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The Squaring of the Circle: journal article

Subsidy Control Under the UK-EU Trade and Cooperation Agreement

Totis Kotsonis

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 15 - 29

The article provides an overview of the subsidy control commitments under the TCA and considers their implications for UK subsidy control regulation. Issues considered in this context include the extent to which TCA subsidy control differs from EU State aid rules and what additional flexibilities this might offer. Consideration is also given to the remedies available to interested parties with concerns about the grant of a subsidy, the inter-Party dispute resolution mechanisms, the availability of unilateral trade defence measures, as well as the question of the different levels of harm to trade or investment for which different TCA provisions provide. The article also highlights certain areas which require further attention, including the fact that the current UK subsidy control regime is not concerned with the potentially competition distortive effects of a subsidy on the UK internal market. Separately, the article considers the question of whether the absence of a prior notification requirement has an impact on the effectiveness of the UK subsidy control system. Keywords: subsidy control; UK; TCA; level playing field; trade; Brexit


Big on Big, Small on Small: A Never Ending Promise? journal article

A Critical Assessment of the Commission Decision Practice with Regard to the Effect on Trade Criterion

Sebastiaan Cnossen, Georges Dictus

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 30 - 40

More than five years ago, the European Commission provided further guidance on local support measures by establishing three criteria in order to exclude an effect on trade. As authors explain in this article, this approach fits well within the existing case law of the CJEU and has also been recently endorsed by the General Court. At the same time, authors critically assess the decision practice of the Commission which often lacks a solid assessment of the three criteria. This detracts from the Commission's self-proclaimed goal to be 'big on big, small on small' and further reduce the administrative burden for public authorities and companies. This articles therefore calls upon the Commission to provide more legal certainty on the effect on trade criterion by taking the assessment of this criterion more seriously and create more precedents that stakeholders can rely on. Keywords: effect on trade; local aid; cross-border; marginal effect; notion of aid


Shedding Light into the ‘Black Box’ of State Aid: journal article

The Impact of Hinkley Point C on the Assessment of the Compatibility of State Aid

Phedon Nicolaides

European State Aid Law Quarterly, Volume 20 (2021), Issue 1, Page 4 - 14

The article argues that the judgment of the Court of Justice in case C-594/18 P Austria v Commission, which appeared to limit the criteria that the Commission uses to determine the compatibility of State aid, may have a positive impact on State aid control if it makes the assessment of the Commission more transparent. There is a need for greater transparency in the ‘weighing’ of the positive and negative effects of State aid and the ‘balancing’ of those effects. The weighing and balancing of the effects of State aid are not easy tasks. But it will be necessary for the Commission to be more explicit about the model it relies on to conclude that aid is compatible or not. Keywords: Article 107(3)(c) TFEU; compatibility with internal market; common interest; affectation of trade; distortion of competition; Hinkley Point C


Modern Approaches to State Aid: Ukraine journal article

Kseniia Smyrnova, Erika Szyszczak

European State Aid Law Quarterly, Volume 19 (2020), Issue 1, Page 8 - 18

In recent years competition clauses (including the unique EU State aid rules) have been introduced into EU trade Treaties and in particular, the EU is developing a neighbourhood policy where trade should be open but on the same, or very similar regulatory terms as EU internal policies. One of the most advanced forms of competition clauses being used in a trade Treaty is the EU-Ukraine Association Agreement 2014 together with the Deep and Comprehensive Free Trade Agreement 2016. In particular Ukraine must establish a similar form of State aid control to the model used internally in the EU, linking the concepts of competition and market access. Within a relatively short period of time Ukraine has created a State aid unit within its Antimonopoly Committee (AMC) and this unit is responsible for scrutinizing and investigating a very large number of State aid notifications with a very small and inexperienced staff. This Article examines how the regulation of State aid has been transformed in Ukraine, contributing to an internal modernization of industrial policy, allowing for greater transparency and scrutiny of the use of public finances in Ukraine. In so doing, the Article identifies the challenges already faced by the AMC and the potential for improving the system of State aid control in Ukraine. Keywords: Ukraine; Industrial policy; Association Agreement; EU trade policy.


Support for Services in the Lithuanian Electricity Sector · Case C-706/17 Achema · Annotation by Lina Barauskaitė journal article

Annotation on the preliminary ruling of the Court of Justice (Fourth Chamber) of 15 May 2019 in Case C-706/17 AB Achema, AB Orlen Lietuva and AB Lifosa v Valstybinė kainų ir energetikos kontrolės komisija, Lietuvos Respublikos energetikos ministerija, UAB Baltpool

Lina Barauskaitė

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 352 - 358

On 15 May 2019, the Court of Justice of the European Union (the CJEU or the Court) rendered a landmark state aid preliminary ruling where it assessed the Lithuanian public interest services (PIS) support measure provided to certain Lithuanian electricity producers. The measure was never notified to the European Commission and was subject to number of court disputes at the national level. The ruling confirms that the PIS support in the electricity sector constitutes State aid. In particular, the Court confirms that PIS funds can be regarded as State resources, since their life cycle (collection, administration and distribution) are strictly regulated and remains under the control of the Lithuanian State. PIS funds are also intended to finance certain services in the electricity sector, constituting a selective advantage. Moreover, due to characteristics of the Lithuanian electricity market, such as existing interconnectors and European Union electricity market liberalisation, PIS scheme is also liable to affect trade between the Member States and distort competition. Finally, the Court also expressed its doubts whether PIS should be defined as service of general economic interest (SGEI). According to the Court, the requirements for SGEI existence are not met. Keywords: Energy; Electricity; State resources; Imputability; Effect on trade; Distortion of competition; SGEI.


Port of Izola: An Appreciable Twist in State Aid Law? · Case T-728/17 Marinvest-Porting · Annotation by Edwin Schotanus journal article

Annotation on the Judgment of the General Court (Second Chamber) of 14 May 2019 in Case T-728/17 Marinvest d.o.o. and Porting d.o.o. v European Commission

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.


The ‘Effect on Trade’ Criterion in European Union State Aid Law: A Critical Approach journal article

Bernadette Zelger

European State Aid Law Quarterly, Volume 17 (2018), Issue 1, Page 28 - 42

This piece focuses on the second aspect of the fourth criterion for a measure to qualify as aid pursuant to Article 107(1) TFEU, namely whether a respective measure has an effect on trade between Member States or rather qualifies as purely local in nature. It will be demonstrated that the Commission’s existing guidance on the effect on trade criterion in its Notion of Aid Notice and its package of recent Commission decisions provide two main criteria which have to be considered when assessing whether or not a measure is local. Therefore, these packages, along with further guidance of the Commission on the effect on trade criterion in its Notion of Aid Notice, do provide a framework for identifying local measures, however, the framework provided does not pursue a ‘safe harbour’ approach like, for example, the Commission’s General Block Exemption Regulation or the De Minimis Regulation. This article provides a critical analysis of the existing legal framework and the Commission’s guidance in this respect, and concludes by suggesting a novel policy approach. Keywords: Effect on Trade; Competition; Distortion; Notion of Aid.


The Difficulty of Being ‘Local’: journal article

An Essay on an Unknown Friend

Hans Arno Petzold

European State Aid Law Quarterly, Volume 17 (2018), Issue 2, Page 250 - 258

EU State aid law does frequently refer to the term ‘local’: firstly in Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) when asking whether trade between Member States is affected, in the sense of a cross-border effect of the respective measure, secondly in the General Block Exemption Regulation (GBER) as from 1 July 2014, which exempts certain ‘local’ aids, falling under Article 107(1) TFEU, from prior notification. In this essay the attempt is made, by analysing Commission decisions and the GBER, to come to a definition of the term ‘local’ suitable for use in day-to-day funding practice. Keywords: Effects on Trade; Local Character; Article 107(1) TFEU; GBER.


The Concept of “Local Impact” in Cross-Border Regions journal article

Bob Feidt

European State Aid Law Quarterly, Volume 16 (2017), Issue 4, Page 634 - 636

On 29 April 2015, the European Commission published its decisions on several notified measures, arguing that in none of those cases State aid was involved because the measures were unlikely to have a significant effect on trade between Member States. Although the “local impact” concept, which still needs to be validated by the Court of Justice of the EU, is a welcomed initiative, it raises several questions. Some of these questions come up when applying the “local impact” concept to measures undertaken in cross-border regions. This short opinion piece underlines certain shortcomings of the concept attempting to spark a discussion that could help improve the concept. Keywords: Interstate Trade; Local Impact; Cross-Border Regions; Catchment Area.


The ‘Effect on Trade between the Member States’ Criterion: Is It the Right Criterion by Which the Commission’s Workload Can Be Managed? journal article

Cees Dekker

European State Aid Law Quarterly, Volume 16 (2017), Issue 2, Page 154 - 163

On 29 April 2015, the European Commission decided on several notified measures, ruling that in none of those cases State aid was involved because, as the accompanying press release stated, they were unlikely to have a significant effect on trade between Member States. According to the press release, the decisions give additional guidance on how to determine which cases should be assessed by the Commission and which should not, to allow the Commission to focus on cases with a larger impact on the internal market. A couple of decisions in 2016 followed the same line of reasoning. This article discusses the question of how these decisions relate to the Court’s case law and the Commission’s own practice regarding the criterion ‘effect on trade between Member States’ laid down in Article 107(1) TFEU. It will also explore to what extent these decisions give actual clarity on the application of this criterion and if there is a better alternative to reduce the workload of the national authorities and the Commission. Keywords: Interstate Trade; De Minimis; Appreciable Effect; Notice on the Notion of State Aid.