Check whether the aid can be given through an established lawful State aid mechanism which does not require a notification to the Commission. These mechanisms are briefly summarised in the 5 question check-list below.
When considering using any of these mechanisms you must check that the aid, in the form proposed, will satisfy the relevant conditions for the mechanism to apply; and that you can comply with any additional administrative requirements associated with the use of the mechanism.
Reference should always be made to the source State aid legislation and guidance and, if in doubt, consult your lawyers or contact
here at Mills & Reeve.Question 1
- Does the aid fall within the De Minimis Regulation
This applies where the recipient receives less than a total of €200,000 in de-minimis aid from any source in a rolling 3 year period.
You must take steps, and have evidence, to show that this limit has not been exceeded. There are also a number of administrative and record keeping requirements which both the giver and recipient of aid must comply with.Question 2
- Does the aid fall within the General Block Exemption Regulation
The categories of aid listed below are within the scope of GBER:
- Regional aid
- Aid to SME’s
- Aid to access to finance for SME’s
- 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 natural disasters
- Social aid for transport for residents of remote regions
- Aid for broadband infrastructures
- Aid for regional airports
- Aid for ports
You must check that any proposed aid complies with all the relevant general and specific conditions of GBER. Specific conditions, which link to the relevant category of aid, include that the aid must:
- be applied towards ‘eligible costs’. The costs which can be treated as ‘eligible costs’ under GBER depend on the relevant aid category;
- not exceed the specified financial ceiling for the relevant category of aid; and
- not exceed the specified aid intensity for the relevant category of aid. The aid intensity is the proportion of “eligible costs” which can be granted in the form of aid.
General GBER conditions include that the aid must:
- be transparent (only certain forms of aid are permitted);
- have an incentive effect; and
- not be cumulated with other aid granted under GBER or the De Minimis Regulation relating to the same eligible costs (GBER contains detailed rules on cumulation).
There are also various other administrative and reporting obligations which must be complied with.Question 3
- Does the aid fit (or can it be re-designed to fit) within an existing Commission approved aid scheme applicable to the UK?
Whilst not an exhaustive list, details of some of these schemes are available on the website for the Ministry of Housing, Communities and Local Government for the period 2014-2020
As with other mechanisms, you must check that any proposed aid will meet the conditions and requirements of the relevant scheme.Question 4
- Are there any other sector specific rules/guidelines which can be applied to avoid the need to notify the aid? For example (this is not an exhaustive list):
In most cases these rules / guidelines explain how the Commission will consider State aid within the relevant sectors including, for example:
- the circumstances when potential aid should first be notified to and approved by the Commission;
- the factors which the Commission would consider when deciding whether notified aid should be approved; and
- the circumstances where potential aid might fall in to the “no aid” category.
- If none of these mechanisms apply to the project, as currently structured, is it possible to re-design the project or State aid measure to fit within one of them?
If none of these mechanisms apply and the project cannot be redesigned to fit within one of them, this is likely to be a notifiable aid which requires notification to, and approval by, the European Commission before any aid is granted.
Notification and approval can be an extremely time-consuming and lengthy process which invariably will impact on the timescales of a project. If you think aid will fall within this category you should consult your lawyers or you can contact
here at Mills & Reeve.