State aid applies to organisations in the marine sector receiving financial assistance from public sources, including grants, beneficial tax treatment or where they purchase publicly-owned assets. It is particularly pertinent in Cornwall, which receives substantial public financial support. Of course, Brexit may mean that EU law (of which state aid is part) will no longer apply in the UK. However, for now, the law still applies and if the UK remains in or has access to the single market, it is highly likely that EU competition law will continue to apply.
The fundamental rule at the heart of state aid is a prohibition on the use of state resources to give a competitive advantage to one undertaking over another. This aims to ensure a level playing field across the EU market without individual member states giving an unfair advantage to businesses or other organisations.
State aid can encompass a wide range of resource transfers, but the key ones are:
- Grants from national sources and European Structural Investment Funds
- Tax incentives, including R&D tax credits
- Transactions on favourable terms – for instance, acquiring publicly-owned land at less than market rates
- Financial support (such as loans) on less than market rates
- Coaching and other forms of business support
State aid law applies to all organisations including public authorities, businesses, not-for-profits and charities. Each organisation must satisfy itself that it is complying with state aid rules – you can’t rely on a funding organisation or public body to tell you that you are compliant even if you are working closely with them.
It is critical that legal advice is obtained in order to ascertain the state aid position wherever there is a possibility that an organisation may be receiving a transfer of state resources. The advice will help organisations ensure there is an exception which applies to them and that the conditions of the exception are satisfied. In the marine sector these include:
- Regional investment and operating aid
- Aid granted in the fishery and aquaculture sector
- De minimis aid: where organisations receive no more than €200,000 of aid over a three-year period
Many organisations in receipt of aid will be required to procure goods and services in accordance with certain rules ranging from a funder’s requirement to obtain two written quotes, to full compliance with EU procurement law (which applies generally to all public authorities). Advice should be sought to ensure that the correct regime is followed and that the organisation has appropriate plans, policies and procedures in place to enable it to comply with the applicable procurement requirements and keep abreast of any changes to those requirements.
We have recently advised a public authority on its state aid position under a grant application for redevelopment of beachside buildings, assisted with a large procurement project for a harbour redevelopment and advised a client procuring a marine vessel.
If you need advice on any of the issues raised in this article please contact us on 01872 265100 or email email@example.com.