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State aid procedural rules

State aid procedural rules

 

SUMMARY OF:

Regulation (EU) No 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty

WHAT IS THE AIM OF THE REGULATION?

  • Known as the general block exemption regulation* (GBER), it seeks to enable EU governments to give higher amounts of public money to a wider range of companies without having to request prior permission from the European Commission.
  • As a general rule, except for very small amounts, State aid must be notified to and cleared by the Commission before it is granted. The regulation exempts EU countries from this notification obligation, as long as all the GBER criteria are fulfilled.
  • The exemption is designed to reduce administrative burdens on national and local authorities and to encourage EU governments to channel aid towards economic growth without giving recipients an unfair competitive advantage.

KEY POINTS

Scope

The regulation covers the following categories and types of aid measures:

  • regional aid;
  • aid to small and medium-sized enterprises (SMEs);
  • aid for access to finance for SMEs;
  • aid for research and development and innovation;
  • training aid;
  • aid for disadvantaged workers and for workers with disabilities;
  • aid for environmental protection;
  • aid to make good the damage caused by certain natural disasters;
  • social aid for transport for residents of remote regions;
  • aid for broadband infrastructure;
  • aid for culture and heritage conservation;
  • aid for sport and multifunctional recreational infrastructure;
  • aid for local infrastructures.

Common rules

  • The regulation outlines sectors and measures to which it does not apply, e.g.:
    • aid to export-related activities;
    • aid contingent upon the use of domestic goods over imported goods;
    • aid to facilitate the closure of uncompetitive coal mines;
    • an undertaking which is subject to an outstanding recovery order;
    • aid to undertakings in difficulty.
  • Measures adopted on the basis of the GBER do not have to be notified. However, when the amount for an individual award per undertaking or per project exceeds the notification thresholds set by the regulation, individual notification to the Commission and its detailed assessment are necessary before the measure can be granted.
  • Aid must be transparent — it should be possible to calculate the precise gross grant equivalent of the aid before the event without any risk assessment.
  • Aid must have an incentive effect — it may not be granted once work on the project or activity has started. For large enterprises, it must change their behaviour, not just subsidise activities they would have undertaken anyway. This could be done by increasing the scope of the project/activity, the total amount spent or the speed of completion, for example.
  • Aid intensity and eligible costs shall be calculated before any deduction of tax or other charge. The eligible costs must be supported by documentary evidence that is clear, specific and up to date.
  • Cumulation of aid under the GBER with any other State aid in respect of the same eligible costs is acceptable if such cumulation does not result in exceeding the highest aid intensity or amount applicable to this aid under the GBER.
  • EU countries must publish a summary information sheet, the full text of each State aid measure and the information on each individual aid award that exceeds €500,000.
  • Transparency — EU countries have to publish information on individual aid awards above €500,000 that were awarded after 1 July 2016 (see the State Aid Transparency Public Search in all languages and the national or regional transparency websites).
  • Monitoring — The Commission may withdraw the benefit of the block exemption if an EU country does not fulfil the common and specific rules of the regulation.
  • Reporting — EU countries have to submit to the Commission a summary information sheet about each aid measure exempted under the regulation within 20 working days following the entry into force of the measure. They must also submit annual reports on the application of the regulation.

Amendment of the regulation

Regulation (EU) 2017/1084:

  • amends Regulation (EU) No 651/2014:
    • extending its scope to cover aid for port and airport infrastructure;
    • increasing the notification thresholds for
      • aid for culture and heritage conservation
      • aid for sport and multifunctional recreational infrastructures and
      • regional operating aid schemes for outermost regions;
  • amends Regulation (EU) No 702/2014 as regards the calculation of eligible costs.

EU countries can now make public investments without prior control by the Commission:

  • in sea ports, of up to EUR 150 million;
  • in inland ports, of up to EUR 50 million;
  • in regional airports handling up to 3 million passengers per year; and
  • in small airports handling up to 200 000 passengers per year to cover operating costs.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 July 2014.

BACKGROUND

The GBER is a cornerstone of the Commission’s State aid modernisation reform, which aims to promote economic growth and to concentrate EU approval procedures on large-scale aid cases that could lead to unfair competition. Under the legislation dating from 2008, which the current GBER replaces, some 40% of annual State aid did not require prior approval.

Since 2015, more than 96% of new measures, for which expenditure has been reported for the first time, fell under the GBER.

For more information, see:

KEY TERMS

General block exemption regulation: legislation setting out the terms and conditions of national aid which does not require prior Commission authorisation.

MAIN DOCUMENT

Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, pp. 1-78)

Successive amendments to Regulation (EU) No 651/2014 have been incorporated into the original text. This consolidated version is of documentary value only.

last update 09.09.2019

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