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Definition of Existing Aid under EU State Aid Law

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Title: Definition of Existing Aid under EU State Aid Law
Author(s): Sundberg, Veera
Contributor: University of Helsinki, Faculty of Law
Discipline: European law
Language: English
Acceptance year: 2018
The aim of this study is to define the concept of existing aid. Existing aid relates to state aid control in the European Union. Existing aid is a form of state aid to which the obligation to recover illegal state aid does not apply. The definition of existing aid is, therefore, important. In determining whether an aid can be an existing aid, it must be put into effect prior to the entry into force of the Treaty on the Functioning of the European Union, or another event listed in Article 1(b) of the Procedural Regulation of 2015. This study seeks to find when is an aid considered “put into effect” within the meaning of the said provision. Aid should be considered put into effect when the aid beneficiary is legally entitled, under national law, to receive the aid, instead of the traditional view of only looking at the time the legislation providing for the aid entered into force. Pursuant to Article 1(b)(v) of the Procedural Regulation of 2015, aid, which was not considered aid when it was put into effect but later became aid due to the evolution of the internal market, is existing aid. The scope of application of the said provision is examined in this study. The interpretation proposed by this study is that the provision primarily applies, when evolution of the internal market takes place by a liberalisation of national law, which renders an aid recipient an undertaking within the meaning of European Union competition law. The traditional view of applying the provision when trade between member states within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union emerges, should not be considered the typical situation of applying the provision. This is because that is not likely to ever happen. Pursuant to Article 1(c) of the Procedural Regulation of 2015, existing aid can lose its status as existing, if it is altered. The form, in which the alteration must take place, and the substance of the alteration serious enough to trigger the application of Article 1(c) of the Procedural Regulation of 2015, are examined. The form of alteration should be viewed the same way as putting into effect of aid. The alteration can be substantial without any effect on the conditions of compatibility with the internal market.

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