ESI funds in compliance with State aid rules

Transcription

1 ESI funds in compliance with State aid rules Stephen Moore External expert This training has been organised by EIPA-Ecorys-PwC under the Framework Contract Nr 2013.CE.16 B.AT 044. The opinions expressed are those of the contractor only and do not represent the EC's official position Brussels 2017 Structure of presentation State aid provisions in ESI Funds regulations TFEU provisions Regulations Distribution of functions State aid implications on management verification of ESIF expenditure Alignment with State aid rules State aid control State aid errors Recovery Cumulating State aid with ESIF 1

2 Treaty provisions TFEU 107 (1) Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market. TFEU 174 In order to promote its overall harmonious development, the Union shall develop and pursue its actions leading to the strengthening of its economic, social and territorial cohesion. In particular, the Union shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least favoured regions. Regulation 1303/2013 (CPR) Art.6 Operations supported by the ESI Funds shall comply with: UNION LAW STATE AID & NATIONAL LAW(relating EU law application) 2

3 Regulation 1303/2013 (CPR) Art.2 For the purposes of this Regulation: State aid means Aid falling under Article 107(1) TFEU OR De minimis aid Operations generating net revenue (CPR) Article 61 does not apply if the project is State aid within the meaning of CPR Art 61(8) 3

4 Ex ante conditionality (CPR) Annex XI - PART II: General ex ante conditionalities Area 5 Ex ante conditionality - The existence of arrangements for the effective application of Union State aid rules in the field of the ESI Funds. Criteria for fulfilment 1. Arrangements for the effective application of Union State aid rules; 2. Arrangements for training and dissemination of information for staff involved in the implementation of the ESI funds; 3. Arrangements to ensure administrative capacity for implementation and application of Union State aid rules. Distribution of functions Source: European Court of Auditors. 4

5 Distribution of functions in MS Which institution shall be responsible for: 1. Identification of State aid within the measure? 2. Preparation of State aid measure? 3. Negotiation and notification of the measure to EC? 4. Publication of the measure (e.g. if GBER) where? 5. Assessment of the State aid aspect in the project? 6. Investigating the irregularity linked with State aid? 7. Deciding on amount to be recovered due to State aid non-compliance? 8. Registering in the de minimis register (if MS has a register)? 9. Interpreting State aid requirements? State aid control DG Comp Aid measures can only be implemented after approval by the Commission. Moreover, the Commission has the power to recover incompatible State aid. TFEU Article 108(3) obligation to notify If it has doubts, Commission can investigate Companies and consumers in the European Union may trigger investigations by lodging complaints with the Commission. State Aid Notification System (SANI) State Aid Reporting Interactive (SARI) State Aid Transparency Module (SATM) 5

6 State aid advice & support DG Comp State aid web pages Commission Notice on the notion of State aid GBER FAQ Articles 1 to 35: July 2015 Articles 36 to 58: March 2016 GBER checklists Dedicated IT-platform (estate aid WIKI) TAIEX REGIO PEER 2 PEER Member State s State aid control / advice units Training for Member States DG Comp State aid web pages 6

7 Notion of State aid (2016/C 262/01) Section 1 Introduction Section 2 Notion of Undertaking and Economic Activity Section 3 State Origin Section 4 Advantage Section 5 Selectivity Section 6 Effect on Trade and Competition Section 7 Infrastructure: Some specific clarifications Section 8 Final Provisions GBER FAQ 7

8 DG Comp GBER checklists 1. Regional aid 2. Aid to SMEs 3. Access to finance for SMEs 4. Research, Development and Innovation 5. Training aid 6. Aid to Disadvantaged Workers and Workers with Disabilities 7. Environmental aid 8. Natural Disasters 9. Transport for Residents of Remote Regions 10. Broadband Infrastructures 11. Culture and Heritage Conservation 12. Sport and Multifunctional Infrastructures 13. Local Infrastructures e-state Aid Wiki 8

9 TAIEX REGIO PEER 2 PEER Cumulation of State aid with ESIF Total eligible expenditure Public expenditure Structural funds State budget Other public contribu tion Private resources Priority axis level Public funding (grant) Other public contribut ion Private contributi on Project level State aid Project costs Not eligible expenditure State aid? 9

10 Example 1 Infrastructure project Extension of the Belfast Waterfront Hall 29.5 million project Funded by: Belfast City Council ( million), Tourism NI ( 5.24 million) ERDF ( 13.3 million) No State aid - MEIP Example 2 RDI project Environmental Marketing Solutions (EMS) Design and development of a compact density separator primarily for mixed municipal waste. It separates waste streams into lights and heavies, reducing waste disposal costs. Invest Northern Ireland offered 70,340 of assistance, part funded by the European Regional Development Fund State aid GBER N215/2008 -Grant for Research and Development (Grant for R&D) Programme Programme 50% co-financed by ERDF 10

11 Alignment with State aid rules Results of the monitoring exercises carried out by the DG COMP, Block-exempted aid Number of schemes monitored Number of problematic cases Ratio of problematic cases 121 (of which 26 in 2014) % Authorised aid 166 (of which 42 in 2014) % Other 1 (of which 0 in 2014) % Services of general economic interest Total 8 (of which 7 in 2014) 4 50 % 296 (of which 75 in 2014) 89 (of which 27 in 2014) 30 % (36 % in2014) Source: European Commission. State aid errors State aid errors detected as part of ECA annual compliance audits, Source: European Court of Auditors. 11

12 State aid errors Nature and number of State aid errors, Source: European Court of Auditors. Recovery of aid (CPR) Article146 Obligations of Member States A financial correction by the Commission shall not prejudice the Member State's obligation to pursue recoveries under Article 143(2) of this Regulation and to recover State aid within the meaning of Article 107(1) TFEU and under Article 14 of Council Regulation (EC) No 659/

13 Recovery of aid Relation between State aid control and SF requirements: State aid control system in MS State aid operations financed by structural funds Aid must be granted in compliance with State aid rules Unlawful & incompatible State aid RECOVERY Irregular expenditure RECOVERY Withdrawal from SF programme Recovery of aid SF: recovery of nominal amount + interests on late payment SF + State aid: nominal amount + the interest from the date on which the unlawful aid was at the disposal of the beneficiary until the date of its recovery. InterestrateisabasisratesetbytheECforeach Member State basis points. 13

14 Recovery of State aid Limitation periods The powers of the Commission to recover aid shall be subject to a limitation period of ten years. The limitation period shall begin on the day on which the unlawful aid is awarded to the beneficiary either as individual aid or as aid under an aid scheme. Thank you for your attention 14