brexit: the consequences for state aid control in the uk · brexit: the consequences for state aid...
TRANSCRIPT
![Page 1: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/1.jpg)
Brexit: the consequences for State aid control in the UK
George Peretz QC Barrister
Monckton Chambers
16.6.2017
www.monckton.com +44 (0)20 7405 7211
![Page 2: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/2.jpg)
What the English person says What the English person means
“With the greatest respect to X” “X is an idiot”
“X is a brave decision” “X is an insane decision”
“I am a bit disappointed about X” “I am furious about X”
www.monckton.com +44 (0)20 7405 7211
Disclaimer
![Page 3: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/3.jpg)
www.monckton.com +44 (0)20 7405 7211
Brexit
![Page 4: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/4.jpg)
www.monckton.com +44 (0)20 7405 7211
UK General Election
![Page 5: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/5.jpg)
www.monckton.com +44 (0)20 7405 7211
This …
![Page 6: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/6.jpg)
www.monckton.com +44 (0)20 7405 7211
… or this?
![Page 7: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/7.jpg)
www.monckton.com +44 (0)20 7405 7211
From this …
![Page 8: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/8.jpg)
www.monckton.com +44 (0)20 7405 7211
… to this.
![Page 9: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/9.jpg)
www.monckton.com +44 (0)20 7405 7211
DUP policy on EU (from 1975)
![Page 10: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/10.jpg)
www.monckton.com +44 (0)20 7405 7211
Queen’s Speech delayed: why?
![Page 11: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/11.jpg)
What the English person says What the English person means
“some disarray”
www.monckton.com +44 (0)20 7405 7211
Ministers sacked at DExEU
![Page 12: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/12.jpg)
• Complete silence in Government White Paper
• Ministers dislike: but keen on application to others
• Labour: Corbyn/McDonnell – State aid rules a constraint on nationalisation/industrial policy
• Conservatives: ditto – but now a positive!
www.monckton.com +44 (0)20 7405 7211
State aid: the politics
![Page 13: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/13.jpg)
• No limitation on State aid in Scottish, N Ireland, Welsh devolution settlements
• Unnecessary: EU rules applied
• But now? Real risk of subsidy races, distortions.
• But politically difficult
www.monckton.com +44 (0)20 7405 7211
Devolution
![Page 14: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/14.jpg)
www.monckton.com +44 (0)20 7405 7211
Great Repeal Bill
![Page 15: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/15.jpg)
State Aid: The Swiss “option”
![Page 16: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/16.jpg)
• 1972 FTA – Art 23(1)(iii)
• Vague provision
• No enforcement mechanism
• 1999 Air Transport Agreement
• Art 13 = Art 107 TFEU
• But weak enforcement
• Is this an available option?
The Swiss “option”
![Page 17: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/17.jpg)
20. Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field, notably in terms of competition and state aid, and in this regard encompass safeguards against unfair competitive advantages through, inter alia, tax, social, environmental and regulatory measures and practices.
www.monckton.com +44 (0)20 7405 7211
EU Council negotiating guidelines
![Page 18: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/18.jpg)
www.monckton.com +44 (0)20 7405 7211
State aid: The Iceland option
![Page 19: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/19.jpg)
61. Save as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.
Article 61 EEA Agreement
![Page 20: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/20.jpg)
• Same as EU
• See Article 62 EEA, Articles 5 and 24 of and Protocol 3 to Surveillance and Court Agreement
• EFTA Surveillance Authority = Commission
• EFTA Court = ECJ/General Court
• But fish products excluded
Clearance/enforcement
![Page 21: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/21.jpg)
• Do not join EEA
• But join EFTA and use ESA/EFTA Court for limited purposes including State aid
• ESA/EFTA Court would have functions under 2 Treaties
• UK judge(s)/UK commissioner(s) sit(s) on EFTA Court/ESA for the UK treaty functions only
www.monckton.com +44 (0)20 7405 7211
“Iceland minus”
![Page 22: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/22.jpg)
State Aid: the Ukraine option
![Page 23: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/23.jpg)
• Article 262: Sets out State aid rules
• Article 264: rules to be applied “using as sources of interpretation the criteria arising from the application of [the EU State aid rules] including the relevant jurisprudence of the [CJEU], as well as [Commission frameworks and guidance].”
EU/Ukraine Free Trade Agreement
![Page 24: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/24.jpg)
• Article 263: each of the EU and Ukraine annually report to each other on State aid granted on each side.
• Article 267: Ukraine must implement a domestic system of State aid control, with “an operationally independent authority … entrusted with the powers necessary for the full application of [the State aid rules]”
www.monckton.com +44 (0)20 7405 7211
EU/Ukraine FTA (2)
![Page 25: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/25.jpg)
• What to do about “affect trade between Member States”?
• Keeping key concepts in harmony: “have regard to”
www.monckton.com +44 (0)20 7405 7211
Difficulties in Ukraine to UK transplant: substance
![Page 26: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/26.jpg)
• Could it be done by the courts alone?
• No ability to get certainty by notification
• No ability to develop policy/guidelines
• Not suitable to decide Art 107(3) issues
• Who is the authority? CMA? Reserve power to Ministers to overrule?
• How to ensure consistency of policy between UK/Commission?
www.monckton.com +44 (0)20 7405 7211
Difficulties in Ukraine to UK transplant: enforcement body
![Page 27: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/27.jpg)
• What about aid granted by devolved Governments?
• What about aid granted by central Government?
• What about aid by legislation?
• CMA power to ask court for declaration of incompatibility?
www.monckton.com +44 (0)20 7405 7211
Difficulties in Ukraine to UK transplant: aid by Ministers/Parliament
![Page 28: Brexit: the consequences for State aid control in the UK · Brexit: the consequences for State aid control in the UK George Peretz QC Barrister Monckton Chambers 16.6.2017 +44 (0)20](https://reader034.vdocuments.site/reader034/viewer/2022042312/5edb33d7ad6a402d66654893/html5/thumbnails/28.jpg)
www.monckton.com +44 (0)20 7405 7211
State aid law in UK – the future?