The State aid role of the Competition and Markets Authority in the event of a ‘no deal’ Brexit

25 January 2019

On 21 January 2019 the Government laid The State Aid (EU Exit) Regulations 2019 before Parliament, outlining the domestic State aid regime in the event that the UK leaves the EU without a deal on 29 March 2019. Subject to the successful passage of this Statutory Instrument (SI) through Parliament, the Competition and Markets Authority (CMA) will take on the role of UK State aid enforcement authority, in the place of the European Commission, from the date on which the UK leaves the EU.

The State Aid (EU Exit) Regulations 2019

The SI transposes the EU State aid regime into domestic law and, in accordance with the European Union (Withdrawal) Act, makes only minimal changes to the existing regime to ensure it is operable on 29 March 2019. Before exit day, the CMA will adopt and publish existing State aid guidelines as statements of policy.

Procedures

To ensure business certainty and continuity, State aid procedures under the SI are as similar as possible to the European Commission’s current rules. The CMA will make its procedures clear and efficient and will be accessible to advise aid grantors before the UK leaves the EU. In advance of exit day, the CMA will publish a notice on:

  • the form and content of notifications and complaints;
  • the form, content, and date for the submission of annual reports in relation to existing aid schemes, and aid which is exempt from notification; and
  • the form and summary information for aid that is exempt from notification.

Decision-Making

All State aid cases will be considered by a dedicated CMA State aid team, and decisions will be taken by senior officials. The design of the CMA’s decision-making structures and processes is under review to ensure robust, independent, and impartial State aid enforcement. The CMA will publish details on the decision-making structures prior to 29 March 2019.

Notifications

Before the UK leaves the EU, the CMA will engage in informal ‘pre-notification’ discussions with aid grantors expecting to notify State aid cases to the CMA in the first three months following exit day. To begin such discussions, aid grantors can contact the CMA by emailing stateaidenquiries@cma.gov.uk.

Following exit day, the CMA will accept notifications of State aid through a new online system. The CMA will provide aid grantors with guidance and training on how to access and use this system.

Approvals and Exemptions

Existing State aid approvals and exemptions from the European Commission will remain valid and will not need to be notified to the CMA.

In the event that State aid has been notified to the European Commission, but no decision has been made before exit day, the aid will need to be notified to the CMA.

The CMA will have the power to investigate aid misuse and unlawful aid, whether granted before or after exit day. Complaints about the misuse of aid will be directed to the CMA through an online complaints form.

Summary

In the event of a ‘no deal’ Brexit, the existing EU State aid framework will remain largely unchanged in UK domestic law. However:

  • the CMA will replace the European Commission as the UK State aid regulatory authority;
  • notifications of State aid should be directed to the CMA; and
  • existing approvals and exemptions by the European Commission will remain valid, but notifications not yet approved or exempted by the Commission should be submitted to the CMA.

The CMA will publish guidelines for aid grantors in due course, clarifying any changes to the State aid policy, procedural rules, decision-making structures, and notification processes.

Further advice

For advice and assistance, please contact one of our team whose details are listed below. 

 

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published.

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