State aid rules after EU exit

The United Kingdom left the European Union on 31 January 2020, and the transition period ended on 31 December 2020. The UK and EU agreed to terms on a Comprehensive Free Trade Agreement on 24 December 2020 and the EU-UK Trade and Cooperation Agreement received Royal Assent on 31 December 2020.

From 1 January 2021, all subsidies provided by public authorities in Northern Ireland must comply with either the EU State aid rules or Chapter 3 of the EU-UK Trade and Cooperation Agreement and any other international subsidy commitments.

State aid in Northern Ireland from 1 January 2021

Any aid granted to companies in Northern Ireland from 1 January 2021 which falls under Article 10 of the Northern Ireland Protocol that is, in respect of measures which affect trade in goods between Northern Ireland and the European Union will have to follow the EU State aid rules.  

The EU State aid rules will no longer apply to most aid provided by government departments and other public authorities in England, Scotland and Wales, unless this relates to Northern Ireland companies and is within the scope of Article 10 of the Northern Ireland Protocol.

The EU-UK Trade and Cooperation Agreement

The UK and EU have agreed to terms on a Comprehensive Free Trade Agreement. Chapter 3 of this agreement contains provisions related to subsidy control from 1 January 2021, aid providers must comply with these, except for aid that falls under Article 10 of the Northern Ireland Protocol. Aid providers also have to comply with World Trade Organisation (WTO) subsidy rules in respect of 'goods based' activities and the other international commitments.

Subsidy control guidance

The Department for Business Energy and Industrial Strategy (BEIS) has provided guidance on the subsidies chapter of the UK-EU Trade and Cooperation Agreement (TCA), WTO rules on subsidies, and other international subsidy commitments.

Of particular note is the BEIS Technical guidance which has been drafted to assist public authorities assess how individual subsidies comply with the TCA. The guidance also covers the interpretation of Article 10 of the Northern Ireland Protocol on the EC's State aid rules

Please note that BEIS highly recommends that public authorities complete the table at Annex 2 of the guidance and retain this for their records, as this information could be requested by the EU or by an interested party considering a domestic challenge.

Role of the DfE State aid Unit

The DfE State aid unit (SAU) will continue to provide advice and guidance to Northern Ireland government departments and their arm's length bodies on the application of the EU State aid rules, the TCA and WTO rules on subsidies, and other international subsidy commitments.

If you have any questions on any aspect of the new arrangements please contact the State aid Unit by e-mailing stateaid@economy-ni.gov.uk

 

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