Get decisions on the admissibility of state assistance from the Antimonopoly Committee of Ukraine?
What is government assistance to business entities?
In accordance with the Law of Ukraine “On State Assistance to Business Entities”, state assistance to business entities is support in any form of business entities at the expense of state resources or local resources, which distorts or threatens to distort economic competition, creating advantages for the production of certain types of goods or the implementation of certain types of economic activity.
Government assistance is not the same as government support. State support is state aid only if the following conditions are fulfilled simultaneously:
– support is provided to the entity;
– State support is carried out at the expense of state resources or local resources;
– support creates advantages for the production of certain types of goods or the implementation of certain types of economic activity;
– support distorts or threatens to distort economic competition.
Article 9 of the Law of Ukraine “On State Assistance to Business Entities” establishes that a new state assistance, which is to be reported, can be provided only after receiving the relevant decision of the authorized body provided for by law.
Who should get a decision on the admissibility of state aid?
State aid providers (authorities, local governments, administrative and control authorities, and legal entities acting on their behalf, authorized to manage state resources or local resources and initiate and / or provide state assistance) submit reports on new state assistance only to the Antimonopoly Committee of Ukraine.
State aid is permissible if provided for the purpose of:
1) providing consumers with socially important goods, provided that such assistance is not discriminatory regarding the place of origin of the goods;
2) compensation of harm to persons injured as a result of emergency situations of technogenic or natural character, according to the law.
State aid may be recognized as admissible if it is provided for the following purposes:
1) promoting the socio-economic development of regions where the standard of living is low or the unemployment rate is high;
2) implementation of national development programs or solving social and economic problems of a national nature;
3) assistance to certain types of economic activities or business entities in certain economic zones, provided that this does not contradict the international treaties of Ukraine, the consent to which must be granted by the Verkhovna Rada of Ukraine;
4) support and preserve the national cultural heritage, if the influence of such state aid on competition is insignificant.
The Antimonopoly Committee of Ukraine carries out an assessment of the admissibility of certain categories of state assistance, in particular, on the basis of criteria determined by the Cabinet of Ministers of Ukraine.
How does the AMCU view received reports of new state aid?
According to the fifth part of Article 9 of the Law of Ukraine “On State Assistance to Business Entities”, a message on new state assistance is submitted by state aid providers to the Authorized Body in accordance with the procedure established by it, taking into account the deadlines for considering a message and a state aid case, defined by the Law.
The report on the new state aid must contain comprehensive and reliable information about the purpose, expected result, amount, timeframe, form, legal basis, providers and recipients of state aid.
Part two of Article 10 of the Law of Ukraine “On State Assistance to Business Entities” stipulates that a message on a new state aid is considered accepted for consideration after 15 days from the date of its receipt, if during this period the Authorized Body did not inform the state aid provider that the information the message does not meet the requirements or is incomplete to make a decision on the admissibility of state competition assistance and did not send a request for additional information ation.
According to the fifth part of Article 10 of the Law of Ukraine “On State Assistance to Business Entities”, decisions based on the results of consideration of a message on a new state assistance shall be made by the authorized body within two months from the date of its consideration.
In the event that reasonable grounds are identified for concluding on the inadmissibility of state assistance for competition or for conducting an in-depth analysis of the admissibility of state assistance for competition, the AMCU begins, in the manner determined by it, the consideration of a case on state assistance.
The Antimonopoly Committee of Ukraine takes decisions on the results of a state aid case within six months from the date of the decision to start considering such a case.
In accordance with paragraph 2 of paragraph 1 of Section IV of the Procedure for the Provision and Completion of Messages on New Government Assistance and on Amendments to the Conditions of Existing Government Assistance, approved by the order of the AMCU No. 2-rp dated March 4, 2016, a message on new government assistance shall be submitted by the Committee 105 calendar days before the date of entry into force of the relevant regulatory act or decision of the provider, which allows business entities to receive new state assistance.
Can the AMCU refuse to consider the message?
Yes, it can. If the state aid provider did not file within the prescribed period, in accordance with the request of the Antimonopoly Committee of Information, the report on the new state aid shall be considered withdrawn. In this case, the Authorized Body decides to refuse to consider the message and informs the representative of the state assistance in writing.
In addition, the state aid provider may withdraw its report on a new state aid at any time before the adoption of the final decision by the Antimonopoly Committee provided for by law.
However, the adoption by the AMCU of a decision to refuse to consider a communication does not deprive the applicant of the right to apply to the Anti-Monopoly Committee of Ukraine with a repeated, revised report on such state assistance.
What will happen if you do not submit a message to the AMCU about a new state assistance to business entities?
In accordance with the current legislation, a new state aid provided without notifying the AMCU or in the period after the announcement, but before it decides on the admissibility of state aid for competition, or is granted contrary to the decision of the Authorized body to recognize the new state aid as unacceptable for competition, is illegal state aid.
Penalties for providing state assistance to business entities without notifying the Antimonopoly Committee of Ukraine, the Law does not establish.
However, in the event that illegal state assistance is recognized as unacceptable for competition, the AMCU decides on its return.
Taking into account the provisions of the fifth part of Article 14 of the Law of Ukraine “On State Assistance to Business Entities”, the AMCU may require the return of illegal state aid within 10 years from the day the regulatory or administrative acts on the basis of which such assistance was provided.
In addition, failure to comply with the AMCU’s decision to return illegal state aid is grounds for refusing to make a decision on the admissibility for competition of new state aid and / or temporary suspension of the provision of existing state aid until the return of illegal state aid in full.