Q&As

If a grant agreement concluded before the end of the transition period is deemed to be de-minimis aid under the current State aid regime, can the grant payments continue to be made after the end of the transition period on that basis?

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Produced in partnership with Fergus Randolph QC of Brick Court Chambers
Published on LexisPSL on 21/10/2020

The following Public Law Q&A produced in partnership with Fergus Randolph QC of Brick Court Chambers provides comprehensive and up to date legal information covering:

  • If a grant agreement concluded before the end of the transition period is deemed to be de-minimis aid under the current State aid regime, can the grant payments continue to be made after the end of the transition period on that basis?

The short answer is that the position is not clear as it depends on legislation which is presently in draft. 

Under the Withdrawal Agreement, the UK remains subject to existing EU State aid rules during the transition/implementation period and the EU authorities retain competence to initiate State aid administrative procedures in respect of the UK for four years after the end of the transition period on 31 December 2020 (IP completion day). However, as noted in the query, the detail of the State aid regime and approach in the UK after IP completion day is not clear.

Assuming that draft legislation recently presented to Parliament (the State Aid (Revocations and Amendments) (EU Exit) Regulations 2020, SI 2020/Draft) does become law, then as of IP completion day, retained EU State aid laws (including in relation to de minimis aid), will be disapplied and revoked, save insofar as such law is covered by the Northern Ireland Protocol to the Withdrawal Agreement, ie aid which affects trade between Northern Ireland and the EU. 

The position for Northern Ireland is further complicated by the UK Internal Market Bill, which introduces provisions allow UK ministers to introduce further regulations to determine how State aid law is to be applied. For background reading, see News Analysis: Brexit explainer—UK Internal Market Bill. 

At paragraph 11.1, the Explanatory Memorandum to the draft legislation states in terms that:

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