WASHINGTON: The Commission has asked for feedback on the extension of general block exemption regulation (GBER) to cover ports and airports, as part of the state aid modernisation (SAM) initiative, the Commission said.
SAM is designed to make it easier to grant aid that “contributes to a more dynamic and competitive single market”, and the existing GBER allows EU countries to grant some aid without applying for authorisation. This “cuts red tape for projects that are unlikely to distort competition and allows for well-defined projects to go ahead as fast as possible. It also allows the Commission to focus its efforts on more distortive types of aid”, the Commission said.
The new proposal on ports and airports follows 33 state aid decisions on ports and 54 on airports, the Commission said. The provisions ensure that aid can only be granted for transport-related investments and does not go beyond what is needed to make the investment happen, while taking into account future revenue from the investment, it said.
Commissioner Margrethe Vestager, in charge of competition policy, said: “Ports and airports are key infrastructure for economic growth and regional development. Our proposals aim at facilitating unproblematic public investments in ports and airports that can create jobs, by exempting them from scrutiny under EU state aid rules. I would like to encourage all public authorities, companies and others that would benefit from this simplification of state aid rules to participate in this consultation.”
The proposals also cover some more general changes to the GBER. The Commission wants to make it easier for public authorities to compensate companies for the additional costs they face operating in the EU’s outermost regions, and to increase exemption thresholds on aid for ‘culture’ as this aid has a limited effect on competition, it said.
Caroline Janssens of Pinsent Masons, the law firm behind Out-Law.com said: “When the new GBER was adopted in 2014, the Commission had expressed its intention to review its scope of application to include port and airport infrastructures should a relevant case load justify a review in the near future. The Commission’s statistics show that it is now the case.”
“The applicability of the GBER is increasingly crucial to fit within a wide range of government schemes and for a large number of categories of aid it is now generally the responsibility of the beneficiary company to self-assess and demonstrate to the awarding body that the GBER criteria are met. This has significantly reduced administrative burden and costs and has accelerated the implementation of numerous projects. Extending to port and airport infrastructures categories of aid that no longer necessitate the approval from the Commission before they can be implemented would be welcomed by the two sectors,” she said.
Feedback can be made until 30 May. The Commission will then prepare an updated draft, which will be subject to a second public consultation currently planned for autumn this year, before deciding on the final regulation, it said. In January the Commission asked Netherlands, Belgium and France to align the taxation of their ports with EU state aid rules.
The Netherlands must remove a historic corporate tax exemption given to six seaports, the Commission said, and Belgium and France have been asked to change their legislation to make sure that private and public ports pay corporate tax in the same way as other companies.
Vestager said at the time that “ports are key infrastructure for economic growth and regional development. I will soon present a proposal to facilitate unproblematic investments in ports that can create jobs, to exempt them from scrutiny under EU state aid rules. At the same time, the Commission’s decisions today regarding the Netherlands, Belgium and France make clear that if port operators generate profits from economic activities these should be taxed under the normal national tax laws to avoid distortions of competition.”
