State aid and Brexit

Quite a few articles have now been published about Brexit and the implications for State aid. We've pulled together the main points.

19/07/2016

  • No one really knows with any certainty what will happen once we leave the EU.
  • If we stay in the single market, the substantive rules are likely to stay broadly the same.
  • If we leave, the options are more complicated, but include a fall back provision of the restrictions on subsidies in the WTO's Agreement on Subsidies and Countervailing Measures (see here). v This is much more limited than the current EU rules, and is enforceable only between Member States, although it may drive domestic legislation.
  • Until we leave the EU, you are at risk of challenge either in the UK courts or by the European Commission if you don't comply with the rules. For example, as in the recent Court of Appeal case (Sky Blue & anor v Coventry City).
  • No one knows what the attitude of the European Commission will be to enforcement proceedings between now and when we leave the EU. However, it will be difficult to rely with any certainty on an assumption that the Commission won't be interested in breaches of the rules.
  • One of the issues for the exit negotiations will be how any unlawful state aid given prior to exit is dealt with.

Please speak to David Owens or Edward Reynolds if you would like to discuss this is more detail.

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