European Commission's New Best Practices Code for the conduct of State aid control procedures

EU

On 17 July 2018, the European Commission adopted a new Best Practices Code for the conduct of State aid control procedures.

The former 2009 Code needed updating following  evolution of State aid investigations and also to take into consideration the major state aid reform, the State Aid Modernisation. This reform aims at allowing Member States to quickly implement State aid that fosters investment, economic growth and job creation, leaving the Commission to focus its State aid control on cases most likely to distort competition in the Single Market. It has successfully excluded from the scope of the European Commission many categories of aid, thanks to the Exemption Regulations, but aid involving significant amounts are now subject to deeper scrutiny by the European Commission, including an in-depth economic assessment often underestimated by Member States in the early stages of preparing a state aid notification.

Furthermore, in the context of the Multiannual Financial Framework 2021–2027, the Commission has proposed to simplify co-investment involving both EU funding and Member State investment, through a revision of the EU State aid Enabling Regulation. Indeed, European funds that are allocated by Member States to beneficiaries must also comply with State aid rules, leading to more legal assessment and administrative burdens.

The Best Practices Code focuses on how the Commission, Member States and other stakeholders (beneficiaries of an aid, complainants, etc.) intervene in State aid procedures. It offers guidance on the most effective handling of complex State aid cases, on following up complaints about State aid and on monitoring the implementation by Member States of State aid measures.

In fact, the Code explains how notifications and investigations of alleged aid are dealt with in practice and clarifies:

  • how the Commission will contact Member State authorities and provide guidance before State aid measures are formally notified;
  • how Member State authorities can implement measures that are unlikely to distort competition without formally notifying the Commission;
  • how the Commission and the Member States will work together to facilitate the handling of State aid cases by allowing Member States to indicate the cases of highest priority;
  • how the Commission will maintain a network of country coordinators for day-to-day contacts with each Member State to provide immediate support in dealing with any issues;
  • how the Commission will work with Member States, including by agreeing how to process new, complex or urgent cases, such as TEN-T network projects supporting the construction and upgrade of transport infrastructure;
  • how the Commission can obtain relevant information directly from relevant public authorities or companies by using market information tools;
  • how the Commission will work with Member States on evaluation and monitoring of State aid measures; and
  • how complaints about State aid will be handled by the Commission following changes in the State aid Procedural Regulation.

The text of the Code is available via the following links:

It is a useful guide for public authorities and undertakings that face State aid procedures for the first time.