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State Aid Update

Print publication

11/09/2013

With the European Commission’s recent updates to its state aid modernisation project there has been plenty to talk about since our last Local Government Newsletter. We summarise recent articles that were published on Reach and on our website. To be alerted to these articles as soon as they are published, make sure you are signed up to Reach. For more details click here.

Most recently, as of 20 August 2013, the Commission’s amendments to the state aid Enabling Regulation (Council Regulation 994/98) and the state aid Procedural Regulation (Council Regulation 659/99) are now in force. The Enabling Regulation has been extended and will now cover, amongst others, aid in favour of:

transport for residents of remote regions
broadband infrastructure
innovation
multifunctional infrastructure.
The Procedural Regulation has been updated, with:

complaints now subject to the ‘interested party rule’ and requiring key information before being lodged
market information tools will now allow the Commission to request targeted information once a formal state aid investigation has opened
the Commission has also been granted the power to undertake sector inquiries where information available provides suspicion that state aid measures may have distorted the market
and finally the co-operation between the Commission and national judges in state aid cases has been formalised.
For more details see our article Major Move Forward for the State Aid Regime.

On top of this, the Commission has also issued a revised second draft of the state aid de minimis regulation, which is again subject to consultation. The revised draft still maintains the current ceiling of €200 000 over three years but amends the definition of ‘single undertaking’ so as to include an exhaustive list of examples. As with the first draft, this version also contains a proposal to introduce a mandatory de minimis register, but now it expands on the detail to be included in the central register, such as an enterprise’s size and the economic sector in which it operates. The proposals in the first draft for a safe-harbour provision remain untouched, although the second draft does clarify that aid comprised in loans shall also be considered transparent de minimis aid if secured by collateral covering at least 50 per cent of the loan (providing the loan does not exceed €500,000 and has a duration of ten years). See our article Revised state aid de minimis regulation published for more detail.