2.10 State Aid
The Interreg NPA Programme is bound to comply with the State Aid rules, which apply in the European Union (EU) and the European Economic Area (EEA). The EU/EEA rules generally prohibit State Aid, but they allow for State Aid to be compatible with the EU Treaty in closely-defined circumstances, where it can contribute to certain policy objectives.
According to Article 107 of the Treaty of the functioning of the European Union, State Aid is defined as “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings of the production of certain goods”.
As a general principle, all project activities will be assessed at partner level to determine if they are State Aid relevant or not. Private, public, non-profit organisations, universities, etc. may all be State Aid relevant, depending on the activities to be supported rather than the legal status of the organisation.
Questions to ask in order to conclude if a State Aid case exists:
Is the project partner an undertaking? (i.e. an entity engaged in economic activity, offering goods or services on a given market.)
Are the project activities identified as being economic?
Is there a selective advantage involved in supporting the project activities identified as being economic?
the answer to all questions above is YES, the support from the NPA programme is likely to constitute State Aid. Submitted applications undergo a State Aid assessment, and the result of this may lead to one or more of the following scenarios:
No state aid case: no further action.
Direct State Aid: the support is regarded as State Aid granted under any of the exemption regulations, if applicable.
Indirect State Aid to end beneficiaries: State Aid cases might occur where support is provided by the project to end beneficiaries, such as training, business support, etc. Project partners have the responsibility to ensure that State Aid rules are complied with.
Where support to a project is identified as State Aid, the programme has two tools through which it can grant State Aid in compliance with the State Aid rules and regulations; the General Block Exemption Regulation (EU) 2021/1237, Articles 20 and 20a, and the De Minimis regulation.
Partners are asked to fill in a self-assessment section in the application form. During the application assessment, this information will help the JS determine whether activities are subject to state aid or not and to clarify which State Aid tool to apply. If needed, the project partner will be asked to provide a De Minimis declaration or any other relevant documentation. The programme informs about the state aid relevance of each partner in the state aid section in Jems.
In case neither De Minimis nor the GBER can be applied, the applicant has to remove the State Aid relevant activities from the application.
2.10.1 Direct aid granted under GBER
Primarily, the Programme will consider State Aid within the scope of Article 20 of the General Block Exemption Regulation (GBER). The GBER Regulation does not apply to aid to export-related activities, aid contingent upon the use of domestic over imported goods and aid to undertakings in difficulty.
Funding granted on the basis of this Article follows the same eligibility rules as the Programme, and can have an aid intensity of up to 80% for partners. By aid intensity is meant, the funding from the Interreg NPA programme plus any other public sources. The partner’s own contribution and any external private contribution should not be included in the calculation of aid intensity.
Where activities are State Aid relevant, and partners foresee that they would receive external match funding for project activities, this needs to be discussed with the Joint Secretariat before the application is submitted.
Documentation obligations for GBER, Article 20:
The Managing Authority will notify the project partner in writing of the maximum aid granted and deal with reporting obligations established in the GBER.
Project partners are instructed to maintain records with information and supporting documentation in regard to state aid for 10 years from the date on which the aid was granted.
Recoverable VAT is not eligible for partners funded under GBER.
2.10.2. Direct aid granted under De Minimis
In those cases where the GBER cannot be applied, the De Minimis regulation (EU) No 1407/2013 will be used. Partners can receive funds from the programme only if they did not receive public aid under the de minimis rule totalling more than EUR 200.000 within the previous three fiscal years from the date of granting the aid. This maximum amount is per undertaking, per Member State. De Minimis aid cannot be granted to undertakings active in the fishery and aquaculture sectors, primary production of agricultural products, nor to export-related activities.
Documentation obligations for De Minimis:
Before granting the aid the Managing Authority shall obtain a self-declaration from the undertaking about any other de minimis aid received during the previous two fiscal years and the current fiscal year
The Managing Authority will notify the project partner in writing of the prospective amount of aid
Project partners are instructed to maintain records with information and supporting documentation regarding individual de minimis aid for 10 fiscal years from the date on which the aid was granted.
2.10.3. Indirect aid granted to end beneficiaries
If end users receive advantages through the project’s activities (for example, through the provision of services or training to SMEs, access to facilities or other non-financial support), they could possibly be recipients of State Aid. When preparing the project application, each applicant must consider whether its activities will constitute State Aid to end users.
It may be possible to frame such support under GBER Article 20a, an exemption for aid of limited amounts in the context of Interreg. To use this article, the amount of aid granted indirectly by a project partner to an undertaking cannot exceed 22.000 Euro per undertaking and per project.
Documentation obligations for indirect aid:
Where a partner provides State aid to end users, the project partner providing the advantage will need to calculate and document the value of the supportive activities. A template is provided by the programme in the Download centre.
The partner is responsible for ensuring that the terms of the GBER Regulation are met. The requirement to maintain records with information and supporting documentation regarding state aid for 10 years from the date on which the aid was granted does not apply for GBER Article 20a. However, the programme rules on document retention apply.
Recoverable VAT is not eligible for partners funded under GBER 20a.