State aid rules, Brexit adjustment reserve and fisheries

State aid rules, Brexit adjustment reserve and fisheries

On 17 February 2021, Dutch Member of the European Parliament (MEP) Paul Tang of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, posed a written parliamentary question to the European Commission: 

“Under the Brexit adjustment reserve, EUR 130 million have been earmarked for Dutch fisheries. This should be spent on measures to help the sector adjust to the new relationship with the UK.

One possible way to spend these funds would be to make money available for fishermen and women to enable them to buy up their reduced fishing quotas on the market. This would allow them to keep their existing quotas for longer and thus prepare them for the loss of fishing rights to the UK.

1. Does spending from the Brexit adjustment reserve fall under the normal State aid rules or under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak?

2. Would direct aid to fishermen and women to buy up their lost quotas on the market fall within these State aid rules?

3. Would direct aid to fishermen and women to buy up their lost quotas on the market be consistent with the purpose of the Brexit adjustment reserve?”

On 5 May 2021, Executive Vice-President Vestager, responded on behalf of the European Commission stating: “The allocation method for the pre-financing under the proposal for the Brexit Adjustment Reserve (“BAR”) takes into account the importance of trade in goods and services with the United Kingdom (UK) and of fisheries in the UK waters. However, the Commission does not propose any specific earmarking of allocations for the fisheries sector.

1. Pursuant to Article 5(4) of the proposal the measures financed under the BAR have to comply not only with the specific rules of the future BAR Regulation, but with Union law in general, including State aid rules. The Commission services provided the Member States with non-binding guidance on the types of aid measures that may be considered in this context. Spending under the BAR is aimed at limiting the consequences of the Brexit and has a different purpose than the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. On 23 April 2021, the Commission approved three French schemes worth EUR 100 million in total, to support the fisheries sector affected by Brexit, under Article 107(3)(c) of the Treaty on the Functioning of the European Union.

2. Direct aid to fishermen under the BAR to buy up their lost quotas would require a case-by-case assessment under State aid rules. It is not covered by the above-mentioned guidance.

3. The Commission considers that, for a limited period of time of three months at the beginning of 2021, direct aid to fishers for their income loss related to the quota share reductions resulting from the EU/UK Trade and Cooperation Agreement (TCA) may be authorised under certain conditions in line with State aid rules. In this context, there are no restrictions or indications as regards the use by the beneficiaries of such direct aid. In the long term, and in view of Common Fisheries Policy objectives, compensation measures for fishers under the Reserve should be linked to at least temporary cessation of their fishing activity, thus reducing the pressure on the sector due to the quota share reductions, and facilitating the transition and adaptation to the situation resulting from the TCA.”

Source: https://www.europarl.europa.eu/doceo/document/E-9-2021-000972_EN.html

Photo Credit : https://pixabay.com/photos/lauwersoog-port-fisheries-2239627/

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