AMCU studies a new European method for assessing aid

Specifics of the application in the European Union of the principles of assessing the consequences of State Aid (balancing test), the potential benefit of such an assessment for competition and the legal basis for its use. These issues and practical cases were discussed on February 17, 2023 during a webinar by experts of the EU Project “Support to the Antimonopoly Committee of Ukraine for Enforcing State Aid Rules” (SESAR) and specialists of Department for State Aid Monitoring and Control, Legal Department and Department of Economic Analysis of the Antimonopoly Committee of Ukraine.

The balancing test is a method of evaluating State Aid, which consists in an in-depth comparative analysis of the positive and negative consequences of the provision of such aid for market competition. If the overall balance of effects is positive, aid can be granted, but if the balance is negative, further work is required to minimize the risks of distortion of competition, or even a ban on aid. In the practice of the European Commission, the balancing test is applied when the current guidelines cannot be fully applied for the assessment of State Aid in a specific case or such guidelines are absent.

In general, the balancing test is a relatively new method of assessing State Aid. The European Commission presented it in 2009 to introduce a more economic approach to assessing the effects of State Aid instead of a formal one.

There is also existing European judicial practice regarding the assessment of the compatibility of State Aid using the balancing test.

As Oksana Chabanyuk, Director of Department for State Aid Monitoring and Control of the AMCU noted, the mentioned European approaches, after detailed study and processing of the relevant experience, could also be applied by the AMCU during the development of drafts of new criteria for assessing the compatibility of various categories of State Aid.

“So far, the AMCU has not had the practice of applying the balancing test in its work. At the same time, AMCU is currently actively working on bringing Ukrainian legislation in the field of State Aid into compliance with EU legislation. Therefore, the assistance of experts in developing a new, possibly additional, method of assessing State Aid for the AMCU’s practice is extremely valuable”, said Oksana Chabanyuk.

In his turn, SESAR Project Team Leader, Stefan Sabau, noted the significant progress in the work of AMCU on improving the State Aid evaluation system and the importance of developing the mentioned criteria. He noted that the specified criteria are currently under discussion in the EU. At the same time, joining Ukraine to this process is a positive signal.

“Today we present you a practical case from Romania's experience. This case was considered for a long time, because the experts of the European Union also did not have a perfect practice of applying the balancing test: how to compare the negative and positive effects of State Aid for competition. But I am sure, that in the future, having already a draft of the criteria, you will be able to deal with such cases better than us”, Stefan Sabau stressed.

To be noted: The AMCU cooperates with the SESAR project in the framework of the development of criteria for evaluating State Aid in various sectors. As part of this cooperation, a series of educational webinars was planned for AMCU employees, which was forced to stop with the outbreak of a large-scale war. Now, almost a year later, this direction of cooperation has been resumed.