De minimis aid for services of general economic interest

SUMMARY OF:

Regulation (EU) No 360/2012 — application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to services of general economic interest

Article 107 TFEU — Aids granted by states

Article 108 TFEU — Aids granted by states

WHAT IS THE AIM OF THE REGULATION?

Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) sets out which measures constitute State aid.
Article 108(3) TFEU requires, as a general principle, State aid to be notified to the European Commission so that it can assess whether the aid is compatible with the internal market.
Regulation (EU) No 360/2012 complements the general regulation on de minimis aid, i.e. small State aid amounts* (Regulation (EU) No 1407/2013 — see summary). Both regulations provide that aid below a certain threshold can be exempted from the notification requirement.
However, this regulation applies specifically to aid granted to undertakings providing services of general economic interest (SGEIs), which are services that meet social needs such as health and long-term care, childcare, access to and reintegration in the labour market, social housing and the care and social inclusion of vulnerable groups. This regulation increases legal certainty and reduces the administrative burden for granting compensation for small SGEIs.

KEY POINTS

Article 2 of Regulation (EU) 2015/1588 on the application of Articles 107 and 108 TFEU to certain types of State aid (see summary) allows the Commission to include a de minimis rule*in any regulation it adopts. Under this rule, small aid amounts are considered not to be State aid because they have no effect on competition and/or trade between EU Member States; they therefore are not subject to the notification requirement provided for in Article 108(3) TFEU.
Regulation (EU) No 360/2012 complements the general de minimis regulation and applies to aid granted to organisations providing a SGEI. Such aid does not need to be notified if the total amount of de minimis aid granted to an organisation providing SGEIs does not exceed €500,000 over any period of 3 fiscal years and the conditions on cumulation are met. The ceiling for exempted aid set out in Regulation (EU) No 1407/2013, in contrast, is only €200,000.

Monitoring

If a Member State intends to grant de minimis aid under this regulation, it must inform the organisation concerned in writing of:
- the proposed amount of aid;
- the SGEI for which the aid is granted;
- the de minimis character of the aid.
Prior to granting the aid, the Member State must obtain a declaration from the organisation in question, in written or electronic form, about any other de minimis aid received under this regulation or under other de minimis regulations during the previous 2 fiscal years and the current fiscal year. The Member State must check that the new sum will not increase the total amount of de minimis aid granted to the undertaking above the ceiling of €500,000.
Alternatively, Member States can set up a central register for all de minimis aid granted in their territory.

Time-bound derogation in the context of the COVID-19 pandemic

Regulation (EU) 2020/1474 amends Regulation (EU) No 360/2012 to allow undertakings which were not in difficulty on 31 December 2019 but which became undertakings in difficulty in the period from 1 January 2020 to 30 June 2021 as a consequence of the COVID-19 outbreak to remain eligible under Regulation (EU) No 360/2012 for a limited period of time.

FROM WHEN DOES THE REGULATION APPLY?

The period of application was initially to expire on 31 December 2018. The Commission considered that the circumstances underlying the regulation had not substantially changed and therefore adopted Regulation (EU) 2018/1923, which extended the period of application for a further 2 years until 31 December 2020. Amending Regulation (EU) 2020/1474 further extended the period of application of Regulation (EU) No 360/2012 until 31 December 2023.

BACKGROUND

For more information, see:

Services of General Economic Interest (European Commission).

KEY TERMS

De minimis rule. A rule that exempts small subsidies from the obligation of being notified in advance to the Commission for clearance under EU State aid rules.

MAIN DOCUMENTS

Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest (OJ L 114, 26.4.2012, pp. 8–13).

Successive amendments to Regulation (EU) No 360/2012 have been incorporated in the original text. This consolidated version is of documentary value only.

Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title VII — Common rules on competition, taxation and approximation of laws — Chapter 1 — Rules on competition — Section 2 — Aids granted by states — Article 107 (ex Article 87 TEC) (OJ C 202, 7.6.2016, pp. 91–92).

Consolidated version of the Treaty on the Functioning of the European Union — Part Three — Union policies and internal actions — Title VII — Common rules on competition, taxation and approximation of laws — Chapter 1 — Rules on competition — Section 2 — Aids granted by states — Article 108 (ex Article 88 TEC) (OJ C 202, 7.6.2016, pp. 92–93).