Rules and procedures for providing state aid

The European Union has strict rules and procedures for providing state aid. The rules and procedures prohibit public authorities from granting companies selective benefits that are not in line with the market. Such aid must (often) be notified to the European Commission for prior approval. Failure to notify may have far-reaching consequences for companies, not least because of the obligation to repay the aid. State aid may take many forms, such as subsidies, guarantees, options, land transactions, loans and tax arrangements. State aid can only be avoided in advance and cannot be remedied afterwards. Companies themselves are responsible for assessing whether the aid received was granted correctly. Therefore, it is important for companies and public authorities to critically assess state aid grants.

In addition, public authorities must take into account the Public Enterprises (Market Activities) Act, which is part of the Competition Act. This act aimed to prevent public companies from distorting competition. The act contains a number of rules of conduct to which public authorities should adhere when engaging in market activities.

Expertise

HVG Law LLP advises companies and public authorities on the applicability of the state aid rules and the admissibility of state aid, and assists in making state aid notifications to the European Commission. In addition, HVG Law LLP is consulted on the procurement law and state aid law aspects of various public-private cooperation structures. HVG Law LLP also advises on the drafting of state aid-proof contracts.