Carina Barbosa Gouvêa, Pedro Hermílio Villas Bôas Castelo Branco

European State Aid Law Quarterly, Volume 19 (2020), Issue 1, Page 39 - 43

In its judgment in Case T-791/16 Real Madrid Club de Fútbol v European Commission, the Court of Justice annulled the Commission Decision on aid measure SA.33754. The judgment allowed the rekindling, from the perspective of political science, of the discussions surrounding what represents the semantic definition of State aid, granted by the States or coming from State resources. The innovation brought by the European Commission was to establish a new subcategory for the term - presumed State aid. We discuss whether this type of aid can be fitted into the control by and decisional standards of the European Commission from a purely objective standpoint. The judgment leads us to reflect on the role played by the Commission regarding the evolution of the concept of State aid. However, this evolution, as an update of the directions of Article 107(1) TFEU, must take into consideration a methodology that necessarily goes through a path aimed at the market analysis based on the economic and social context of the State in question. The answer must be in accordance with the objectives and purposes of Community law and this does not represent a literal exegesis of the legal text. Keywords: Presumed State aid; Circumstantial interpretation; Objective and subjective concept of aid.

Ana Stanič

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 165 - 171

On 19 February 2020, the UK Supreme Court unanimously held that by virtue of Article 351 TFEU UK’s obligations under the ICSID Convention trump its duty of sincere co-operation under Article 4(3) TFEU to give effect to a State aid decision of the European Commission. In doing so, the UK Supreme Court also made clear that ICSID arbitral awards rendered by arbitral tribunals established pursuant to intra-EU BITs and ECT will be enforced in the UK. Whether in post-Brexit UK enforcement of intra-EU BITs and ECT arbitral awards will be refused on the grounds of being contrary to EU State aid law if sought pursuant to the terms of the New York Convention remains unclear given that State aid currently forms part of the on-going negotiations between the UK and EU regarding their future relations. Keywords: Micula, State aid, ISDS, Achmea, duty of sincere cooperation, public policy

Niels Tack

European State Aid Law Quarterly, Volume 19 (2020), Issue 1, Page 101 - 104

Rita Szudoczky, Balázs Károlyi

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 251 - 270

Turnover-based progressive taxes are increasingly popular among the Member States. However, these taxes raise concerns regarding their compatibility with the EU State aid rules. Although there are multiple State aid concerns that deserve attention depending on the actual design of such taxes, the core issue is whether the ability to pay principle can serve as a legitimate objective underpinning turnover taxes and thus justify the different treatment of high-turnover and low-turnover undertakings. This question requires the careful assessment of de facto selectivity because in the case of progressive turnover taxes potential selectivity could only arise from the general construct of the tax in the absence of a derogation from a reference system. This article proposes an alternative test for the de facto selectivity boiling down in essence to the examination of the consistency of the tax. Furthermore, it analyses digital turnover taxes for their consistency with their declared objectives. Finally, the article explores how the Court’s unnecessarily strict approach to the admissibility of State aid questions in preliminary ruling procedures when the main proceeding concerns an individual tax notice could be eased.

Phedon Nicolaides

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 226 - 238

In order to determine whether a tax measure is selective, it is necessary to determine first the reference tax system. The General Court has recently ruled that the reference system is that which is defined by Member States and includes such components as the tax base, the tax rates, and the various bands of taxable income, profit, or revenue. The Commission may not identify a hypothetical or artificial reference system. The General Court has also ruled that differentiation of tax payers is not necessarily selective as long as it follows from the objective of the system and that the progressivity of tax rates is a form of differentiation that is not necessarily selective. In this connection, progressive tax rates on profit can be justified according to the ability to pay. This article argues, however, that progressive taxes on turnover are unlikely to correspond to ability to pay. It also warns that Member States may be tempted to target company size under the pretext of levying progressive taxation. Keywords: State aid; Turnover; Taxation; Progressive rates; Selectivity

Katrine Lillerud

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 239 - 248

National registers on individual aid grants above €500 000 became mandatory from 1 July 2016. The European Commission hopes the registers will promote compliance, raise awareness on aid granted and function as a disciplinary measure. They count on the registers to ensure better control at the national level, by incentivising beneficiaries to comply and by providing enough information for competitors to check whether aid was lawfully granted. This article provides a case study of how the national registers function in Norway, Iceland and Liechtenstein. The three European Economic Area States are an interesting case study as they are the only countries that have opted for their own national transparency registers, whilst the EU Member States all use the Commission’s portal. The findings show that the transparency registers currently do not provide the information required for competitors to assess the compatibility of an aid measure with the internal market. Almost all the published aid measures lack a link to the national legal basis or the granting authorities’ decision on the individual aid measure. These shortcomings are easily corrected. However, if left unattended, they arguably render block exempted aid unlawful. Currently, the effect of the national registers appears to be that they induce competitors to apply for aid rather than litigate on it. Keywords: Ex post evaluation; Block exemptions; National transparency registers; Individual aid; Privatization of State aid enforcement; Transparency communication

Edwin Schotanus

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 359 - 365

Under the Case law of the Court of Justice (CJ), aid measures are very quickly considered to affect competition and trade between Member States (inter-State trade). Nonetheless, in certain clear, specific situations, this will not seem to be the case. The European Commission is constantly seeking ways to dispose of such issues fast, in order to focus on more harmful types of State aid. This pragmatic approach by the Commission is at odds with the CJ’s principled application of the criteria ‘effect on competition’ and ‘effect on inter‑State trade’, and may sometimes result in inconsistent Decisions. Legal certainty would be furthered by a CJ ruling about the Commission’s pragmatic approach. Keywords: effect on inter-State trade; effect on competition; appreciability; State aid.

Federica Maldari

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 398 - 403

The Case deals with the decision of Portuguese authorities to put Banco Espirito Santo SA (BES) into resolution and to immediately create a ‘Bridge Bank’. The Portuguese authorities notified to the EC the proposal to grant €4.899 million of State aid to the ‘Bridge Bank’ by way of initial share capital. The EC concluded that the State aid at issue was compatible with the internal market. BPC Lux 2 Sàrl and the other subordinated creditors of BES initiated proceedings before national courts and ultimately to the Court of the Justice of the European Union. On 7 November 2018, the Court of Justice rejected the General Court’s Order to dismiss the action as inadmissible due to lack of interest. Consequently, the Court of Justice confirmed the principle that an interest in bringing annulment proceedings may arise where the annulment might benefit the applicant in pending proceedings before national courts. Keywords: State aid; Financial crisis; Subordinated creditors; Damages; Annulment proceedings; National legal basis.

Begoña Pérez Bernabeu

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 377 - 381

Without ruling on the merits of the Case, the General Court annulled the Commission’s Decision qualifying as State aid a tax regimen granted by Spain to the major Spanish professional football clubs Real Madrid, F.C. Barcelona, Athletic Club de Bilbao and Club Atlético Osasuna. Following the action for annulment from F.C. Barcelona, the General Court took the view that the Commission had not sufficiently proven that the tax regime had the effect of conferring an actual economic advantage on these four clubs. Keywords: State aid; Burden of proof; Standard of proof; tax advantage; tax rate.

Caroline Buts, Phedon Nicolaides, Hans Pirlet

European State Aid Law Quarterly, Volume 18 (2019), Issue 4, Page 489 - 509

Despite the improvement of the State aid rules on Research, Development and Innovation (RDI) during the past decade, stakeholders have claimed that the current rules are at points ambiguous, which results in a negative impact on innovation. By means of an exploratory case study and participatory action research, this article aims to identify the ambiguities in the RDI rules. While the rules are detailed and overall well explained, we detect three themes where ambiguities arise, ie non-economic activities, price calculation of goods or services provided by research organisations, and ancillary activities of research organisations together with the 20% threshold. For each of these categories, we discuss what constitutes a ‘safe’ interpretation of the concepts involved. This entails an interpretation that is in line with the case law as well as with the spirit of State aid control. Where appropriate and possible, we provide examples as well as suggestions for their practical implementation. Next to providing guidance regarding the detected ambiguities, this article aspires a contribution to the forthcoming revision of the State aid rules for RDI. Keywords: State aid policy; Research, Development and Innovation; GBER; RDI Framework.