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23rd August 2018

No deal: preparing for post-Brexit state aid rules

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State aid is the subject of one of the Government “technical notes” issued to help businesses and citizens to prepare for the eventuality of no deal being reached with the European Union when the UK leaves the EU. There is little in the note (published on 23 August 2018) which has not been trailed in previous public announcements.
In the event of a “no deal” scenario, the EU state aid rules will be transposed into UK domestic legislation under the European Union (Withdrawal) Act 2018.  This will apply to all sectors and will mirror current EU block exemptions, including the Agricultural Block Exemption Regulation, and the Fisheries Block Exemption Regulation.

From 29 March 2019, if no deal is reached:

  • The Competition and Markets Authority (CMA) will take over state aid regulation within the UK;
  • UK public authorities will need to notify state aid to any undertaking, through either the block exemption or through a full notification to the CMA instead of the European Commission;
  • Existing approvals of state aid, including block exemption approvals, will remain valid and will be carried over into UK law under the Withdrawal Act;
  • Any full notifications not yet approved by the Commission should be submitted to the CMA;
  • Complaints about unlawful aid or the misuse of aid should be made to the CMA.
Secondary legislation under the Withdrawal Act is intended for autumn 2018 which will replicate the existing state aid framework, with only technical modifications to correct deficiencies with the transposed EU law to ensure the regime operates effectively in a domestic context. After legislation has passed, the CMA will publish its own guidance explaining in more detail how it will operate its state aid regulatory function.

For more information about our State Aid service please visit our service page, or contact Stephen Cole on 01604 463346 or click here to email Stephen.