Steps to State Aid Compliance
Where the assistance fulfills the criteria in Article 87(1), state aid will be present and steps will need to be taken to ensure compliance.
The first step is to consider whether the structure of the project can be redesigned so it can achieve its objectives whilst being outside the scope of the state aid rules.
If this is not possible, then it will be necessary to work within the regulations, frameworks and guidelines provided by the European Commission that set out specific circumstances where state aid will be compatible with the common market.
Block Exemption Regulations
Block exemption regulations set out categories of aid that have already been declared compatible by the Commission.
Aid provided under block exemption regulations will need to be registered with the European Commission and comply with the monitoring and reporting requirements.
The General Block Exemption Regulation (“GBER”) was introduced in August 2008 and provides 26 measures which can be used to assist companies, including:-
- Regional investment and employment aid (Article 13);
- SME investment and employment aid (Article 15);
- Aid for female entrepreneurship (Article 16);
- Aid for environmental protection (Articles 17 – 25);
- Aid for consultancy and participation in fairs (Articles 26 – 27);
- Aid in the form of risk capital (Articles 28 – 29);
- Aid for R&D and innovation (Articles 30 – 37);
- Training Aid (Article 38); and
- Aid for disabled and disadvantaged workers (Article 39 – 42).
The GBER needs to be interpreted strictly and projects which do not comply fully with the applicable article will be considered prohibited state aid.
The Services of General Economic Interest Block Exemption Regulation sets out the conditions when an SGEI will be compatible with the EC Treaty.
De Minimis Regulation
The De Minimis regulation allows the provision of small amounts of aid at a level which the European Commission considers will have no substantial effect on trade and competition between member states.
There is no requirement to notify de minimis aid to the European Commission. There are however specific administrative requirements that must be met.
Horizontal Frameworks and Guidelines
The horizontal rules regulate aid for objectives which apply across the economy and are aimed at solving problems that may arise in any industry and any country.
The frameworks and guidelines identify types of aid that are likely to be deemed compatible and approved by the Commission and set out the European Commission's views on the meaning of aid for various purposes e.g. risk capital, research, environmental protection etc.
Funding under these rules can only be provided once approval has been sought and received from the European Commission through a formal notification procedure involving the Department of Business, Enterprise and Regulatory Reform.
Sectoral Guidelines and Regulations
The sectoral guidelines and regulations set out specific State aid rules and regulations for specific sectors and these take precedence over the horizontal frameworks, block exemption regulations and De minimis Regulation.
The following sectors have specific State Aid rules:
- Agriculture
- Aquaculture/Fisheries
- Audio-visual (Cinema/TV production and Broadcasting)
- Postal services
- Coal
- Shipbuilding
- Transport
Aid awarded under the sectoral rules may require notification to the Commission.
Disclaimer:
The information provided above is correct at the date of publication. One North East takes no responsibility for any reliance on the information above and any third party is recommended to obtain their own independent legal advice on State Aid.
