Brussels, 05/09/2014 (Agence Europe) - After a three-year in-depth investigation, the European Commission concluded on Friday 5 September that a Bulgarian law in force from 2007 to 2009, that is, at the time of the country's accesion to the EU, was incompatible with EU state aid rules. Bulgaria has been ordered to rectify matters.
The law allowed private owners of forest land to swap their estates for publicly-owned forests. The value of the forest land - both private and public - was determined for the purpose of the swap by an administrative method prescribed by Bulgarian law. The scheme had not been notified to the Commission for prior authorisation as required by EU rules.
The Commission found that the administrative prices used in the context of the swap transactions were not regularly updated and did not sufficiently take into account market considerations. Consequently, in the majority of cases they were relatively far from market prices for similar forest estates. As a result, private parties participating in these swap transactions gained a competitive advantage. The Commission did not find any indications that the aid had been limited to the minimum necessary to achieve a certain policy objective.
Bulgaria must now either recover the incompatible state aid granted to undertakings that participated in the forest land swaps, or undo the swaps concerned. In this respect the Commission notes that, even though the total number of swap transactions during the period under scrutiny was substantial - 132 transactions in total - the number of individual cases where aid recovery is necessary is expected to be much smaller. Indeed, physical persons not having an economic activity related to the forest estates they swapped are not subject to EU state aid rules since they are not considered undertakings under EU law. Consequently, they will not be required to pay back any advantage received. Moreover, if the advantage received by an undertaking did not exceed the equivalent of €200,000 over a three-year period (and provided the other requirements of the de minimis regulation are respected), this is not considered as state aid under EU law and does not have to be recovered either.
The Commission points out that it is not calling into question the use of administrative prices by member state authorities as such, but only the lack of regular updates and the coefficients used for the administrative price-setting in the specific case of the swaps of forest estates in Bulgaria. (EL)