rules should be applied,” says Karin Lunning, Deputy Director General of the Swedish Competition Authority.
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