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State Aid - An Introduction

State Aid - An Introduction. Stephen Martin Scottish Government State Aid Unit. Compatible Aid. Article 107(2) & (3) Guidelines and Frameworks Approved schemes General Block Exemption Regulation (GBER) De minimis. Article 107 (2). Aid of a social character

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State Aid - An Introduction

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  1. State Aid - An Introduction Stephen Martin Scottish Government State Aid Unit

  2. Compatible Aid • Article 107(2) & (3) • Guidelines and Frameworks • Approved schemes • General Block Exemption Regulation (GBER) • De minimis

  3. Article 107 (2) • Aid of a social character • Aid to remedy damage by natural disaster/exceptional occurrence • Aid to compensate for division of Germany

  4. Article 107 (3) • Economic development of areas with abnormally low living standards • Promotion of project of common European interest or serious disturbance to economy • Development of certain economic activities/areas • Promotion of culture/heritage • Other categories as specified by EC

  5. Guidelines & Frameworks • Research & Development & Innovation • Regional Aid • Environmental Protection • Risk Capital • Rescue & Restructuring • Sale of Public Land and Buildings • Services of General Economic Interest

  6. Approved Schemes • Property Development • SME Investment • Historic Environment Regeneration • Credit Unions • Renewables Obligation • R&D&I

  7. GBER • Regional Investment • SME Investment & Employment • Consultancy & Trade Fairs • Entrepreneurship • Training • Environmental Protection • R&D&I • Risk Capital • Disadvantaged or Disabled Workers

  8. GBER • If providing aid under GBER, how should this be done? • LAs are the lead partner in LAGs – body able to administer public funds • Administratively, LAs should ensure any aid is compliant with GBER • Overall responsibility for ensuring aid given compliantly should rest with Managing Authority • All Scottish LAs have wide-ranging GBER cover

  9. De minimis • €200k over 3 year, rolling, fiscal period • Limit per recipient, not per project • Useful if no other cover • Can be difficult to administer

  10. Notification • Commission carry out detailed assessment • Considered on face of Treaty • Benefits must outweigh distortions of competition & effect on trade. • Can take > 6 months

  11. Cumulation! • If an undertaking involved in economic activity is receiving State aid from several sources, towards the same eligible costs, this aid must be cumulated; and • The total amount of aid received by the recipient in respect of these eligible costs must not breach the appropriate State aid ceilings for the activity. • LEADER funding must also be cumulated in these calculations.

  12. If State aid is not considered? • Aid can be halted • Any illegal aid must be repaid, with compound interest, by the recipient • Potential action from aggrieved competitors - possibility of recovery order and damages • Undermines UK Government's commitment to tighter State aid control and reduction in aid

  13. Summary • Consider and assess State aid at an early stage in project applications • Consult the Managing Authority if you are not sure, MA may consult SAU • Ensure that there is State aid cover to provide your funding • Be aware of the risks of implementing unapproved aid

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