1. 1 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Workshop 3 Audit of State Aids Ljubljana, 12-13 October 2009

2. 2 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Introductory Remarks 1.State Aids are a complex topic 2.Auditing state aids is of high importance due to the danger of cumulation or of artificial division 3.The workshop is meant to share experiences

3. 3 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Presentation on State Aid rules by Ms Annette Matthias-Werner

4. 4 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Concept of State Aid is clearly defined Key elements are: -Must be granted by the state/through state resources -Must confer a benefit or advantage on the recipient which it would not otherwise have received -Must favour certain undertakings or the production of certain goods -Must distort or threaten to distort competition - Must affect trade between member states

5. 5 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Exemptions I De Minimis De minimis aid is not considered to be state aid, because the effect on trade is considered not to be sufficient to provoke a distortion of competition. Therefore the question of cumulation with other state aid rules is sometimes difficult. Regulation 1998/2006 tries to clarify: no cumulation possible, if the other aid instrument relates to the same eligible costs.

6. 6 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Exemptions II General Block Exemption Rule and the coordination of the State Aid Schemes. Regulation n° 800/2008 of 6/8/2008 (OJ L 214 of 9/8/2008, p. 3) Chapter I: Horizontal provisions Standardised conditions and definitions Harmonisation & simplification Chapter II: Different exempted aid types, employment aid, SME aid, investment aid, aid for environment, R&D&I etc. Chapter III:Transitional provisions Annexes: Summary information form for measures under the GBER -Definition of SME (cf Commission Recommendation 2003) -Summary information sheets for R&D and large regional projects (specific information for large individual aid measures within an aid regime, which are below the notification threshold)

7. 7 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Help offered by DG Competion If state aid is involved, it can be declared compatible with the Treaty. legal instruments on http://ec.europa.eu/competition/state_aid/legislation/legisl ation.html http://ec.europa.eu/competition/state_aid/legislation/legisl ation.html Procedural conditions: state aid project must be notified In case of use of GBER only summary information must be send to the Commission

8. 8 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Presentation on Cohesion Policy and state aid by Dr Johannes Sollgruber

9. 9 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Standard clause in Operational Programmes Any aid granted under an operational programme must comply with the State aid rules that are in force.

10. 10 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Definition, allocation and separation of functions within the Intermediate Bodies In order to avoid risks arising from the fact that the IB is responsible for the selection and approval of operations and for the management verifications, adequate segregation of duties should be ensured between these two functions, either by: –ensuring different units within the IB are responsible for each function, or –ensuring different persons carry out the specific procedures.

11. 11 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Regional Aid guidelines Regional state aid guidelines. They give substance to the articles 87(3)(a) and 87(3)(c) of the Treaty. In essence they indicate the maximum grant rates allowed for certain specifically designated regions. Under the Regional Aid Guidelines 2007-2013, Member States were invited to notify a single regional aid map for 2007-2013 covering their entire territory as soon as possible after the publication of the Guidelines. The provisions for "statistical effected regions" to be revised in 2010 and their financial envelope as well as degressive state aid intensities are similar and prove coherence between both policies.

12. 12 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Regional aid guidelines Regional aid may be approved: Article 87(3)(a) : economic cohesion at Community level Article 87(3)(c): national disparities Award maxima under the Regional Aid Guidelines Large firms-Medium-firms-Small firms ‘a’ regions GDP per head <45% EU25 average ‘a’ regions GDP per head <60% EU25 average ‘a’ regions GDP per head <75% EU25 average ‘c’ areas (general case)

13. 13 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 State aid maps

14. 14 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Assessment of compatibility-a risk- based approach to State aid assessment Large regional aid eg risk capital RDI Specified aid categories

15. 15 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Management & Control procedures for state aid operations in Operational Programmes 2007 – 2013 in Greece by Ms Matthoula Triantafyllou

16. 16 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Specific characteristics of the state aid operations in OPs 2007-2013 Intermediate bodies responsible for the management of state aid operations: public administration bodies which have the responsibility to select the recipients, to allocate the individual grants according to national law provisions private bodies which have been selected through open call for proposals (e.g. financial institutions) Different categories of state aid actions: aid schemes covered by the block exception and concern SMEs investment and employment aid, aid for research and development and innovation in the form of non-repayable aid, loans, guarantees, interest subsidies or/and state aid through financial engineering instruments de minimis support measures which require notification

17. 17 Homologues Group Meeting Slovenia, October 2009 Republika SlovenijaEuropean Union Ljubljana, 12-13 October 2009 Criteria used to assess the effective functioning of systems Designing the management & control procedures, we took into account the assessment criteria for each key requirement, which are used when the system is audited. The key requirements include: 1. Definitions of functions between and within MA / IB 2. Adequate procedures for the selection of projects 3. Adequate information and guidance to beneficiaries 4. Adequate Management Verifications 5. Adequate audit trail 6. Reliable accounting, and financial reporting system 7. Necessary preventive and corrective actions