The Office of the Cyprus Registrar for State Aid has announced the inauguration of the Cyprus Central State Aid and De Minimis Registry. It will comprise a computer-based system with two pillars, namely the Cyprus Central State Aid Registry and the Cyprus Central De Minimis Registry. The operation of the latter shall commence on 3rd January 2022 whereas the former shall follow at a later date to be announced
State Aids and De Minimis
A state aid is an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. State aids can be delivered in a variety of ways such as through the allocation of grant subsidies, the provision of interest and tax relief or the purchasing of goods and services on preferential terms. European Union rules on State aids were put in place to ensure that state-owned resources are not deployed to distort competition or create unfair advantage in the European single market. European Union rules generally prohibit state aid unless it can be justified under certain circumstances related to general economic development. The Commission is charged with ensuring that State aid rules are applied and observed equally across all the Member States. The European Union's operational programmes for regional development are subject to these State aid rules.
De Minimis rules are also in place, in order to discipline small state aid amounts (so-called De minimis aids) that are exempted from state aid control as they are deemed to have no impact on competition and trade in the European Union’s internal market. Certain categories of State Aid fall under the General Block Exemption Regulation (hereby the GBER) where no notification or approval of the European Commission is necessary, including that of De Minimis State Aid. De minimis is defined as the aid up to a fixed amount (ceiling), below which the state aids rules not to apply, as the amount of aid has no appreciable effect on trade between Member States of the European Union. Consequently, the rules on compatibility of State Aid are not applicable and can be granted for any purpose except minimal exceptions, such as export aid.
State Aids and COVID-19
The importance of state aids has been recently highlighted during the coronavirus pandemic, which has seen states react to unprecedented economic implications of a global scale and of an unpredictable duration. A State Aid Temporary Framework was adopted on 19th March 2020 in order to allow Member States of the European Union to exploit the flexibility benefits of State Aid rules in supporting affected undertakings in their economies amid the outbreak of the Coronavirus (COVID-19) pandemic, and has been amended according to developing issues, most recently on 18th November 2021.
The purpose of the Cyprus Central De Minimis Registry
The main purpose of the Central Registry for De Minimis Aids is the submission from all competent state authorities of all the De Minimis State Aids that will be granted to natural or legal persons or other beneficiaries (organisations, institutions etc) which engage in financial activity, regardless of their legal status. Through this Registry, the Office will achieve a closer monitoring of all aids as well as verify that no personal, departmental or national aggregate limits are exceeded.
From 3rd January 2022, the Central Registry for De Minimis Aids will be fully operational and for the next three (3) years, 2022 until 2024 (transitional period), all competent authorities must also follow the existing procedural handling of De Minimis Aid until the rolling three-year period is completed. During the transitional period of the three years (2022-2024) the competent authorities must, before granting the legal right of receiving the Aid, bear in mind the information both from the Central Registry for De Minimis Aids and from the written statement that is submitted as per the existing process and which is signed by the beneficiary of the aid before the granting of such aid, where they certify that they are not exceeding any of the aforementioned aggregate limits. According to the timeframe and agenda, from the 2nd January 2025 the Central Registry for De Minimis Aids shall be the sole method used by the competent authorities from which all the relevant checks shall be completed by the Office of the Cyprus Registrar for State Aids.
Submitting through the Central Registry for De Minimis Aids
After the completion of the submission of aid in the Central Registry for De Minimis Aids, an automated “Confirmation of Granting of De Minimis Aid” shall be produced digitally by the system, with a date of receipt being the date of publishing of the confirmation from the system. Furthermore, from the 3rd January 2022 a new confirmation shall be used by the competent authorities, the “Official Declaration of Undertaking” as suggested by the Office of the Cyprus Registrar for State Aids or create a declaration of their own that contains all the relevant information concerning the undertaking.
During the months of October and November 2021, the pilot period for the use of the system, more than 15 specialised trainings have been conducted by the Office of the Cyprus Registrar for State Aids to different competent state authorities, which were attended by more than 100 officers, and during which the training focus was on how the competent authority must handle and submit the Plans for De Minimis Aid that are published by them.
The system conducts all the relevant checks regarding the satisfaction of all regulations on De Minimis State Aid before the submission of the Aid in question. In case even one of the required regulations are not fulfilled, the submission of the aid in question is not allowed to be submitted and therefore is not granted to the beneficiary. Important checks conducted by the system are the maximum cumulative amount per Beneficiary, per Registry, per rolling three-year period. Additionally, it is noted that for the confirmation of the correctness of Beneficiary information before their submission through the system, as those shall be submitted by the Competent Authority, their connection through the Governmental Information Archive has been facilitated via the Governmental Portal Ariadne.