Giving state aid is time consuming and complex. Thinking about state aid rules early on will help minimize delays. The Commission has the power to recover incompatible State aid. Be sure that you check whether the envisaged RIS3 policy measures and projects comply with State aid rules before paying out money out.
1. Collection of background information
- Which EU state aid laws are relevant to the RIS3 under development?
- These rules can be found in this tool under the sections “European Commission’s guidelines and regulations on State Aid” and “Legal Basis”.
2. Determination of whether specific RIS3 policy measures and projects constitute any form of state aid
- Does the RIS3 under development foresee the direct or indirect provision of financial support to any sector or organization in the region?
- More particularly, does the RIS3 under development foresee the provision of grants, loans, tax breaks (including enhanced capital allowances), the use or sale of a state asset for free or at less than market price to an organization that does anything commercial? Examples include: are you creating a fund to give loans where the banks do not? Are you planning to set up a scheme or body to give financial assistance? Are you setting up a scheme to stimulate growth in a target sector in the region? Are you providing financial incentives to companies?
- Is the above financial support granted by the state or through state resources?
- “Granted by the State” means by any public or private body controlled by the state. “State resources” is broad: any measure with an impact on the state budget or where the state has significant control are included, for example, tax exemptions, Lottery funding and the EU structural Funds.
- Does the assistance give an advantage to one or more undertakings over others?
- An “undertaking” is any organisation engaged in economic activity. This is about activity rather than legal form, so non-profit organisations, charities and public bodies can all be undertakings, depending on the activities they are involved in. An undertaking can also include operators and ‘middlemen’ if they benefit from the funding. “Economic activity” means putting goods or services on a market. It is not necessary to make a profit to be engaged in economic activity: if others in the market offer the same good or service, it is an economic activity. Support to an organisation engaged in a non-economic activity isn’t State aid, e.g. support to individuals through the social security system is not state aid. An “advantage” can take many forms: not just a grant, loan or tax break, but also use of a state asset for free or at less than market price. Essentially, it is something an undertaking could not get in the normal course of business.
- Does the assistance distort or have the potential to distort competition?
- If the assistance strengthens the recipient relative to its competitors then the answer is likely to be that it actually constitutes a form of state aid. The “potential to distort competition” does not have to be substantial or significant: may include relatively small amounts of financial support to firms with modest market share.
- Does the assistance affect trade between Member States?
- The interpretation of this is broad: it is enough that a product or service is tradable between Member States, even if the recipient does not itself export to other EU Markets.
3. Actions to do if it is found that RIS3 policy measures and projects may constitute any form of state aid
- Can you redesign it so that it is not a form of state aid?
- Complying with state aid rules can add time to the design and implementation of RIS3, an mean that the size of the award to be made might be limited. Can other mechanisms, such as public procurement be used to achieve the envisaged goal?
- If State aid cannot be avoided, adequately justify the direction of state aid to certain foreseen RIS3 policy measures and projects.
- Is the direction of state aid to certain foreseen RIS3 policy measures and projects justifiable? For example, does it help overcome a genuine market failure in a specific sector? Does it contribute to limiting a market distortion? Does it change the behaviour of an organization for the better without affecting competition negatively? Does it render potential beneficiaries overly reliant on aid or will it incentivized them to innovate and become more efficient?
- Determine whether the foreseen state aid complies with as set of already approved mechanism for state aid.
- Use one of the approved mechanisms set up to allow State aid in particular circumstances. Instances include the De minimis regulation and block exemption regulation. The De Minimis Regulation allows small amounts of aid to be given to an undertaking for a wide range of purposes. The General Block Exemption Regulation (GBER) is a useful mechanism that provides a simple way of providing assistance for a range of aid measures considered not to unduly distort competition.
- Take the necessary actions to ensure legal granting of state aid and seek approval for the particular scheme from the European Commission.
- Aid measures can only be implemented after approval by the Commission.
In all cases, aid must be given within the parameters of the relevant guidelines and frameworks set out by the Commission, and must be notified and approved by the Commission before it can be given. Seek advice from specialist teams in relevant government authorities and departments. Tailored advice may require the provision of independent legal advice.
4. Final Remarks
Please note that this checklist of considerations to make with respect to EU state aid rules when developing RIS3 is not exhaustive. We do not assume responsibility in case of incompatibility of RIS3 policy measures and projects with EU state aid law.
Information to compile this checklist has been retrieved from:
- Commission website: ec.europa.eu/competition/state_aid/overview/index_en.html
- State aid Manual of Department for Business, Energy & Industrial Strategy, UK Government: https://www.gov.uk/state-aid
- “State Aid”, DG Competition, European Commission.
- Information on State aid control, legislation, cases, data and policy analysis, tax rulings, cooperation with national courts, complaints.
- “Communication from the Commission, Framework for State aid for research and development and innovation”, DG Competition, European Commission.
- “Analytical Grids on the application of State aid rules to the financing of infrastructure projects”, DG Competition, European Commission, Staff working document, Grid No 4, September 2015.
- The document reflects the current rules and decision practices in application of State aid rules to construction and upgrade of research infrastructure and innovation clusters. The content does not prejudge possible developments in the State aid enforcement practice and the application of public procurement rules.
- “Guidance Note to the COCOF on Verification of Compliance with State Aid Rules in Infrastructure Cases”, DG Regio, European Commission, Working document COCOF_12-0059-01, 21.11.2012
- The purpose of this note is to give guidance on the treatment of infrastructure projects under Cohesion policy rules.
- “State Aid Transparency Public Search”, DG Competition, European Commission
- The state aid Transparency public search page gives access to state aid individual award data provided by Member States in compliance with the European transparency requirements for state aid. The purpose of the transparency requirements is to promote accountability of granting authorities and to reduce uncertainties on the market for state aid by allowing citizens and companies to access easily relevant information about awarded aid, such as name of the beneficiary, amount, location, sector and objective.
- “Guidance on State aid in European Structural and Investment (ESI) Funds Financial instruments in the 2014-2020 programming period”. Guidance on European Structural and Investment Funds 2014-2020 – Financial Instruments.
- The purpose of this Staff Working Document is to facilitate the application of State aid rules in the field of financial instruments and to point to different possibilities of achieving State aid compliance.
- “Public Procurement and State Aid (general EAC 4&5)”. Guidance on European Structural and Investment Funds 2014-2020 – Questions & Answers on Ex-ante Conditionalities.
- This list of frequently asked questions is based on comments received from Member States (MS) on Part II of the Guidance on ex ante conditionalities as regards public procurement and state aid.
- Article 107 of the Treaty on the Functioning of the European Union (TFTU)
- Article 108 of the Treaty on the Functioning of the European Union (TFTU)
- Article 109 of the Treaty on the Functioning of the European Union (TFTU)
- Article 4(3) of the Treaty on European Union (TEU)
- European Commission Regulation (EU) N°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 Text with EEA relevance
- European Council Regulation (EU) 2015/1589 of 13 July 2015
- Laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union.
- European Commission Communication C (2014) 3282, 21.5.2014
- Framework for state aid for research and development and innovation.
- “State Aid Scoreboard 2016”, DG Competition, European Commission.
- The 2016 State Aid Scoreboard comprises aid expenditure made by Member States before 31.12.2015 and which falls under the scope of Article 107(1) TFEU. The data is based on the annual reporting by Member States pursuant to Article 6(1) of Commission Regulation (EC) 794/2004. Expenditure refers to all existing aid measures to manufacturing industries, services, agriculture and fisheries, for which the Commission adopted a formal decision or received an information fiche from the Member States in relation to measures qualifying for exemption under the General Block Exemption Regulation. In practice the figures below exclude most of the aid to railways and services of general economic interest. Also crisis aid to the financial sector is dealt with separately.
- “Supplementary tables for government interventions to support financial institutions”, Eurostat, European Commission.
- Since 2009 Eurostat has regularly collected and published data on government interventions to support financial institutions. The data are presented in two parts of the supplementary tables. Part 1 shows the actual impact of interventions on government deficit. Part 2 shows the actual and potential impact on government debt. Eurostat publishes individual tables for EU Member States (where there were reportable interventions) and a summary table with the aggregated data for the EU and the Euro area.
As part of the State aid control, DG COMP allows to submit a complaint form online with regards compliance to EU rules and equal application of exemptions across the EU.
(operational programmes and territorial cooperation programmes)
- National, Regional and Local Managing authorities (ERDF, CF).
- Member States are responsible for managing programmes that are supported by Cohesion Policy. A designated managing authority provides information on the programme, selects projects and monitors implementation. Select a country to find out which organisations are responsible.
- Operational Programmes by country/region, type, theme and thematic objective (ERDF, CF).
- Summaries of the Operational Programmes adopted by the European Commission at the beginning of a programming period can be found below. The programmes are prepared by each Member State and/or region, and financed under the European Regional Development Fund or the Cohesion Fund.
- A Beginner’s Guide to EU Funding.
- Small companies (SMEs), non-governmental organisations (NGOs), young people, researchers, farmers, public bodies and other categories can benefit from this guide. With references to websites about EU funding opportunities, available for the period 2014-2020, this guide provides basic information, especially: how & where to apply, other general rules (eligibility, etc.).
- EU Budget in my country.
- These pages highlight key information on the EU budget and a number of projects it finances in all the 28 member states. The EU Budget contributes to implementing the EU policies that are intended to improve the lives of Europeans as well as to have a positive influence in the world. Through a joint coordinated effort of both member states and the EU institutions, the EU Budget also finances projects covering a wide range of fields, from employment, regional development, research and education to environment, humanitarian aid and many others. In order to be able to finance such welfare-increasing activities, all member states contribute to the common EU budget. The allocated money is then spent on areas of common interest thanks to the coordination and collaboration of the member states and the EU institutions.
- Rescue and restructuring aid state aid rules – Frequently asked questions (European Commission)
- Research & Development & Innovation state aid rules – Frequently asked questions (European Commission)
- Environmental and Energy state aid rules – Frequently asked questions (European Commission)
- Risk Finance state aid rules Frequently – asked questions (European Commission)
- State aid rules for RDI. Selection of questions received from Member States, European Commission
- General Block Exemption Regulation (GBER): Frequently Asked Questions (European Commission)
A guide to GBER regulation meant to familiarise authorities and beneficiaries with the GBER and help them to apply the rules to their specific situation.
- EU State Aid Rules FAQs, Department of Jobs, Enterprise and Innovation, (Ireland)
- State Aid FAQs (Scottish Government)
- State Aid Cased search, DG Competition, European Commission
- This multi-criteria search tool provides information on and access to all state aid cases that have been the object of a Commission decision since 1st January 2000. In addition, it provides information on block exemption cases registered by the Commission. Ongoing cases for which no decision has yet been taken are not included. The search tool is updated daily and thus ensures that the public has timely access to the most recent state aid decisions. You can find cases handled by all Commission Directorates-General responsible for state aid policy, namely: DG Competition, DG Agriculture and Rural Development, DG Fisheries and Maritime Affairs.
- Beneficiaries of European Union Cohesion Policy, DG Regio, European Commission
- European Social Fund (ESF) in your country
- eState aid WIKI
- The eState aid WIKI is an IT-tool to provide a secure communication channel for informal exchanges regarding State aid matters between the Commission’s services on the one side and the Member States, EFTA countries (including the EFTA surveillance authority (ESA)) on the other through their designated National Competent Bodies (“NCBs”). The eState aid WIKI does not encompass the exchange of information regarding specific cases, i.e. information about specific companies or individuals. Access to the eState aid WIKI is open to a limited number of users only, as controlled by DG COMP. The management and operation of the eState aid WIKI involves the processing of personal data of authorised users of the system for administration purposes only.
- Ambroziak, A.A. (2016), “Recent Changes and Developments in State Aid for Research, Development and Innovation in the European Union”, Studia Europejskie, No. 4, pp. 73-94.
- Buts, C., Jegers, M. and Joris, T. (2011), “Determinants of the European Commission’s state aid decisions”, Journal of Industry, Competition and Trade, Vol. 11 No. 4, pp. 399-426.
- Colomb, C. and Santinha, G. (2014), “European Union competition policy and the European territorial cohesion agenda: An impossible reconciliation? State aid rules and public service liberalization through the European spatial planning lens”, European Planning Studies, Vol. 22 No. 3, pp. 459-480.
- Davies, W. (2013), “When Is a Market Not a Market?: ‘Exemption’, ‘Externality’ and ‘Exception’ in the Case of European State Aid Rules”, Theory, Culture & Society, Vol. 30 No. 2, pp. 32-59.
- Heimler, A. and Jenny, F. (2012), “The limitations of European Union control of state aid”, Oxford Review of Economic Policy, Vol. 28 No. 2, pp. 347-367.
- Hölscher, J., Nulsch, N. and Stephan, J. (2010), “State Aid in the Enlarged European Union. An Overview (No. 24/2010)”, IWH Discussion papers.
- Veugelers, R. (2014), “Undercutting the future? European research spending in times of fiscal consolidation (No. 2014/06)”, Bruegel Policy Contribution.
- von Wendland, B. (2015), “New Rules for State Aid for Research, Development and Innovation”, Eur. St. Aid LQ, pp. 25.
- Lexxion – State Aid. No access link is provided because access to the eState aid WIKI is open to a limited number of users only, as controlled by DG COMP. eState aid WIKI users are authorised European Commission staff and staff from National Competent Bodies or the ESA (globally referred to as “NCB”).
- Leiden University on Coursera – Rethinking International Tax Law – Week 5: European Union law & fiscal state aid
- Urban Innovative Actions, Webinar n°3 (16 February 2017) – Building your intervention logic and drafting your budget