EU

December 2017

News Update EU State Aid Special
15 December 2017

Public investor not exempted from prior private investor test

On 23 November 2017, the Court of Justice of the EU (the "CJEU") confirmed the judgment of the General Court (the "GC") in the SACE case. SACE is owned by the Italian State and provides export credits. In 2013, the European Commission considered that a capital injection by SACE into Sace BT, a subsidiary, was not in conformity with the market economy investor principle. In 2015, the GC confirmed the Commission's assessment and only partly annulled the decision due to a miscalculation of the amount of aid. The CJEU confirmed its settled case law (C-124/10 P, Commissie/EDF), according to which a public authority can only successfully argue that its investment does not result in State aid if it can demonstrate that its investment decision is based on a prior economic assessment of the profitability of the investment. Such evidence cannot be produced retroactively.

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General Court secures procedural rights of parties in State aid investigation

On 17 November 2017, the GC partly annulled the Commission's decision on the illegal State aid given to Gdynia military airport due to a violation of the procedural rights of the interested parties in the State aid investigation. In its final decision, the Commission had based its State aid assessment on a different legal framework than that set out in its decision on the opening of the investigation procedure. The GC held that the Commission should have provided the parties, including the beneficiary, the opportunity to comment on its revised legal approach, since this change resulted in a different legal assessment. The GC referred the case back to the Commission which must re-open the formal investigation. 

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AG concludes the De Minimis Regulation is partially invalid

In his opinion of 29 November 2017, Advocate General Wathelet concluded in the ZPT case that Article 1(1)(d) of the former de minimis Regulation nr. 1998/2006 is invalid. According to the Advocate General, the exemption of aid under € 200,000 for export-related activities constitutes an unjustifiable discrimination between economic activities depending on whether or not they are aimed at exports. If the CJEU follows the opinion of Advocate General Wathelet, the consequence may be that de minimis aid to export-related activities will be allowed in the future, since the new de minimis regulation that replaced the regulation under scrutiny in this case contains exactly the same exemption of aid for export-related activities.

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Increased Fiscal Revenue and the Notification Obligation

In his opinion of 30 November 2017, Advocate General Wahl held that an increase in revenue from taxes which fund an aid scheme for the film and audio-visual sectors does not fall within the scope of the State aid rules if the increase in tax revenue has no direct impact on the actual amount of aid paid out. Several taxpayers, including Carrefour Hypermarchés and Fnac, sought the repayment of the taxes before the French courts. They argued that the taxes were illegal because of the increase of tax revenue by more than 20% due to the reform of the tax base. According to Advocate General Wahl, the notification obligation for increases in the budget of an authorised aid scheme exceeding 20% only applies if the actual amount of aid paid from the tax revenues has increased. This is for the French courts to verify.

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Advertising revenue may entail state resources

On 9 November 2017, the CJEU partially set aside the judgment of the GC in the TV2/Danmark case. In contrast to the GC, the CJEU is of the opinion that advertising revenues qualify as state resources and constitute an advantage to TV2/Danmark. The CJEU confirmed its established case law according to which advantages granted directly or indirectly through state resources are considered as State aid. This definition also covers advantages that are granted by a public or private body designated or established by the State. In this case the CJEU concluded that the private advertising revenues collected by TV2 Reklame and transferred to TV2/Danmark via the Fonds TV2, were under the control of the Danish state since the state was able to exercise a decisive influence on the transfer of resources.

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Greetje van Heezik

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