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 please contact Stephen Cole by clicking here.