STATE AIDS: NEW RULES

STATE AIDS: NEW RULES

In January 2015, Government Ordinance no. 117/2006 on national procedures applicable to State aids was repealed by Emergency Ordinance no. 77/2014. This latter legislative act aims at implementing a European reform in the State aid system,
with the objective of granting member States the possibility to settle State aid related issues at the national level, while the Commission only performs an ex-post control of the conditions imposed by the EU in this domain.

Last week, Law no. 20/2015, approving Emergency Ordinance no. 77/2014, was passed (published in the Official Journal no. 160 of March 6, 2015). It brings forth several amendments to the abovementioned Ordinance, briefly presented to you hereinafter.

PRELIMINARY PROCEDURES

Any measure susceptible of representing a State aid or a minimis aid must be accompanied by a memorandum approved by the Government, certifying that such measure is part of the economic and financial policies of the Romanian State. Nevertheless, EU-funded measures, as well as those measures funded by the local public authorities can be passed without obtaining the abovementioned memorandum.

Ordinance no. 77/2014 provides that measures initiated by local authorities must be accompanies by the proof that the County Governor and the County Council were notified with respect to the intention to pass a measure susceptible of being considered a State aid. Further to the adoption of Law no. 20/2015, after receiving this notice, the County Governor has several obligations. Thus, when performing the review of the legality of the documents issued by the local authorities for the adoption of such measures, the County Governor has to check the existence of the approval of the Competition Council. For minimis aids (aids limited to amounts that do not influence competition / trading with the member States), the County Governor must also check compliance with State aid regulations.
If local authorities pass measures providing an economic advantage to a company without the approval of the Competition Council, the County Governor must request the Council’s opinion on the applicability of State aid national and European legal rules.

MEASURES REGARDING ILLEGAL AIDS

Following the entry into force of Law no. 20/2015, Ordinance no. 77/2014 was supplemented by the provisions regulating measures to be passed by Romanian authorities if the Commission has initiated an investigation regarding the illegal granting of a State aid.

Thus, if the Commission initiates an investigation regarding an illegal State aid, the State aid provider must request the establishment of precautionary measures over the assets of the State aid beneficiary, in accordance with the provisions of the Code of Fiscal Procedure. Such measures must be established over assets with the same value as the State aid analysed by the Commission. On the other hand, if the State aid provider was forced by a Court decision or by an arbitration decision to grant the State aid, all enforcement procedures of such decision are automatically suspended right after the date of communication of the decision regarding the initiation of the investigation. Consequently, State aid providers will have to inform the beneficiary, the bailiff and third parties subject to seizure/garnishment of the European Commission’s decision to start an investigation.Decisions of the European Commission ordering the recovery of an illegally granted or abusively used State aid are enforceable titles for the recovery of such funds by the aid provider.