In accordance with Regulation 1407/2013/EU, subject to certain conditions, measures intended to grant State aid are exempt from the notification requirement laid down in Article 108(3) TFEU where the amount granted per Member State to a single undertaking does not exceed EUR 200,000 over any period of three fiscal years. This amount is called the “de minimis ceiling”.
In June 2014, Zennaro filed an application for subvention with the Italian National Institute for Insurance against Accidents at Work (INAIL), further to a public notice issued by the latter with a view to granting de minimis aid. The amount of aid requested by Zennaro was lower than EUR 200,000. However, it appeared, in the course of the procedure, but after the admission of Zennaro’s application, that the latter had already received State aid from other Italian authorities over the three preceding fiscal years. The cumulation of the aid requested by Zennaro with the aid already received would have exceeded the EUR 200,000 de minimis ceiling. Therefore, Zennaro amended its initial application, revising the required subvention downwards so as to avoid exceeding the de minimis ceiling. Nevertheless, INAIL refused to grant Zennaro’s application unless Zennaro were to forgo the financial assistance previously granted by another authority, arguing in particular that Regulation 1407/2013/EU should be interpreted as preventing an application for aid from being modified after its admission. Subsequently, Zennaro agreed to forgo a portion of the said previous financial assistance, but INAIL still refused to grant Zennaro’s application.
The case was brought before the Italian courts, which referred questions to the Court of Justice for a preliminary ruling.
In its judgment of 28 October 2020 (C-608/19), the Court of Justice ruled that, in accordance with Regulation 1407/2013/EU, an undertaking whose Member State of establishment is planning to grant it de minimis aid which, because of the existence of previous aid, would bring the total amount of aid granted to that undertaking above the ceiling of EUR 200,000 over a period of three fiscal years, has two options. On the one hand, the said undertaking may opt to reduce the funding required. On the other hand, it may forgo, in full or in part, previous financial assistance already received. However, the Court of Justice also underlined that, under Regulation 1407/2013/EU, Member States are not required to allow applicant undertakings to amend their applications for aid before such aid is granted, so as not to exceed the de minimis ceiling. It is for the national courts to assess the legal consequences of the fact that undertakings do not have the option of making such changes, it being understood that they may be made only at a date prior to that on which the de minimis aid is granted.
In support of this ruling, the Court of Justice found that, pursuant to the wording of Regulation 1407/2013/EU, the monitoring carried out by the Member States to ensure that the rules on cumulation are complied with must take place “before granting the aid”. However, in accordance with this regulation, de minimis aid is deemed granted at the moment when the legal right to receive the aid is conferred on the undertaking “under the applicable national legal regime”, irrespective of the date of payment of the de minimis aid to the undertaking. Therefore, it is for the referring court to determine, on the basis of applicable national law, when that aid must be considered to be granted.
Moreover, Regulation 1407/2013 contains no provisions pursuant to which applicants may, if necessary, amend their applications for aid by reducing the amount thereof or by forgoing previous aid, so as to comply with the de minimis ceiling. Therefore, since the granting of aid is governed by the applicable national rules, the Member States enjoy broad discretion when determining the procedure for granting such aid.
The Court also stressed that the power of the Member States to give applicants the right to amend their applications for aid until such aid is granted, by reducing the amount of the funding applied for or by forgoing previous aid already received, does not undermine the conduct of the procedure for examining their applications. Indeed, monitoring of the conditions for obtaining aid relating to compliance with the de minimis ceiling occurs only upon granting the aid. Therefore, the fact that it is impossible for undertakings to amend their applications for aid after new aid has been granted cannot in and of itself constitute a “penalisation” of the undertakings in question.
Please contact Pierre de Bandt or Raluca Gherghinaru for further information regarding the above or for general information relating state aid and competition law.