State aid to banks (IVOR nr. 109) 2018/2.5.2:2.5.2 Unlawful aid

State aid to banks (IVOR nr. 109) 2018/2.5.2

2.5.2 Unlawful aid

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

In the previous subsection, it was established that Member States are required to notify new aid. However, it is conceivable that a Member State grants aid without notifying the Commission. This can be case when a Member State wants to avoid Commission control. However, there does not necessarily have to be bad intent. For instance, the Member State can be of the opinion that the measure does not constitute aid and that it therefore does not have to be notified.

If a Member State grants aid without notifying the Commission, then there is unlawful aid. Article 1(f) of the Procedural Regulation gives the following definition of ‘unlawful aid’: ‘unlawful aid’ is new aid put into effect in contravention of Article 108(3) TFEU.1Unlawful aid should not be confused with incompatible aid. Incompatible aid is aid that falls under the prohibition of Article 107(1) and that is not declared compatible in the sense of Article 107(2) or 107(3). Incompatible aid concerns substantive rules, whereas unlawful aid concerns procedural rules.

The Commission is obliged to examine whether unlawful aid is compatible with the common market. Before taking a decision on the compatibility of the aid, the Commission can adopt an injunction. Three types of injunctions are possible: i) an information injunction2, ii) a suspension injunction3 and iii) a recovery injunction4.

The procedure regarding unlawful aid is similar to that of new aid. This means that this procedure also can consist of two stages: a preliminary investigation procedure and a formal investigation procedure (which is only initiated if the Commission chooses to).5 In contrast to the procedure regarding new aid, the Commission is with respect to unlawful aid not bound by the time-limit set out in Articles 4(5), 7(6) and 7(7).6 Another difference is that the above- mentioned injunctions are not possible in the procedure regarding new aid.

On the basis of Article 16 of the Procedural Regulation7, the Commission can take a recovery decision when it considers the unlawful aid to be incompatible. The Commission is however bound by general principles of EU law: Article 16 provides that the Commission shall not require recovery if this would be contrary to a general principle of EU law.8

Deze functie is alleen te gebruiken als je bent ingelogd.