state aid rules - taftie · state aid modernisation (sam) 2012-14 - objectives three objectives:...
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State Aid Rules
Webinar TAFTIE Academy
22th of October 2015
Maija Lönnqvist, Tekes
Topics of the seminar
1) What is state aid?
2) State aid modernisation
3) R&D rules
4) General Block Exemtion Regulation: general
5) GBER: R&D rules
6) R&D&I Framework: What is (or is not) state aid?
7) De minimis regulation
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What is state aid?
According to Article 107(1) TFEU State aid is any aid to an undertaking
in any form whatsoever when
1. it is granted by a Member State or through State resources
2. it favours certain undertakings or the production of certain goods
3. it distorts or threatens to distort competition
4. it affects trade between Member States
State Aid Modernisation (SAM) 2012-14 -
objectives
Three objectives:
(i) to foster sustainable, smart and inclusive growth in a
competitive internal market;
(ii) to focus Commission ex ante scrutiny on cases with the
biggest impact on internal market whilst strengthening the
Member States cooperation in State aid enforcement;
(iii) to streamline the rules and provide for faster decisions.
State aid control should more effectively target sustainable growth-
enhancing policies while encouraging budgetary consolidation, limiting
distortions of competition and keeping the single market open.
State aid modernisation – main changes
Common principles for assessing the compatibility of aid with the internal
market were identified
− contribution to a well-defined objective of common interest
− need for State intervention
− appropriateness of the aid measure
− incentive effect
− proportionality of the aid (aid to the minimum)
− avoidance of undue negative effects on competition and trade between Member
States
− transparency of aid
State aid guidelines revised according to these new principles
• Guidelines for Rescue and restructuring aid, Regional Aid, Environmental and Energy
Aid, Broadband, Aviation, Agriculture, Promotion of Important Projects of Common
European Interest (IPCEI) and Risk Finance as well as Framework for Research,
Development and Innovation
State aid modernisation – main changes
The main regulations were modernized
• GBER
• De minimis regulation
• Enabling regulation
• Procedural Regulation
• Implementing Regulation
The notion of State aid was to be clarified and better explained (draft)
Transparency of state aid awards was increased
The Member States are required to evaluate their main aid schemes
The Commission has launched a partnership with the Member States on
the implementation of the SAM. A High Level Forum between the
Commission and the Member States has been set up for regular
discussions.
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Relevant rules for R&D&I aid
General Block Exemption Regulation
R&D&I Framework
De Minimis Regulation
Detailed rules of different instruments are included in the GBER
The Framework provides mainly guidance on what is considered
state aid and how notified aid measures are assessed
Most R&D&I schemes can be funded under the GBER
De minimis for small projects
General Block Exemption regulation
Applies to :
(a) regional aid;
(b) aid to SMEs in the form of investment aid, operating aid and SMEs' access to
finance;
(c) aid for environmental protection;
(d) aid for research and development and innovation;
(e) training aid;
(f) recruitment and employment aid for disadvantaged workers and workers with
disabilities;
(g) aid to make good the damage caused by certain natural disasters;
(h) social aid for transport for residents of remote regions;
(i) aid for broadband infrastructures;
(j) aid for culture and heritage conservation;
(k) aid for sport and multifunctional recreational infrastructures; and
(l) aid for local infrastructures.
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Evaluation plan (Art. 1.2)
For large aid schemes (annual budget over EUR 150 million), an
evaluation plan must be notified to the Commission
A scheme is in force only six months unless the Commission accepts
the evaluation plan
'evaluation plan' means a document containing at least the following:
• the objectives of the aid scheme to be evaluated,
• the evaluation questions, the result indicators and the envisaged
methodology to conduct the evaluation,
• the data collection requirements
• the proposed timing of the evaluation including the date of submission of the
final evaluation report,
• the description of the independent body conducting the evaluation or the
criteria that will be used for its selection and
• the modalities for ensuring the publicity of the evaluation.
Lessons learnt on the evaluation plan (case Tekes)
Pre-notification is essential
Concentrate: evaluate the aid scheme in question (not all schemes)
Use the form provided by the Commission
Define the scheme and its objectives
Define the exact evaluation questions, methodology and the result
indicators as well as the (statistical) data sources
Evaluate the indirect and negative effects as well as appropriateness
of the chosen aid instruments
Mid-term evaluation is needed
Discuss with the Commission, preferably in advance!
Certain exclusions (Art. 1.4)
The GBER does not apply to:
aid schemes which do not explicitly exclude the payment of individual
aid in favour of an undertaking which is subject to an outstanding
recovery order following a previous Commission decision declaring an
aid illegal and incompatible with the internal market (Deggendorf clause)
aid to undertakings in difficulty, e.g.
• A company that has lost more than half of its subscribed share capital
• A company that is subject to collective insolvency proceedings
These provisions must be included in the national legislation!
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Remember also (Art. 1.5)
The GBER does not apply to State aid measures, which entail, by
themselves, by the conditions attached to them or by their financing
method a non-severable violation of Union law, in particular:
(a) aid measures where the grant of aid is subject to the obligation for
the beneficiary to have its headquarters in the relevant Member State or
to be predominantly established in that Member State; However, the
requirement to have an establishment or branch in the aid granting
Member State at the moment of payment of the aid is allowed.
(b) aid measures where the grant of aid is subject to the obligation for
the beneficiary to use nationally produced goods or national services;
(c) aid measures restricting the possibility for the beneficiaries to exploit
the research, development and innovation results in other Member
States.
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Definition of an aid scheme (Art. 2.15)
'aid scheme' means any act on the basis of which, without further
implementing measures being required, individual aid awards may be
made to undertakings defined within the act in a general and abstract
manner and any act on the basis of which aid which is not linked to a
specific project may be granted to one or several undertakings for an
indefinite period of time and/or for an indefinite amount;
Details of an aid scheme must be included in the national legislation
even though it follows the provisions of the GBER!
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Important Articles
Art. 4 Notification thresholds: higher than before
Art. 5 Transparency of aid instruments
Art. 6 Incentive effect :
• Aid shall be considered to have an incentive effect if the beneficiary has
submitted a written application for the aid to the Member State concerned
before work on the project or activity starts.
• No specific rules for aid to large companies in aid schemes
• Minimum requirements for applications
Art 7. Aid intensity and eligible costs
• The eligible costs shall be supported by documentary evidence which shall
be clear, specific and contemporary
Art. 8 Cumulation
• More flexible rules on cumulation
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Publication and information (Art.9)
The Member State shall ensure the publication on a comprehensive State
aid website, at national or regional level of:
(a) the summary information in the standardised format provided to the
Commission via the electronic reporting system after the aid scheme has
come to use or a link providing access to it;
(b) the full text of each aid measure, or a link providing access to the full
text;
(c) the information defined in Annex III on each individual aid award
exceeding EUR 500 000.
Member States shall comply with the provisions of this Article by 1.7.2016.
Publication
The following information on individual awards shall be published:
Name of the beneficiary
Beneficiary's identifier
Type of enterprise (SME/large) at the time of granting
Region in which the beneficiary is located, at NUTS level II
Sector of activity at NACE group level
Aid element, expressed as full amount in national currency
Aid instrument (Grant/Interest rate subsidy, Loan/Repayable
advances/Reimbursable grant, Guarantee, Tax advantage or tax exemption,
Risk finance, Other (please specify))
Date of granting
Objective of the aid
Granting authority
Reference of the aid measure
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Reporting (Art. 11) and Monitoring (Art. 12)
Member States shall transmit to the Commission:
(a) via the Commission's electronic notification system, the summary
information about each aid measure exempted under this Regulation in
the standardised format, together with a link providing access to the full
text of the aid measure, including its amendments, within 20 working days
following its entry into force;
(b) an annual report, in electronic form, on the application of this
Regulation
Member States shall keep detailed records with the information and
supporting documentation necessary to establish that all the conditions
laid down in this Regulation are fulfilled for 10 years from the date on
which the last aid was granted under the scheme.
The Member State concerned shall provide the Commission within a
period of 20 working days with all the information and supporting
documentation which the Commission considers necessary to monitor
the application of this Regulation.
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Aid for R&D projects (art. 25)
Different stages
(a) fundamental research, aid intensity max. 100 %;
(b) industrial research, max. 50 %;
(c) experimental development, max. 25 %;
(d) feasibility studies, max 50 %.
Bonuses:
10/20% SMEs
15 for collaboration or public results
Aid for R&D projects (Art. 25)
Eligible costs
personnel costs
costs of instruments and equipment to the extent and for the period
used for the project (or depreciation costs)
Costs for of buildings and land, to the extent and for the duration
period used for the project (or depreciation costs)
costs of contractual research, knowledge and patents, costs of
consultancy and equivalent services used exclusively for the project
additional overheads and other operating expenses, including costs of
materials, supplies and similar products,incurred directly as a result of
the project
The eligible costs for feasibility studies shall be the costs of the study
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Aid to research infrastructures (Art. 26)
Research infrastructure means facilities, resources and related services
• that are used by the scientific community to conduct research in their
respective fields and covers
• scientific equipment or sets of instruments,
• knowledge-based resources such as collections, archives or structured
scientific information,
• enabling information and communication technology-based infrastructures
such as grid, computing, software and communication, or
• any other entity of a unique nature essential to conduct research.
• such infrastructures may be 'single-sited' or 'distributed'
Aid to research infrastructures (Art. 26)
Aid for the construction or upgrade of research infrastructures that
perform economic activities
Eligible costs: investment costs in intangible and tangible assets.
Aid intensity max. 50% of the eligible costs.
The infrastructure must be open to several users and granted on a
transparent and non-discriminatory basis for a market price.
The financing, costs and revenues of economic and non-economic
activities of the infrastructure shall be accounted for separately
Aid for innovation clusters (Art. 27)
‘innovation clusters’ are structures or organised groups of independent
parties designed to stimulate innovative activity through promotion,
sharing of facilities and exchange of knowledge and expertise and by
contributing effectively to knowledge transfer, networking, information
dissemination and collaboration in the cluster;
Access to the cluster's premises, facilities and activities shall be open
to several users and be granted on a transparent and non-
discriminatory basis for the market price or reflecting the costs
Aid is granted exclusively to the legal entity operating the innovation
cluster (cluster organisation)
Aid for innovation clusters (Art. 27)
Investment aid, max 50%
• for the construction or upgrade of innovation clusters.
• investment costs in intangible and tangible assets.
Operational aid, max. 50 %
• for the operation of innovation clusters. It shall not exceed ten years.
The eligible costs shall be the personnel and administrative costs
(including overhead costs) relating to:
(a) animation of the cluster to facilitate collaboration, information sharing
and the provision of customised business support services;
(b) marketing of the cluster to increase participation of new organisations and to
increase visibility;
(c) management of the cluster's facilities; organisation of training programmes,
workshops and conferences to support knowledge sharing and networking
and transnational cooperation.
Innovation aid to SMEs
The eligible costs shall be the following:
(a) costs for obtaining, validating and defending patents and
other intangible assets;
(b) costs for secondment of highly qualified personnel from a
research and knowledge-dissemination organization or a large
enterprise, working on research, development and innovation
activities in a newly created function within the beneficiary and
not replacing other personnel;
(c) costs for innovation advisory and support services;
The aid intensity shall not exceed 50% of the eligible costs.
For innovation advisory and support services, the aid intensity can be
increased up to 100% of the eligible costs, total amount of aid max.
EUR 200 000 per undertaking within any three year period.
R&D&I framework
‘research and knowledge dissemination organisation’ or ‘research
organisation’ means an entity (such as universities or research
institutes, technology transfer agencies, innovation intermediaries,
research-oriented physical or virtual collaborative entities), irrespective
of its legal status (organised under public or private law) or way of
financing, whose primary goal is to independently conduct
fundamental research, industrial research or experimental
development or to widely disseminate the results of such activities by
way of teaching, publication or knowledge transfer. Where such entity
also pursues economic activities, the financing, the costs and the
revenues of those economic activities must be accounted for
separately. Undertakings that can exert a decisive influence upon
such an entity, for example in the quality of shareholders or members,
may not enjoy a preferential access to the results generated by it.
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R&D Framework: What is considered state aid?
Research organisations and infrastructures are recipients of State aid
if their public funding fulfils all conditions of Article 107(1) of the Treaty.
• must qualify as an undertaking: carries out an economic activity consisting
of offering products or services on a given market
If the same entity carries out of both economic and non-economic
activities, the two kinds of activities and their costs, funding and
revenues must be clearly separated in order to avoid the cross-
subsidisation of the economic activity
Generally considered non-economic:
• Primary activities of reserach organisations, incl. education, independent
research, wide non-exclusive dissemination of results
• Knowledge transfer activities
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R&D&I Framework: Indirect State aid to undertakings
Contract research:
In contract research, an undertaking typically specifies the terms and
conditions of the contract, owns the results of the research activities
and carries the risk of failure
No State aid to the undertaking if
• the research organisation receives payment of an adequate remuneration for
its services, particularly where one of the following conditions is fulfilled:
(a) the research organisation provides its research service or contract
research at market price or
(b) where there is no market price, the research organisation provides
its research service or contract research at a price which
• reflects the full costs of the service and generally includes a margin
• or is the result of arm’s length negotiations
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R&D&I Framework: Indirect State aid to undertakings
Collaborative research
No state aid if one of the following conditions is fulfilled:
(a) the participating undertakings bear the full cost of the project, or
(b) the results of the collaboration which do not give rise to IPR may
be widely disseminated and any IPR resulting from the activities of
research organisations are fully allocated to those entities, or
(c) any IPR resulting from the project, as well as related access rights
are allocated to the different collaboration partners in a manner which
adequately reflects their work packages, contributions and respective
interests, or
(d) the research organisations receive compensation equivalent to the
market price for the IPR which result from their activities and are
assigned to the participating undertakings.
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R&D&I Framework : Defining the market price
The compensation received is equivalent to the market price if it
enables the research organisations to enjoy the full economic benefit
of those rights, where one of the following conditions is fulfilled:
(a) the compensation is established by means of an open,
transparent and non-discriminatory competitive sale procedure, or
(b) an independent expert valuation confirms that the amount of the
compensation is at least equal to the market price, or
(c) the research organisationcan demonstrate that it effectively
negotiated the compensation, at arm’s length conditions, in order to
obtain the maximum economic benefit or
(d)in cases where the collaborating undertaking has a right of first
refusal and the research organisations exercise a reciprocal right to
solicit more economically advantageous offers from third parties so
that the undertaking has to match its offer accordingly
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De minimis regulation
Applicable to all sectors
Maximum amount of aid EUR 200 000 over period of three fiscal
years
Grants can be granted to undertakings in difficulty; limitations for
loans.
May be granted in different forms of aid – gross grant equivalent
May be cumulated with other state aid
The beneficiary must be informed of the de minimis nature of aid
The beneficiary must declare any other de minimis aid it has
received during the two previous fiscal years and the current fiscal
year
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Useful links
GBER http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=OJ:JOL_2014_187_R_0001&from=EN
De minimis regulation
http://ec.europa.eu/competition/state_aid/legislation/de_minimis_reg
ulation_en.pdf
R&D&I Framework http://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=OJ:C:2014:198:FULL&from=EN
Notion of aid
http://ec.europa.eu/competition/consultations/2014_state_aid_notio
n/draft_guidance_en.pdf
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