On Friday 9 June, the European Commission adopted a revised Communication to stakeholders on the application of European State aid rules following the United Kingdom’s withdrawal from the EU (2023/C 202/04).
Article 10(1) of the Protocol on Ireland/Northern Ireland provides that EU State aid rules apply where an aid measure provided to undertakings would be liable to affect trade in goods and electricity between Northern Ireland and the EU.
In addition, the new Windsor Framework contains a joint statement by the EU and the UK providing further details on the circumstances in which this effect could occur.
In line with this joint statement, the Commission underlines that, for an aid measure to be considered as having a real and direct link with Northern Ireland and therefore to be considered as having an effect on the relevant trade between Northern Ireland and the EU, the measure must have a material, actual and foreseeable effect on that trade.
The Commission points out that measures implemented in favour of a beneficiary located in Northern Ireland are more likely to have a real and direct link with Northern Ireland and, therefore, to be subject to EU State aid rules.
For measures granted to a beneficiary located in parts of the United Kingdom other than Northern Ireland, the direct link with Northern Ireland will need to be assessed. The Communication specifies that the European Commission will take into account, for the purposes of this assessment, various indicators based in particular on the size of the company, the volume of the subsidy and the company’s presence on the relevant market in Northern Ireland.
The European Commission will also have to establish that an economic advantage of the measure would be transferred in whole or in part to a business in Northern Ireland or through goods placed on the market in Northern Ireland. With respect to measures benefiting service providers, the Commission will in particular have to demonstrate that an advantage is passed on to businesses involved in the relevant trade in goods between Northern Ireland and the EU.
Link to the Commission Communication: https://aeur.eu/f/7ei (Original version in French by Émilie Vanderhulst)