Brussels (Brussels Morning) – The European Commission investigates Slovakia’s aid to NAJPI a.s. for glass sand extraction, questioning compliance with EU State aid rules after a court decision overturned initial approval under SME criteria.
The European Commission has unlocked an in-depth investigation to evaluate whether public support is given to the Slovak company NAJPI a.s. (‘NAJPI’) for developing a glass sand extraction area is in line with EU State aid rules.
The EU Commission‘s assessment began based on a complaint alleging that NAJPI profited from State aid incompatible with the internal market. In 2013, Slovakia gave NAJPI €4.99 million in regional aid to fund its investment in a glass sand extraction site in the Slovak territory of Trnavský kraj, Západné Slovensko.
On 20 July 2017, the EU Commission assumed a decision in which it concluded that the Slovak aid effort fulfilled the criteria laid down in the General Block Exemption Regulation (‘GBER’), and was thus compatible with the Treaty on the Functioning of the European Union (‘TFEU’) and exempted from the condition of prior notification and Commission approval.
How Did the General Court Impact NAJPI’s Aid?
In its ruling of 9 September 2020, the General Court overruled the Commission’s decision. In particular, the General Court assessed that the evidence provided by the complainant connecting to the links between NAJPI and another group was capable of giving rise to suspicions on the part of the Commission, as to NAJPI’s description as a small and medium-sized enterprise (‘SME’).
The General Court held that the EU Commission was needed to assess if the relevant thresholds for categorising NAJPI as an SME were surpassed in two consecutive accounting periods. The accurate classification of NAJPI as an SME or large enterprise is essential for the EU Commission to be able to correctly evaluate compliance with the criteria laid down in the GBER.
Why Did the EU Commission Initiate an Investigation?
EU Commission states that following the General Court’s judgment, It will now carry out a more in-depth analysis to further assess the aid to NAJPI. The EU Commission will consider in particular whether, at the moment of granting of aid, NAJPI could be permitted as an SME. The Commission will also evaluate whether, at the time of granting of aid, the requirements laid down in the GBER, in certain, concerning economic problems were fulfilled, as in such possibilities NAJPI would not qualify for regional aid.
EU State aid regulations, in particular the GBER and the 2007-2013 RAG, allow Member States
to support the economic development and occupation in disadvantaged areas of Europe and to promote regional cohesion in the Single Market while assuring a level playing field between Member States.
The GBER reports specific categories of State aid (such as regional aid) consistent with the TFEU, provided that they meet certain conditions. It thus exempts these categories from the need for prior notification to and approval by the EU Commission, permitting Member States to grant the aid directly and informing the Commission only ex-post.
