As highlighted in my previous response of 5th July last, the €45 million Brexit Processing Capital Support Scheme is designed to counter the adverse consequences of the withdrawal of the United Kingdom from the European Union.
It seeks to support the processing sector to engage in transformational change, mitigating the effects of the Trade and Cooperation Agreement and Brexit, while also building more environmentally friendly, sustainable and competitive enterprises which serve the EU and wider global markets, create higher levels of employment more locally, and make better and more sustainable use of Irish landed or imported raw material.
While it is correct to say that the EU Brexit Adjustment Reserve Regulation (2021/1755) does not preclude supports to non-SME enterprises, any BAR funded scheme for the seafood sector requiring State Aid approval must be consistent with the European Commission’s Guidelines for the examination of State Aid to the Fisheries and Aquaculture sector.
The Commission Guidelines set out the principles that the Commission will apply when assessing whether aid to the fishery and aquaculture sector can be considered compatible with the internal market under Article 107(2) or Article 107(3) of the Treaty.
Paragraph 9 of the Guidelines state as follows: "State aid to the fishery and aquaculture sector is embedded within the broader framework of the Common Fisheries Policy (CFP). Consequently, the use of State aid can only be justified if it is in line with the objectives of the CFP.
Therefore, the Commission applies and interprets these Guidelines in accordance with the rules of the CFP. Within the CFP the Union provides financial support to the fishery and aquaculture sector through the EMFF. The social and economic impact of public support is the same, irrespective of whether it is (even partly) financed by the Union or by a Member State alone. The Commission therefore considers that there should be consistency and coherence between its policy of State aid control and the support which is granted under the CFP".
Furthermore, paragraph 34 of the Guidelines state as follows: "An aid measure of the same kind as an operation that is eligible for funding under Regulation (EU) No 508/2014 (the EMFF Regulation) can only be considered compatible with the internal market if it complies with the relevant provisions of that Regulation for that kind of operation, in particular, with the provisions on the intensity of public aid".
Article 69 of the EMFF Regulation restricts grant supports for capital investment in seafood processing to SMEs. Supports to non-SME seafood processors for capital investment is permitted only through financial instruments.
Therefore, in accordance with the above provisions of the Commission Guidelines, aid to seafood processors for capital investment will only be considered by the Commission to be compatible with the internal market if the aid scheme follows the rules of article 69 of the EMFF.
