State aid Temporary Framework: EU Commission approves extending and expanding the rules

On 28 January 2021, the European Commission announced its decision to extend the validity of State aid Temporary Framework rules, as well as the previous scope to assist the European bloc in its fight against the ongoing economic strains caused by the coronavirus outbreak.

The Temporary Framework rules will now apply until 31 December 2021 and include the following:

  • Almost doubling the ceilings for limited amounts of aid granted. The new ceilings are as follows:
    • EUR 225,000 per company active in the primary production of agricultural products (previously EUR 100,000)
    • EUR 270,000 per company active in the fishery and aquaculture sector (previously EUR 120,000), and
    • EUR 1.8 million per company active in all other sectors (previously EUR 800,000).

As previously, these can be combined with de minimis aid of up to EUR 200,000 per company (up to EUR 30,000 per company operating in the fishery and aquaculture sector and up to EUR 25,000 per company operating in the agriculture sector) over a period of three financial years, subject to complying with the requirements of the relevant de minimis.

  • For companies hard-hit by the coronavirus outbreak, with turnover losses of at least 30% during the eligible period compared to the same period of 2019, the State can contribute to the part of the fixed costs of companies that are not covered by their revenues, in an amount up to EUR 10 million per company (previously EUR 3 million).

  • Member States are allowed to convert repayable instruments (e.g., guarantees, loans, repayable advances) into direct grants until 31 December 2022 provided the conditions of the Temporary Framework rules are met.  In principle, such conversion may not exceed the new ceilings for limited amounts of aid.

  • An extension of the temporary removal of all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication.

On 19 March 2020, the European Commission temporarily relaxed the EU state aid rules due to the economic impact of the coronavirus outbreak and introduced the Temporary Framework rules.

The Temporary Framework rules have been amended and extended four times since being first introduced.

If you have any questions concerning the recently approved scheme(s) or any other State aid related questions, please contact a member of our competition team.

by Charles Clarke, Expert Counsel, Latvia

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