The Antimonopoly Committee of Ukraine published the Clarification regarding services of general economic interest
In the Clarification on the application of state aid legislation on 20.03.2018 № 4-рр/дд the Antimonopoly Committee of Ukraine, as the authorized body on State Aid, has defined the criteria for identifying the services of general economic interest (SGEI).
Clarification № 4-рр/дд also provides a list of the criteria and explanations for determining that the compensation of reasonable expenses for the SGEI will not constitute state aid to undertakings.
Thus, according to the Clarification, services that meet the following conditions may be classified as SGEI:
– relates to the basic general needs of the public;29
– can’t be provided on a commercial basis without state aid;
– compensation of reasonable expenses for providing SGEI.
Compensation of reasonable expenses for providing SGEI will not constitute state aid to undertakings if:
1) the recipient undertaking must have public service obligations and the obligations must be clearly defined;
2) the parameters for calculating the compensation must be objective, transparent and established in advance
3) the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of the public service obligations, taking into account the relevant receipts and a reasonable profit;
4) Where the undertaking which is to discharge public service obligations is not chosen pursuant to a public procurement procedure which would allow for the selection of the tenderer capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs of a typical well-run company.
As is known, the Law of Ukraine “On State Aid to Undertakings” does not apply to support of economic activities related to the provision of services of general economic interest in terms of compensation for reasonable expenses for the provision of such services.
The full text of the Clarification is available at the link.