GBER

Regional Investment Aid

Regulation 651/2014

amended by Regulation 1084/2017

Stephen Moore

What is Regional Aid?

• State aid to promote the economic, social and territorial cohesion of Member States and the Union as a whole.

• Aid for the development of the most disadvantaged areas by supporting investment and job creation in a sustainable context.

• Guidelines on Regional State aid for 2014-2020 (2013/C 209/01)

• Regional Aid is exempt from the notification requirement of

• Article 108(3) of the TFEU provided it fulfils all the conditions laid down in Chapter I and the specific conditions in Chapter III of the GBER.

Where is Regional aid allowed?

46,53 % of the EU-27 population for the period 2014-2020. This ceiling is set using Eurostat population data for 2010. The ceiling will correspond to 47,00 % of the EU-28 population following the accession of Croatia to the Union.

GBER State aid in 2016

Total €31,235.7 million

GBER structure Chapter I. Common provisions. Scope Definitions Conditions for exemption Notification thresholds Transparency of aid Incentive effect Aid intensity and eligible

costs Cumulation Publication and

information

Chapter III. Specific conditions. regional aid; aid to SMEs in the form of investment aid, operating

aid and SMEs' access to finance; aid for environmental protection; aid for research and development and innovation; training aid; recruitment and employment aid for disadvantaged

workers and workers with disabilities; aid to make good the damage caused by certain natural

disasters; social aid for transport for residents of remote regions; aid for broadband infrastructures; aid for culture and heritage conservation; aid for sport and multifunctional recreational

infrastructures; aid for local infrastructures.

Chapter II. Monitoring. Withdrawal of the

benefit of the block exemption

Reporting Monitoring

Chapter IV. Final provisions. Repeal Transitional provisions Application period

Annex I, Annex II, Annex III

Chapter I. Common provisions Article 1 - Scope

Article 2 - Definitions

Article 3 - Conditions for exemption

Article 4 - Notification thresholds

Article 5 - Transparency of aid

Article 6 - Incentive effect

Article 7 - Aid intensity and eligible costs

Article 8 - Cumulation

Article 9 - Publication and information

Article 1 (3) - Excluded sectors GBER applies to all sectors except aid granted to undertakings active in: (a) the fishery and aquaculture sector, as covered by Council Regulation

(EC) No 1379/2013;

(b) the primary production of agricultural products;

(c) the sector of processing and marketing of agricultural products, in the following cases:

i. where the amount of the aid is fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the undertakings concerned;

ii. where the aid is conditional on being partly or entirely passed on to primary producers;

(d)aid to facilitate the closure of uncompetitive coal mines; &

(e) the categories of regional aid excluded in Article 13.

Categories of Regional aid excluded in Article 13

(a) steel, coal, shipbuilding & synthetic fibres; (b) transport sector as well as the related infrastructure and energy generation, distribution and infrastructure, except for regional investment aid in outermost regions and regional operating aid schemes; (c) regional aid in the form of schemes which are targeted at a limited number of specific sectors of economic activity; schemes aimed at tourism activities, broadband infrastructures or processing and marketing of agricultural products are not considered to be targeted at specific sectors of economic activity; (d) regional operating aid granted to undertakings whose principal activities fall under Section K ‘Financial and insurance activities’ of the NACE Rev. 2 or to undertakings that perform intra-group activities whose principal activities fall under classes 70.10 ‘Activities of head offices’ or 70.22 ‘Business and other management consultancy activities’ of NACE Rev. 2. 2017 revision no longer explicitly excludes individual regional investment aid to a beneficiary that has closed down the same or a similar activity in the EEA in the two years preceding its application for regional investment aid or which, at the time of the aid application, has concrete plans to close down such an activity within a period of up to two years after the initial investment for which aid is requested is completed in the area concerned. But text is still in the recitals. See para 36.

Chapter I. Definitions (Art.2) General (1-39) Specific for regional aid

(40-61)

(2) SME

(18) Undertaking in difficulty

(23) Start of works

(24) Large enterprises

(43) steel sector

(44) synthetic fibres sector

(45) transport sector

(47) tourism

(49) initial investment

(61) in-kind contribution

(61a) relocation (new)

Definitions (Article 2)

(41) ‘regional investment aid’ – either aid for an ‘initial investment’ (SMEs) or aid for an ‘initial investment in favour of a new economic activity’ (large);

(49) ‘initial investment’ means: 1)the setting-up of a new establishment;

2)extension of the capacity of an existing establishment;

3)diversification of the output of an establishment into products not previously produced in the establishment;

4)fundamental change in the overall production process of an existing establishment;

1. setting-up of a new establishment

2. extension of the capacity of an existing establishment

3. diversification of the output of an establishment into products not previously produced in the establishment

4. fundamental change in the overall production process of an existing establishment

Definition (61a) - relocation

(61a) ‘relocation’ means a transfer of the same or similar activity or

part thereof from an establishment in one contracting party to the EEA Agreement (initial establishment) to the establishment in which the aided investment takes place in another contracting party to the EEA Agreement (aided establishment). There is a transfer if the product or service in the initial and in the aided establishments serves at least partly the same purposes and meets the demands or needs of the same type of customers and jobs are lost in the same or similar activity in one of the initial establishments of the beneficiary in the EEA;

See Article 14(16) - The beneficiary shall confirm that it has not carried out a relocation to the establishment in which the initial investment for which aid is requested is to take place, in the two years preceding the application for aid and give a commitment that it will not do so up to a period of two years after the initial investment for which aid is requested is completed.

Article 14(4) – eligible costs

(a) investment costs in tangible and intangible assets;

(b) the estimated wage costs arising from job creation as a result of an initial investment, calculated over a period of two years;

or

(c) a combination of points (a) and (b) not exceeding the amount of (a) or (b), whichever is higher.

Eligible costs

Tangible and intangible assets:

Wage costs:

Employee monthly

wage x 24

Article 14 (9)

conditions

Article 14 (8)

conditions

Max aid intensity – MS Regional aid maps

Austria SA.37825 Italy SA.38930

Belgium SA.38577 Latvia SA.38385

Bulgaria SA.38667 Lithuania SA.38510

Croatia SA.38668 Luxembourg SA.38615

Cyprus SA.38814 Malta SA.38468

Czech Republic SA.37553 Poland SA.37485

Denmark SA.38247 Portugal SA.38571

Estonia SA.38621 Romania SA.38364

Finland SA.38359 Slovakia SA.37447

France SA.38182 Slovenia SA.38060

Germany SA.37423 Spain SA.38472

Greece SA.38450 Sweden SA.37985

Hungary SA.37718 The Netherlands SA.39108

Ireland SA.38509 United Kingdom SA.38113

What is meant by ‘own contribution’?

State aid up to maximum allowed in Regional aid map

Aid grant Other State resources

Own contribution = Eligible expenditure minus

State resources

25% of investment should be from own contribution

or external finance that is free of public support

State resources

Eligible expenditure

Challenges

Determining the size of enterprise (is it a SME?)

Eligible expenditures combination - equipment acquisition + job creation in one project

Cumulation with other types of aid (e.g. de minimis)

How to discover if the beneficiary is subject to an outstanding recovery order?

How to establish if the beneficiary is a company in difficulty?

What is export aid?

Is the beneficiary in an excluded sector?

Awareness of new conditions e.g. Article 14(16) ‘relocation’

GBER Regional aid checklist

• Used by DG Comp when monitoring GBER schemes

• Not official documents

• Intended to be a useful complementary tool for the application of the GBER

• Full compliance with the GBER’s provisions only way to benefit from the exemption from notification

• Useful also for Member States?

• Not published on any EC website

Questions?