Do Eu State Aid Rules Still Apply

In one of the most important post-Brexit pieces of legislation to date, the Subsidy Control Act will replace EU state aid rules, which require its members to obtain approval for state support to businesses. The rules can be complex and, if misunderstood, this can mean the recovery of State aid and the suspension or withdrawal of aid schemes. This could have serious consequences for the beneficiaries of the aid and the achievement of the political objectives. The United Kingdom has made many important decisions that it must take regarding its approach to the new regime. Possible block exemptions, evaluation criteria and guidelines for grant providers, in particular in sectors where conditions apply, need to be examined in detail. This will be particularly interesting given that the expected revisions of the various EU State aid guidelines are likely to lead to significant variations in the criteria to which subsidy providers are accustomed in these sectors. Admittedly, the UK will not want to apply to UK companies more onerous criteria than those that might apply to their EU competitors in the future. Granting aid as State aid will almost always be longer and more difficult than designing aid in such a way as to avoid it. Some state aid is illegal under EU rules because it distorts competition in a way that harms EU citizens and businesses.

But where unavoidable, state aid can be legally granted by: the guidelines do not replace the original rules and guidelines. It is important that you read the EU State Aid Regulations, which can be found on the European Commission`s website in conjunction with all the guidelines. While Brexiteers argue that abandoning EU state aid rules is one of the biggest benefits of Brexit, critics remain skeptical. Many Conservatives are ideologically opposed to government intervention, despite the Prime Minister`s promise to “level” the cities of England`s North and Midlands with government support. In September 2016, Jeremy Corbyn, then leader of the opposition British Labour Party, called on the government to abandon existing EU state aid rules, saying the rules would be “no longer valid” after Britain left the bloc. [19] Specific rules apply to agriculture where the threshold for notification of aid in the database is EUR 60 000 for primary agricultural production and EUR 30 000 for aquaculture. Read the details of the rules on state aid to agriculture. The use of taxpayer-funded funds to support one or more organisations in a way that confers an advantage over the others may constitute State aid. However, due to the lack of specifications, definitions and, in some cases, clarifications, the WTO case is highly controversial and is more of an exception than a rule. One solution to this problem would be a more comprehensive regime similar to that of the European Union. In this case, the prohibition of state subsidies would occur if the subsidies were anti-competitive and affected international trade.

[11] In 2008, the UK government received permission from the European Commission to grant state aid for the nationalisation of Lloyds TSB during the 2007/08 financial crisis. However, the Commission decided that, since Lloyds TSB`s financial needs arose from the acquisition of HBOS in order for the State aid to be legal, Lloyds TSB had to sell part of its business. [8] Lloyds Bank did this by splitting TSB Bank into a separate company it originally owned and selling it to Banco de Sabadell to remain within EU state aid rules. [16] State aid in the European Union is a subsidy or any other State aid that distorts competition. In EU competition law, the term has a legal meaning in the sense that it refers to any measure which has one of the characteristics of Article 107 of the Treaty on the Functioning of the European Union, since, if it distorts competition or the free market, it is classified by the European Union as unlawful State aid. [1] Measures falling within the definition of State aid are considered unlawful unless they are granted under an exemption or notified by the European Commission. [2] EU competence is a rare case where specific binding state aid control legislation has been introduced. These provisions oblige the Commission, in principle, to authorise all aid, which has proved to be a difficult, if not impossible, task for 27 EU Member States. .