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State aid schemes

We have extensive state aid powers and are legally obliged to publish information about our state aid schemes. 

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Our state aid powers

We have extensive state aid powers and are legally obliged to publish our state aid schemes. Public assistance represents state aid if it provides an economic advantage to commercial undertakings and that advantage might affect international trade and competition.

State aid is the European Commission (EC) term for public support awarded to any type of organisation operating commercially where the aid is discretionary and has potential to distort competition and affect trade between Member States of the European Union. Support in many forms can involve state aid including financial grants, soft loans, free or subsidised services and aid to social enterprises delivering commercial activities.

The state aid rules are complex. They are set by the EC and comprise various articles of the Treaty on the Functioning of the European Union (TFEU), as well as Regulations, Frameworks and Guidelines. These lay out the scope, limits and rules under which aid can be given without seeking prior approval from the EC. This is called “exemption”. The EC governs Member State compliance with the Regulations and any aid measures outwith the rules must be notified to the EC for approval. Post Brexit, the UK Competition and Markets Authority (CMA) will assume this governing role.

As a public body with a broad economic development remit, HIE regularly grants state aid through our registered state aid schemes i.e. the General Block Exemption (GBER), Fisheries & Aquaculture Block Exemption (FBER) and Agricultural Block Exemption (ABER). We also use De Minimis aid to support activities that cannot be assisted through the Block Exemption Regulations. The De Minimis rules set different maximums over a three-year period depending on the sector the project operates within. Altogether, we have large toolkit of support allowing us to offer State aid to businesses and other organisations.

We always assess each project, firstly for its potential to meet our economic development priorities and policies for the Highlands and Islands. If HIE assistance is considered appropriate, we will then determine if the support constitutes state aid. If it does, HIE staff will work with clients to find the most appropriate legal cover to avoid breaching the competition laws. It is important that applicants provide full and accurate declarations in support of State aid assessments. Any competitor can challenge a granting of state aid in a UK court, and if any breach of the Regulations is found the court is obliged to order the client to make full repayment of the State aid immediately. This is why it is vital that HIE gets accurate declarations from applicants and why we publish our detailed scheme rules.

Further information about how state aid is applied in Scotland can be found on the Scottish Government website.