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National regional investment aid

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This Regulation lays down the conditions for exemption from the notification to the Commission of aid awarded under regional investment aid schemes, which are compatible with the internal market.

ACT

Commission Regulation (EC) No 1628/2006 of 24 October 2006 on the application of Articles 87 and 88 of the Treaty to national regional investment aid.

SUMMARY

This regulation regards transparent regional investment aid schemes *, which constitute State aid within the meaning of Article 87(1) of the EC Treaty and are compatible with the internal marketwithin the meaning of Article 87(3) of the EC Treaty. It lays down the conditions for exemption from the notification of aid awarded under these schemes by the Member States (notification requirement of Article 88(3) of the EC Treaty).

Conditions for exemption

Aid for initial investment is compatible with the common market provided that:

  • it is granted in regions eligible for regional aid, as determined in the regional aid map for the Member State concerned for the period 2007-2013;
  • the aid intensity in present gross grant equivalent does not exceed the regional aid ceiling which is in force, as determined in the regional aid map for the Member State concerned for the period 2007-2013.

The following are compatible with the internal market and are not subject to prior notification to the Commission:

  • transparent regional investment aid schemes *which constitute State aid within the meaning of Article 87(1) of the Treaty and meet the conditions laid down in this Regulation;
  • individual aid that is not awarded on the basis of an aid scheme ('ad hoc' aid) which does not exceed 50 % of the total aid to be granted for the investment.

Scope

This Regulation does not apply to:

  • the fisheries and aquaculture sector;
  • the shipbuilding sector;
  • the coal industry;
  • the steel industry;
  • the synthetic fibres sector;
  • the production of agricultural productslisted in Annex I to the EC Treaty;
  • aid for activities related to export towards third countries or Member States;
  • aid contingent upon the use of domestic over imported goods.

Notification requirement

Aid which is not exempted from notification under this Regulation remains subject to prior notification to the Commission. This includes among others:

  • non transparent aid;
  • operating aid;
  • regional schemes targeting specific sectors of economic activity within manufacturing or services;
  • regional aid awarded for large investment projects on the basis of existing aid schemes (if the total amount of aid from all sources exceeds 75 % of the maximum amount of aid an investment with eligible expenditure of EUR 100 million could receive, applying the standard aid ceiling in force for large undertakings in the regional aid map on the date the aid is to be granted).
Key terms in the Act
  • Transparent regional investment aid schemes: regional investment aid schemes in which it is possible to calculate precisely the gross grant equivalent as a percentage of eligible expenditure ex ante without the need to undertake a risk assessment (for example, schemes which use grants, interest rate subsidies, or capped fiscal measures). Schemes which use public loans are considered as transparent regional investment aid schemes if they are backed by normal security and do not involve abnormal risk, and are therefore not considered to contain a State guarantee element.
  • Initial investment: an investment in tangible and intangible assets relating to the setting-up of a new establishment, the extension of an existing establishment, diversification of the output of an establishment into new additional products, a fundamental change in the overall production process of an existing establishment or the acquisition of the capital assets directly linked to an establishment, where the establishment has closed or would have closed had it not been purchased, and the assets are bought by an independent investor.

REFERENCES

Act Entry into force – Expiry date Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1628/2006 1.1.2007 – 31.12.2013 - OJ L 302, 1.11.2006

RELATED ACTS

Regional state aid guidelines for 2007-2013 [Official Journal C 54, 4.03.2006, p.13].
In order to support the economic development of the most disadvantaged European regions during the period 2007-2013, these guidelinesset out the criteria for examining the compatibility of national regional aid with the internal market pursuant to Article 87 (3)(a) and (c) of the EC Treaty.

Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises [Official Journal L 10, 13.01.2001].
In the context of Regulation (EC) No 994/98, State aid to small and medium-sized enterprises (SMEs) is the subject of this Regulation. It contains provisions regarding the exemption of SMEs granted state aid from the obligation of prior notification to the Commission.

Commission Regulation (EC) No 1976/2006 of 20 December 2006 amending Regulations (EC) No 2204/2002, (EC) No 70/2001 and (EC) No 68/2001 as regards the extension of the periods of application [Official Journal L 368, 23.12.2006].

Council Regulation (EC) No 994/98 of 7 May 1998 on the application of Articles 87 (former Article 92) and 88 (former Article 93) of the Treaty establishing the European Community to certain categories of horizontal State aid [Official Journal L 142, 14.5.1998].
This Regulation on the application of Articles 87 and 88 empowers the Commission to declare certain categories of horizontal State aid compatible with the internal market. These categories of State aid, such as aid granted to small and medium-sized enterprises, are not subject to the notification requirement of Article 88(3) of the EC Treaty.

This summary is for information only. It is not designed to interpret or replace the reference document, which remains the only binding legal text.

Last updated: 28.08.2007
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