New amendments to the Decree on Rules for Granting of State Aid (“State Aid Decree”) came into force on 14 November 2013. The changes pertain to the rules on de minimis state aid and state aid in the form of compensation for services of general economic interest.
De minimis state aid
The general rule is that state aid must be notified to the Commission for state aid control before being awarded. The Commission assesses whether such aid is permitted according to the Law on State Aid Control and the State Aid Decree. As an exception, de minimis state aid is not subject to the Commission’s assessment but must only be notified to the Commission. The amount of de minimis state aid to a single undertaking is capped at EUR 200.000 over a period of three years (EUR 100,000 in the road transport sector). In 2012, de minimis aid represented 4% of totally registered state aid for that year, or RSD 2.650 million (around EUR 23 million).
Compensation for services of general economic interest as de minimis state aid
One of the novelties brought about by the amendments to the State Aid Decree is that de minimis state aid can now be awarded as a compensation for services of general economic interest, in the maximum amount of EUR 500.000. The services of general economic interest are economic activities that would not be supplied on the market without public intervention, or would be supplied under different condition pertaining to quality, safety, affordability, equal treatment or universal access. An example of such service would be the construction of broadband network infrastructure in sparsely populated areas, i.e. in the areas where private investors do not find business case to provide such services. The above-mentioned changes are in line with the Commission Regulation of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimisaid granted to the undertakings providing services of general economic interest.
Compensation for services of general economic interests which does not represent state aid
The State Aid Decree specifies that the compensation for services of general economic interest does not constitute state aid if there is a clearly defined obligation to provide services of general economic interest, the parameters on the basis of which the compensation is calculated are established in advance in an objective and transparent manner, the compensation covers only costs and reasonable profit of the recipient and the recipient undertaking is selected in a public procurement procedure or the compensation is determined on the basis of market criteria.
Compensation for services of general economic interests which represents permissible state aid
In case contract for services of general economic interest is not awarded in public procurement procedure and the amount of compensation is not calculated on the basis of market criteria, the compensation for provision of services of general economic interest will be deemed state aid but will not be subject to the assessment by the Commission if the following conditions are met: 1) compensation does not exceed the annual amount of EUR 15 million (according to previous version of the Decree, the maximum limit was set at EUR 30 million), except in the road transport sector where different rules apply; 2) compensation is awarded to health care facilities and undertakings providing services of general economic interest in social housing; 3) compensation is awarded to airports where average annual traffic during the period of two years preceding the aid does not exceed 200.000 passengers (the limit under the previous version of the Decree was one million passengers); 4) if the period for provision of services of general economic interest does not exceed 10 years, except if the service provider must invest in infrastructure necessary for provision of service of general economic interest that requires longer amortization. This last condition is awkwardly formulated as a stand-alone condition alternative to other mentioned conditions, although such condition makes sense only as a general requirement that must be satisfied in any of above mentioned individual cases. This follows from the Commission Decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, which served as a model for domestic legislator. In the Commission’s Decision, a 10-year period for provision of services of general economic interest represents general precondition that must be satisfied in each case. A different interpretation would obviously not make sense, since it could not have been the intention of the State Aid Decree to provide that any amount of state aid could be awarded to an undertaking if it is entrusted with the provision of services of general economic for a period shorter than 10 years.
Cumulation of state aid
There is a new provision according to which de minimis aid (except aid granted in the form of compensation for provision of services of general economic interest) can be cumulated with other types of state aid, up to the maximum limit set for the specific type of state aid. Prior to the amendments, cumulation was not possible – de minimisstate aid could have been awarded only if no other type of state aid (regional, horizontal or sectorial state aid) had not been permitted.
