In a press release issued on 2 July, the European Commission announced that it has prolonged the validity of certain State aid rules. It has also decided to make certain targeted adjustments to the existing rules with a view to mitigate the economic and financial impact of COVID-19 on companies.

To this end, the Commission has adopted a new Regulation and published a Communication which:

a) prolong by one year (until 2021) the following rules which would otherwise expire in 2020:

• Guidelines on regional State aid for 2014-2020
• Guidelines on State aid to promote risk finance investments
• Guidelines on State aid for environmental protection and energy
• Communication on the execution of important projects of common European interest (IPCEI)
• Communication on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to short-term export-credit insurance (STEC)

b) prolong by three years (until 2023) the following rules which would otherwise expire in 2020:

• General Block Exemption Regulation (GBER)
• De minimis Regulation
• Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty

 c) adjust the current rules;

1. to allow companies which entered into difficulties as a result of the coronavirus outbreak, and which would not, under existing rules, be able to receive certain types of aid, to remain eligible to receive aid under the GBER and other sets of rules (namely the Guidelines on regional State aid for 2014-2020, the Framework for State aid for research and development and innovation, Guidelines on State aid for environmental protection and energy and IPCEI Communication), for a set period of time during and after the crisis.
2. to ensure that job losses that a company may incur due to the COVID-19 pandemic would not be considered as a relocation. Thus such companies which have received regional investment aid falling under GBER would not be in breach of their commitments previously undertaken.

SGEI (services of general economic interest) de minimis Regulation

The SGEI de minimis Regulation is a framework for supporting the delivery of public services to citizens. The EU Commission has recently proposed to prolong by three years such Regulation, which would otherwise expire in 2020, and to allow undertakings that entered into difficulty because of the COVID-19 outbreak to remain eligible for this type of aid for a limited period of time.

Should you have any queries or wish to discuss further, please send an email to covid@kpmg.com.mt.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.