15 June 2016

On 19 May 2016 the European Commission published a notice that clarifies the scope of EU State aid rules. This comes approximately four years after the draft version of the consultation was published.

The notice explains when a State measure can contain elements of State aid and thereby aims to provide better guidance to governments and undertakings. When a State measure contains State aid, the measure must be notified to the Commission or granted in accordance with one of the various exemption regimes.

The notice is a codification of case law of the EU Court of Justice and the decisional practice of the Commission. It explains the interpretation of the various aspects of State aid. It elaborates on common subjects, such as the application of the criterion of the private investor and the application of State aid rules to infrastructure projects.

An important recurring theme is the vision of the Commission that, in principle, a transaction (e.g. a sale) does not contain State aid if the contracting party is selected by the public authority on the basis of a public and competitive award procedure that respects public procurement rules.

The Commission also clarifies when a State measure does not have any cross-border effect and thus does not contain State aid. The mere fact that the amount of a subsidy is limited, or that the subsidy is granted to a small, local undertaking, is not decisive. The public authority should always consider, in the light of the concrete circumstances of the case, whether the measure only has a local impact.