State aid

State aid is an instrument of policy laid down in the 1957 Treaty of Rome that founded of the European Community (EC).  The objective of State aid control is to ensure that any form of assistance provided by the State does not distort competition or affect trade between Member States.

State aid occurs when a public body provides an advantage on a selective basis to an undertaking that can affect trade between Member States and distorts or threatens to distort competition.  An undertaking is a company, organisation or legal person that engages in economic activities.  State aid can take many forms such as grants, loans, subsidies, guarantees or the provision of goods or services at rates that do not reflect market place.

The granting of State aid is governed by a set of rules in a number of guidelines, frameworks and exemptions set out by the European Commission to ensure that any aid does not affect trade or distort competition.  The rules define a wide range activities, set limits, and provide eligibility criteria for the granting of aid, and provide the Commission with the legal basis to monitor and investigate aid provided by Member States. 

The Commission must be notified of all schemes involving State aid and any aid granted without Commission approval or outside of the scope of the rules is automatically viewed as unlawful and recoverable.

State aid must be considered in all funding provided by Yorkshire Forward or through any of the funding programmes that the Agency manages.  All proposals for funding must consider State aid as part of project development, which will be examined in detail as part of the investment appraisal process.

View the schemes that Yorkshire Forward has notified to the Commission on our Notified schemes page.

More information is available on State aid in related documents and links.

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