Public expenditure in the fishery and aquaculture sector
The fishery and aquaculture sector is submitted to rules on competition only to the extent determined by the European Parliament and the Council in line with Article 42 of the Treaty on the Functioning of the European Union (TFEU). Thus, the public spending could be categorized in the following way:
1. through EU financial instrument – the European Maritime and Fisheries Fund (EMFF)
- such funding is co-financed by the member states and the EU in line with EMFF Regulation (EU) No 508/2014 (in principle not state aid).
2. by means of state aid i.e. aid granted by the EU countries to the fishing and aquaculture industry other than financing under the EMFF within the scope of Article 42 TFEU.
For further information about the delimitation between these two categories, please see the presentation [2 MB] .
State aid rules for fisheries and aquaculture
State aid is in principle not compatible with the internal market except for specific cases such as:
- de minimis aid (i.e. sums that are so small they are unlikely to have any significant impact on competition);
- certain types of subsidy which are considered not to distort competition covered by the Fishery and Aquaculture Block Exemption Regulation.
If none of these two specific cases is applicable, then each member state has to notify to the Commission any state aid scheme it wishes to put in place or any state aid is intends to grant, and may not implement the scheme or grant the aid before the Commission has declared that it complies with the Treaty. (See Article 2 of Council regulation 659/1999 and Article 2 of Commission regulation 794/2004).
In the course of investigating the state aid cases, the Commission may process personal data. For further information please see the specific privacy statement [163 KB] .
How is the notification done?
The notification must be done electronically, via the Permanent Representation to the EU of the member state concerned through the electronic system SANI. A special template [282 KB] for notification for aid to the fisheries and aquaculture sector must be used.
What are the consequences if a member state fails to notify?
If a member state puts in place a state aid scheme or grants individual aid without notifying it to the Commission or without having obtained its approval of the notified scheme or aid, the state aid or state aid scheme will be considered unlawful (see Article 1, point (f) of Council Regulation 659/1999 ). In addition, the beneficiaries of an unlawful aid will in principle be ordered to pay back the aid. (see Article 14 of this Regulation).
When is a notification not needed?
Certain types of state aid to the fisheries and aquaculture sector are deemed to be compatible with the internal market, and therefore do not have to wait for approval by the Commission before they are put in place. A notification is not needed in case of:
1. types of aid covered by a block exemption regulation (Commission Regulation 736/2008 - the block exemption regulation in the fisheries sector expired on 31.12.2013 and the next Fishery and Aquaculture Block Exemption Regulation is planned to be adopted by the Commission by the end of 2014)
2. de minimis aid (Commission Regulation 717/2014; see below).
However, each member state has to prepare annually a report on all the state aid it has given during the year, including aid that falls under the de minimis rules. The report has to be submitted in electronic format by 30 June (see Articles 5 and 6 of Commission Regulation 794/2004; the information to be submitted is explained in Annex III C in this Regulation).
The Court of Justice of the EU has ruled in a case when a member state failed to send in its annual reports within the deadline (see Judgment of the Court of Justice of 12 January 2006 – Commission v Luxembourg (Case C-69/05)).
State aid not exceeding a certain ceiling over a period of time is deemed not to meet all the criteria laid down in Article 107(1) TFEU. This is the so-called de minimis aid. Commission Regulation 717/2014 (replacing Commission Regulation (EC) No 875/2007) sets the ceiling at 30 000 EUR per beneficiary over any period of three years. In addition, each member state has to respect the maximum cumulative amount set out in the annex to De minimis Regulation (the so-called national cap) while granting aid to the undertakings active in the fishery and aquaculture sector. De minimis aid granted to all undertakings in the fishery and aquaculture sector over three-year period cannot exceed 2,5 % of the annual catching, processing and aquaculture turnover per member state.
The de minimis aid in particular:
a. has to be managed in a transparent way;
b. may not be used for the purchase of fishing vessels, for modernisation or replacement of main or ancillary engines of fishing vessels or to operations increasing the fishing capacity of a vessel or equipment increasing the ability of a vessel to find fish or any other ineligible operations under the EMFF Regulation;
c. may not exceed the ceiling of 30 000 EUR for any period of three fiscal years.
Member states need to put in place control measures, which make it possible to verify that the rules have been complied with.
Important legal reference documents in the sector
- See Articles 107-109 of the Treaty on the Functioning of the European Union
- Fishery and Aquaculture Block Exemption Regulation (to be adopted by the end of 2014)
- De minimis Regulation – Commission Regulation (EU) No 717/2014
- Guidelines for the examination of State aid to fisheries and aquaculture (new guidelines will be adopted by the end of 2014)
- EMFF Regulation (EU) No 508/2014 (in particular Article 8)