New State Aid procedural rules25/08/04 / cata_european-union-news

The purpose of this Regulation is to facilitate the preparation of State aid notifications by member States and their assessment by the Commission when monitoring state aid granted.

Therefore, the Regulation introduces a form for the notification of envisaged state aid measures by the Member States to the Commission in all sectors, except for state aid in the coal sector where Commission Decision no. 2002/871 continues to apply. The Regulation also provides specific additional forms for supplementary information relevant to each specific type of aid covering 14 categories, including training aid, employment aid, regional aid, research and development aid, aid for rescuing firms in difficulty, aid for restructuring firms in difficulty, environmental protection aid, risk capital aid, and aid in the transport sector.

A form is also provided for the publication in the Official Journal of the European Union of summary information on state aid measures.

As regards the definition of a new aid within the meaning of Article 1(c) of regulation no. 659/1999, the Regulation provides for that alterations to existing aid scheme that consist of an increase in the original budget by up to 20% shall not be considered an alteration to existing aid and, therefore, not a new aid. For certain alteration of existing state aid (increase in the budget exceeding 20%, prolongation of an existing aid scheme of up to six years, tightening of criteria for the application of an authorised aid scheme, a reduction of aid intensity or a reduction of eligible expense), the Regulation stipulates a simplified notification form and procedure and the Commission uses its best endeavours to take a decision within one month. The simplified procedure, however, may not be used where the Member State failed to submit annual reports in line with the Regulation. The Regulation also provides for a form for such annual reports.

Furthermore, the Regulation introduces rules for the determination of the interest rate to be applied for recovery of unlawful aid. The interest rate is set forth for each calendar year by the Commission for each Member State or several Member States. It is calculated by reference to the average of the five-year inter-bank swap rates form September, October and November of the previous year plus 75 basis points. Should the thus calculated interest substantially deviate from the previous interest rate, the Commission may provide certain adjustments.

In the context of the recovery of state aid paid illegally, the interest rate applicable is that in force at the date at which the aid was first put at the disposal of the beneficiary. The already accrued interest is compounded on a yearly basis until the date of recovery. The same interest rate is applied throughout the whole period until the date of recovery, however, if such period is longer than five years, the interest may be recalculated at a five-year intervals.

The Regulation provides that time limits provided for in regulation no. 659/1999 is calclulated in accordance with regulation no. 1182/71. It provides for relevant events for different deadlines.

Separately, the Regulation gradually introduces the use of electronic communications between the Member States and the Commission while 1 January 2006. all notifications and related communications shall be made electronically.

This Regulation entered into force on 20 May 2004.