State aid - General Block Exemption consultation and updated de minimis rules

The European Commission has recently published a number of measures as part of its State Aid Modernisation programme, intended to foster growth, to focus enforcement on cases with the biggest impact on the internal market, and to streamline the rules for faster decisions.

Consultation on the General Block Exemption Regulation

In this context, the Commission has published a third consultation on the text of the revised General Block Exemption Regulation (GBER).

Under the GBER, Member States may grant certain unproblematic categories of aid without prior notification to the Commission. The Commission has already carried out three public consultations (in June 2012, May 2013 and July 2013) with a view to updating the current GBER.

The proposed revisions to the GBER under this latest consultation include the following.

• New categories of exempted aid, including innovation aid for large companies, certain aid for broadband infrastructure, aid for culture including audio-visual works, aid for sport, aid to make good the damage caused by natural disasters, and social aid for the transport of residents of remote regions.
• An increase to certain notification thresholds, so that higher aid amounts can be exempted from prior notification requirements.
• Further simplification of the assessment process, so as to cut the administrative burden on Member States and to limit the ex-ante assessment of state aid by the Commission to the largest aid measures, which are most likely to create distortions in the European Single Market.
• Improvements to the ex-post control of exempted aid, including systematically monitoring aid granted under the GBER and carrying out evaluations with Member States as to the effects of the aid.
• Increased transparency around state aid measures by asking Member States to publish lists of the aid beneficiaries.

The Commission estimates that three quarters of today's state aid measures and some two thirds of aid amounts could be exempted under the proposed rules.

The deadline for responding to this consultation is 12 February 2014. The Commission hopes to be in a position to adopt the finalised GBER in the second quarter of 2014. (It has prolonged the validity of the existing GBER until 30 June 2014.)

Adoption of a new state aid de minimis regulation

In the same context, on 18 December 2013, the Commission adopted a revised Regulationde minimis on small aid amounts that fall outside the scope of EU state aid control (the Regulation). Measures that fulfil the criteria of the Regulation do not need to be notified to the Commission for approval before they are implemented.

Following three public consultations, the Commission has decide to leave the central feature of the current regulation, which exempts aid amounts of up to €200 000 per undertaking over a three year period, unchanged. The Commission concluded that increasing this ceiling would carry important risks for competition and trade in the Single Market.

The changes that have been made are intended to simplify the treatment of small aid measures. In particular:

• companies undergoing financial difficulties are no longer excluded from the scope of the Regulation and will therefore be allowed to receive de minimis aid;
• the definition of what constitutes an "undertaking" has been simplified and clarified; and
• subsidised loans of up to €1 million may also benefit from the Regulation if certain conditions are met.

The new Regulation applies from 1 January 2014.

If you require any further details on the GBER Consultation, the updated de minimis rule or any other state aid issues, please do not hesitate to contact one of the lawyers listed below or your usual CMS contact.