Act

Question 1

What is a subsidy (Part 1: 2)

Answer 1

(1) In this Act, “subsidy” means financial assistance which—

(a) is given, directly or indirectly, from public resources by a public authority,

(b) confers an economic advantage on one or more enterprises,

(c) is specific, that is, is such that it benefits one or more enterprises over one or
more other enterprises with respect to the production of goods or the provision
of services, and

(d) has, or is capable of having, an effect on—
(i) competition or investment within the United Kingdom,
(ii) trade between the United Kingdom and a country or territory outside
the United Kingdom, or
(iii) investment as between the United Kingdom and a country or territory
outside the United Kingdom.

Question 2

Part 1 title

Answer 2

PART 1
OVERVIEW AND KEY INTERPRETATION

Question 3

financial assistance may be given as
include— Part 1: 2; 1

Answer 3

(a) a direct transfer of funds (such as grants or loans);

(b) a contingent transfer of funds (such as guarantees);

(c) the forgoing of revenue that is otherwise due;

(d) the provision of goods or services;

(e) the purchase of goods or services.

Question 4

Limb A

Answer 4

Limb A: The financial assistance is given, directly or indirectly, from public resources by a public authority. Public authorities include any entity which exercises functions of a public nature.

Public resources include public funds that are administered by the UK government, the devolved administrations, or
local authorities, whether they are given directly, through other public bodies (such as agencies), or through private bodies.

Question 5

Limb B:

Answer 5

The financial assistance confers an economic advantage on one or
more enterprises. This limb has two components.

First, the recipient of the assistance must be an enterprise, which is any entity (that is, any person, or groups of persons under common control) that is engaged in an economic activity, which means offering goods and services on a market.

If the recipient is engaged in both economic and non-economic activity, it should be considered an enterprise only in relation to its economic activity.

Second, it must confer economic advantage, meaning that the financial
assistance is provided on favourable terms. Financial assistance will not
confer an economic advantage if it could reasonably be considered to have been given on the same terms as it could have been obtained on the market.

This is known as the ‘commercial market operator’ (CMO) principle.

Question 6

Limb C:

Answer 6

The financial assistance is specific, such that it benefits one or more
enterprises over one or more other enterprises with respect to the production of goods or provision of services.

This definition covers financial assistance that is provided directly or indirectly to specific beneficiaries determined on a
discretionary basis by the public authority, as well as assistance that benefits (directly or indirectly) only enterprises in a particular sector, industry, or area, or with certain characteristics.

Question 7

Limb D:

Answer 7

The financial assistance has, or is capable of having, an effect on
competition or investment within the UK, or on trade or investment between the UK and another country or territory, or both. To be a subsidy, financial assistance must be capable of producing a relevant effect, such that it is capable of having a genuine, adverse effect that is more than incidental or hypothetical on competition or investment in the UK, or international trade or investment.

Question 8

Financial assistance which confers an economic advantage (Part 1:3)

Answer 8

(1) This section makes provision about determining whether financial assistance confers an economic advantage on an enterprise for the purposes of section 2(1)(b).

(2) Financial assistance is not to be treated as conferring an economic advantage on an enterprise unless the benefit to the enterprise is provided on terms that are more
favourable to the enterprise than the terms that might reasonably have been expected to have been available on the market to the enterprise.

Question 9

4 Financial assistance which is specific (Part 1:4)

Answer 9

(4) Financial assistance given by a public authority in the form of a tax measure is not to
be regarded as being specific unless—
(a) one or more enterprises obtain a reduction in the tax liability that it or they
would otherwise have borne under the normal taxation regime, and
(b) that enterprise or those enterprises are treated more advantageously than one
or more other enterprises in a comparable position under the normal taxation
regime.

A special purpose levy is not to be regarded as being specific if—
(a) its design is determined by non-economic public policy objectives (such as
the need to limit the negative impacts of certain activities or products on the environment or human health), and

(b) the public policy objectives are not discriminatory.

Question 10

“Public authority” (Part 1: 6)

Answer 10

(1) For the purposes of this Act, “public authority” means a person who exercises
functions of a public nature, but does not include—
(a) either House of Parliament,
(b) the Scottish Parliament,
(c) Senedd Cymru, or
(d) the Northern Ireland Assembly

Question 11

“Enterprise” (Part 1: 7)

Answer 11

(1) In this Act, “enterprise” means (subject to subsections (2) and (3))—
(a) a person who is engaged in an economic activity that entails offering goods or services on a market, to the extent that the person is engaged in such an
activity, or

(b) a group of persons under common ownership or common control which is engaged in an economic activity that entails offering goods or services on a market, to the extent that the group is engaged in such an activity.

(2) For the purposes of this section, an activity is not to be regarded as an economic activity
if or to the extent that it is carried out for a purpose that is not economic.

Question 12

Persons under common control (Part 1: Section 8)

Answer 12

(1) For the purposes of section 7, a group of persons is to be treated as being under
common control if the group—
(a) is a group of interconnected bodies corporate,
(b) consists of bodies corporate of which one and the same person or group of
persons has control, or
(c) consists of one or more bodies corporate and a person who, or a group of
persons which, has control of that or those bodies corporate.

(2) A person or group of persons able, directly or indirectly, to control or materially to
influence the policy of a body corporate as regards carrying on an economic activity
that entails offering goods or services on a market is to be treated as having control of
that body corporate for the purposes of subsection (1)(b) and (c), eve

Question 13

Subsidy schemes (Part 1: 10)

Answer 13

(1) In this Act, “subsidy scheme” means a scheme made by a public authority providing
for the giving of subsidies under the scheme.
(2) A subsidy scheme may be made—
(a) by a public authority that is not a primary public authority only for the giving
of subsidies by that public authority;
(b) by a public authority that is a primary public authority for the giving of
subsidies by other public authorities (in addition to the primary public
authority so far as the scheme may provide).

(3) In subsection (2), “primary public authority” means a public authority of any of the
following descriptions—
(a) a Minister of the Crown;
(b) the Scottish Ministers;
(c) the Welsh Ministers;
(d) a Northern Ireland department;
(e) any other public authority which, in the exercise of its functions, makes a
scheme for the giving of subsidies by other public authorities

11) A subsidy scheme or streamlined subsidy scheme may provide for the value of a
subsidy to be determined by reference to its gross cash amount or the gross cash
equivalent.

Question 14

Streamlined Subsidy schemes (Part 1: 10)

Answer 14

(4) In this Act, “streamlined subsidy scheme” means a subsidy scheme which—
(a) is made by a Minister of the Crown, and
(b) specifies it is made for the purposes of this Act as a streamlined subsidy
scheme.

(5) A streamlined subsidy scheme must be laid before Parliament after it is made.

(6) If a streamlined subsidy scheme is modified after it is laid, the scheme as modified
must also be laid before Parliament.

(7) If, within the 40-day period, either House of Parliament resolves not to approve the
scheme, or the scheme as modified, then, with effect from the end of the day on which the resolution is passed, the scheme, or the scheme as modified, is to be treated as not
having been made.

(10) In calculating the 40-day period, no account is to be taken of any period during which
Parliament is dissolved or prorogued or during which both Houses of Parliament are
adjourned for more than 4 days.

11) A subsidy scheme or streamlined subsidy scheme may provide for the value of a
subsidy to be determined by reference to its gross cash amount or the gross cash
equivalent.

Question 15

Subsidies and schemes of interest or particular interest (Part 1: 11)

Answer 15

(1) In this Act—
(a) “subsidy, or subsidy scheme, of interest”, and
(b) “subsidy, or subsidy scheme, of particular interest”,
have the meanings given in regulations made by the Secretary of State.

(2) Regulations under this section defining “subsidy, or subsidy scheme, of interest” or
“subsidy, or subsidy scheme, of particular interest” may make provision by reference
(among other things) to—
(a) the value of the subsidy or the value of the subsidies given under the subsidy
scheme, and
(b) the sector in which the expected beneficiaries of the subsidy or subsidy
scheme operate, and any characteristics of that sector.

Question 16

Part 2 Chapter 1 Titles

Answer 16

PART 2
SUBSIDY CONTROL REQUIREMENTS

CHAPTER 1
PRINCIPLES

Question 17

12 Application of the subsidy control principles

Answer 17

(1) A public authority—
(a) must consider the subsidy control principles before deciding to give a subsidy,
and

(b) must not give the subsidy unless it is of the view that the subsidy is consistent
with those principles.

(2) In subsection (1) “subsidy” does not include a subsidy given under a subsidy scheme.

(3) A public authority—

(a) must consider the subsidy control principles before making a subsidy scheme,
and

(b) must not make the scheme unless it is of the view that the subsidies provided
for by the scheme will be consistent with those principles.

Question 18

13 Application of the energy and environment principles

Answer 18

(1) A public authority—

(a) must consider the energy and environment principles before deciding to give
a subsidy in relation to energy and environment, and

(b) must not give the subsidy unless it is of the view that the subsidy is consistent
with those principles.

(2) In subsection (1) “subsidy” does not include a subsidy given under a subsidy scheme.

(3) A public authority—
(a) must consider the energy and environment principles before making a subsidy
scheme that provides for the giving of subsidies in relation to energy and
environment, and

(b) must not make the scheme unless it is of the view that the subsidies provided
for by the scheme will be consistent with those principles.

Question 19

Part 2 Chapter 2 Title

Answer 19

CHAPTER 2
PROHIBITIONS AND OTHER REQUIREMENTS

Question 20

15: General prohibitions: Unlimited guarantees

Answer 20

A subsidy in the form of a guarantee of the debts or liabilities of an enterprise is
prohibited by this section if—

(a) there is no limit as to the amount of the debts or liabilities that are guaranteed,
or

(b) there is no limit as to the duration of the guarantee.

Question 21

16 Export performance

Answer 21

(1) A subsidy that is contingent in law or in fact, whether solely or as one of several other
conditions, upon export performance relating to goods or services is prohibited by this
section.

(2) But this section does not prohibit a subsidy in the form of—
(a) short-term export credit insurance against risks that are not marketable risks,
or

(b) an export credit, export credit guarantee or insurance programme that is
permissible in accordance with the SCM Agreement.

(3) In this section—
“export credit insurance” means insurance against commercial or political
risks relating to the payment obligations of public or non-public customers in
export transactions;
“marketable risks” means risks relating to the payment obligations of
public or non-public customers in marketable risk countries;

(4) A marketable risk country is to be treated for the purposes of this section as not being
a marketable risk country if regulations made by the Secretary of State provide for the
marketable risk country to be so treated.

(5) The Secretary of State may make regulations under subsection (4) in respect of a
marketable risk country only if satisfied that there is a lack of sufficient private market
capacity because of—

(a) a significant contraction of private credit insurance capacity,
(b) a significant deterioration of sovereign sector rating, or
(c) a significant deterioration of corporate sector performance.

(6) The Secretary of State must by further regulations under subsection (4) revoke
regulations under that subsection in respect of a marketable risk country if the
Secretary of State ceases to be satisfied as mentioned in subsection (5).

(8) For the purposes of this section, a subsidy is contingent in fact upon export
performance if the giving of the subsidy (without having been made legally contingent
upon export performance) is in fact tied to actual or anticipated exportation or export
earnings.

Question 22

17 Use of domestic goods or services

Answer 22

(1) A subsidy that is contingent, whether solely or as one of several other conditions, upon
the use of domestic over imported goods or services is prohibited by this section.
(2) The prohibition in subsection (1) does not apply so far as relating to subsidies given
in relation to the audiovisual sector.
(3) This section is without prejudice to—
(a) Article 132 of the Trade and Cooperation Agreement (investment
liberalisation: performance requirements), or
(b) Article 133 of that Agreement (investment liberalisation: non-conforming
measures and exceptions).

Question 23

18 Relocation of activities

Answer 23

(1) A subsidy is prohibited by this section if—

(a) it is given to an enterprise subject to a condition that the enterprise relocates
all or part of its existing economic activities, and

(b) the relocation of those activities would not occur but for the giving of the
subsidy.

(2) For the purpose of subsection (1), an enterprise relocates existing activities if—

(a) it is carrying on activities in an area of the United Kingdom before the subsidy
is given, and

(b) it ceases to carry on those activities in that area after the subsidy is given and
instead carries them on in another area of the United Kingdom.

(3) The reference in subsection (1) to economic activities is a reference to any economic
activity that entails offering goods or services on a market.

(4) The prohibition in subsection (1) does not apply if the public authority giving the
subsidy is satisfied that the conditions in subsections (5) to (7) are met.

(5) The condition in thissubsection isthat the effect of the subsidy isto reduce the social or
economic disadvantages of the area that would benefit from the giving of the subsidy.

(6) The condition in this subsection is that the giving of the subsidy results in an
overall reduction in the social or economic disadvantages within the United Kingdom
generally

(7) The condition in this subsection is that the subsidy is designed to bring about a
change in the size, scope or nature of the existing economic activities referred to in
subsection (1)(a).

Question 24

19 Rescuing

Answer 24

(1) A subsidy for rescuing an ailing or insolvent enterprise is prohibited by this section
unless the conditions in subsections (2) to (4) are met.

(2) The condition in this subsection is that the subsidy is given during the preparation by
the enterprise of a restructuring plan for the purposes of section 20(2).

(3) The condition in this subsection is that the subsidy consists of temporary liquidity
support in the form of a loan or loan guarantee.

(4) The condition in this subsection is that the public authority giving the subsidy is
satisfied that—
(a) the subsidy contributes to an objective of public interest by avoiding social
hardship or preventing a severe market failure, in particular with regard to job
losses or disruption of an important service that is difficult to replicate, or
(b) there are exceptional circumstances that justify the subsidy being given
despite its not contributing as mentioned in paragraph (a).

(5) This section does not apply to a subsidy for rescuing an ailing or insolvent enterprise
that is a deposit taker or insurance company.

Question 25

20 Restructuring

Answer 25

(1) A subsidy for restructuring an ailing or insolvent enterprise is prohibited by this section unless the conditions in subsections (2) to (6) are met. (2) The condition in this subsection is that the enterprise has prepared a restructuring plan. (3) The condition in this subsection is that the public authority giving the subsidy is satisfied that the restructuring plan— (a) is credible, (b) is based on realistic assumptions, and (c) is prepared with a view to ensuring the return to long-term viability of the enterprise within a reasonable time period. (4) The condition in this subsection is that— (a) the enterprise is a small or medium-sized enterprise, or (b) the enterprise or its owners, creditors or new investors— (i) have contributed significant funds or assets to the cost of the restructuring, or (ii) have a contractual obligation to do so. (5) The condition in this subsection is that the public authority giving the subsidy is satisfied that— (a) the subsidy contributes to an objective of public interest by avoiding social hardship or preventing a severe market failure, in particular with regard to job losses or disruption of an important service that is difficult to replicate, or (b) there are exceptional circumstances that justify the subsidy being given despite its not contributing as mentioned in paragraph (a). (6) The condition in this subsection is that— (a) a subsidy has not previously been given for restructuring the enterprise, or (b) five years have passed since the last time a subsidy was given for restructuring the enterprise. (7) But a subsidy is not prohibited by reason only of the condition in subsection (6) not being met if the public authority giving the subsidy is satisfied that the circumstances that have given rise to the need for the subsidy were— (a) unforeseeable, and (b) not caused by the beneficiary of the subsidy.

Question 26

21 Restructuring deposit takers or insurance companies

Answer 26

(1) A subsidy for restructuring an ailing or insolvent deposit taker or insurance company is prohibited by this section unless the conditions in subsections (2) to (4) are met. (2) The condition in this subsection is that— (a) the subsidy is given on the basis of a restructuring plan, and (b) the public authority giving the subsidy is satisfied that the restructuring plan— (i) is credible, and (ii) is likely to restore long-term viability. (3) The condition in this subsection is that the beneficiary of the subsidy, its shareholders, its creditors or the business group to which the beneficiary belongs— (a) have contributed significantly to the restructuring costs from their own resources, or (b) have a contractual obligation to do so. (4) The condition in this subsection is that the public authority giving the subsidy has been or reasonably expects to be properly remunerated for the subsidy

Question 27

22 Liquidating deposit takers or insurance companies

Answer 27

(1) A subsidy to an ailing or insolvent deposit taker or insurance company within subsection (2) is prohibited by this section unless the conditions in subsections (3) to (5) are met. (2) A deposit taker or insurance company is within this subsection if it cannot be credibly demonstrated that it is capable of being returned to long-term viability. (3) The condition in this subsection is that the subsidy is given to the deposit taker or insurance company for the purpose of ensuring its orderly liquidation and exit from the market. (4) The condition in this subsection is that the public authority giving the subsidy is satisfied that— (a) the subsidy is limited to what is needed for the purpose mentioned in subsection (3), and (b) the subsidy is limited so as to minimise its negative effect on— (i) competition or investment within the United Kingdom, (ii) trade between the United Kingdom and countries and territories outside the United Kingdom, and (iii) investment as between the United Kingdom and countries and territories outside the United Kingdom. (5) The condition in this subsection is that the beneficiary of the subsidy, its shareholders, its creditors or the business group to which the beneficiary belongs— (a) have contributed significantly to the liquidation costs from their own resources, or (b) have a contractual obligation to do so

Question 28

23 Liquidity provision for deposit takers or insurance companies

Answer 28

(1) A subsidy to support liquidity provision for an ailing or insolvent deposit taker or insurance company is prohibited by this section unless the conditions in subsections (2) to (4) are met. (2) The condition in this subsection is that the subsidy is temporary (3) The condition in this subsection is that it is a condition of the giving of the subsidy that it is not used to absorb losses and does not become capital support. (4) The condition in this subsection is that the public authority giving the subsidy has been or reasonably expects to be properly remunerated for the subsidy

Question 29

24 Meaning of “ailing or insolvent”

Answer 29

(1) For the purposes of sections 19 to 23, a deposit taker, insurance company or other enterprise is “ailing or insolvent” if— (a) it would almost certainly go out of business in the short to medium term without subsidies, (b) it is unable to pay its debts as they fall due, or (c) the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. (2) The Secretary of State may by regulations make provision as to when a deposit taker, insurance company or other enterprise is, or is not, to be regarded as meeting the condition in paragraph (a) of subsection (1). (3) Regulations under subsection (2) are subject to the affirmative procedure.

Question 30

25 Meaning of “deposit taker”

Answer 30

(1) In sections 19 to 24, “deposit taker” means a person who has permission to carry on the regulated activity of accepting deposits under— (a) Part 4A of the Financial Services and Markets Act 2000 (permission to carry on regulated activities), or (b) paragraph 15 of Schedule 3 to that Act (EEA passport rights), as it has effect as a result of section 409 of that Act (Gibraltar). (2) But “deposit taker” does not include a person who has permission to carry on the regulated activity of accepting deposits only for the purposes of, or in the course of, carrying on another regulated activity. (3) In this section “regulated activity” has the meaning given by section 22 of the Financial Services and Markets Act 2000, taken with Schedule 2 to that Act and any order under that section.

Question 31

26 Meaning of “insurance company”

Answer 31

(1) In sections 19 to 24, “insurance company” means a body corporate that has permission to carry on the regulated activity of effecting or carrying out contracts of insurance under— (a) Part 4A of the Financial Services and Markets Act 2000 (permission to carry on regulated activities), or (b) paragraph 15 of Schedule 3 to that Act (EEA passport rights), as it has effect as a result of section 409 of that Act (Gibraltar). (2) But “insurance company” does not include— (a) a registered society within the meaning of the Co-operative and Community Benefit Societies Act (Northern Ireland) 1969 (c. 24 (N.I.)), (b) a friendly society within the meaning of the Friendly Societies Act 1992, (c) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or (d) a member of Lloyd’s that is not a company within the meaning of the Companies Acts (see sections 1(1) and 2(1) of the Companies Act 2006). (3) In this section “regulated activity” has the meaning given by section 22 of the Financial Services and Markets Act 2000, taken with Schedule 2 to that Act and any order under that section.

Question 32

27 Subsidies for insurers that provide export credit insurance

Answer 32

(1) A subsidy to an insurer that provides export credit insurance is prohibited by this section unless the subsidy is given subject to a condition that— (a) any export credit insurance provided by the insurer against marketable risks is provided on a commercial basis, and (b) the subsidy is not used to directly or indirectly benefitso much of the insurer’s business as consists of providing export credit insurance against marketable risks. (2) In this section— “export credit insurance” has the same meaning as in section 16; “insurer” means a person who has permission to carry on the regulated activity of effecting or carrying out contracts of insurance under—

Question 33

28 Subsidies for air carriers for the operation of routes

Answer 33

(1) A subsidy to an air carrier for the operation of a route is prohibited by this section unless the condition in subsection (2), (3) or (4) is met. (2) The condition in this subsection is that operating the route is a public service obligation of the air carrier imposed under— (a) Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the United Kingdom, or (b) Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (as it has effect in EU law). (3) The condition in this subsection is that the public authority giving the subsidy is satisfied that the subsidy will provide benefits for society at large. (4) The condition in this subsection is that— (a) the subsidy is a start-up subsidy for opening a new route to a regional airport, and (b) the public authority giving the subsidy is satisfied that the new route will increase the mobility of citizens and stimulate regional development.

Question 34

29 Services of public economic interest (SPEI)

Answer 34

(1) The requirements in subsections (2) and (3) apply in relation to the giving of a subsidy to a SPEI enterprise for the purpose of the provision of SPEI services. (2) The public authority giving the subsidy must be satisfied that the amount of the subsidy is limited to what is necessary to deliver the SPEI services, having regard to— (a) costs in delivering the SPEI services, and (b) reasonable profits to be made in doing so. (3) The subsidy must be given in a transparent manner. (4) For the purposes of subsection (3), a subsidy is given in a “transparent manner” only if— (a) the subsidy is given in accordance with a written contract or other legally enforceable arrangement in writing, (b) the terms on which the subsidy is given are set out in the contract or arrangement, and (c) the contract or arrangement includes the information in subsection (5) (5) The information is— (a) the SPEI services in respect of which the subsidy is given; (b) the SPEI enterprise that is tasked with providing the SPEI services; (c) the period for which the SPEI services are to be provided (“the delivery period”); (d) the geographic area in which the SPEI services are to be provided; (e) how the amount of subsidy given in respect of the SPEI services is determined; (f) arrangements for the purposes of subsection (6) in respect of reviews and steps that may be taken for recovery. (6) Where a subsidy is given to a SPEI enterprise, the public authority giving the subsidy— (a) must, during the delivery period, keep under regular review the use of the subsidy to ensure that the condition in subsection (2) continues to be met, and (b) must take steps, in accordance with its rights under the contract or arrangement mentioned in subsection (4), to recover a subsidy to the extent that the condition in subsection (2) ceases to be met. (7) For the purposes of the duty in subsection (6)(a), checks must be carried out as to the use of a subsidy— (a) at least once every 3 years beginning with the day when the delivery period begins, and (b) at the end of the delivery period.

Question 35

31 Subsidies or schemes subject to mandatory referral

Answer 35

(1) A subsidy, or subsidy scheme, in respect of which a public authority must request a report from the CMA under section 52(1), is prohibited if— (a) a mandatory referral request has not been submitted in relation to it, (b) a mandatory referral request has been submitted, but the CMA has given a notice under section 53(1)(b) that the request does not comply with the requirements under section 52, (c) a mandatory referral request has been submitted, the CMA report has not been published but the reporting period has not expired, or (d) a mandatory referral request has been submitted, the CMA report has been published but the cooling off period has not expired. (2) References in subsection (1) to publication of the CMA report are references to the report required under section 53 to be published by the CMA in response to a mandatory referral request. (3) In subsection (1)— “cooling off period” has the meaning given by section 54(2); “mandatory referral request” means a request made under section 52; “reporting period” has the meaning given by section 53(3).

Question 36

CHAPTER 3

Answer 36

TRANSPARENCY

Question 37

32 Subsidy database

Answer 37

(1) The Secretary of State must make arrangements for the provision of a database of subsidies and subsidy schemes for the purposes of this Part (“the subsidy database”). (2) The Secretary of State must ensure that— (a) the subsidy database is accessible to the public free of charge, (b) public authorities are able to edit the subsidy database for the purpose of carrying out their duties under section 33, and (c) the subsidy database is kept under review in such manner and at such intervals as the Secretary of State considers appropriate. (3) The Secretary of State may direct the CMA to perform on behalf of the Secretary of State the duties under this section.

Question 38

33 Duty to include information in the subsidy database

Answer 38

(1) A public authority must ensure that an entry in the subsidy database is made in respect of— (a) a subsidy given by the authority (subject to subsection (2)), and (b) a subsidy scheme made by the authority. (2) Subsection (1)(a) does not apply to a subsidy if— (a) it is given under a subsidy scheme, (b) an entry is made in the subsidy database in respect of the scheme, and (c) the amount of the subsidy is no more than £100,000. A public authority must ensure that an entry it makes under this section is maintained on the subsidy database for six years beginning with the date on which the entry is made, or for the duration of the subsidy or scheme if longer. .

Question 39

(5) Where a subsidy or subsidy scheme is modified, the public authority must ensure that the modification is entered in the subsidy database—

Answer 39

(a) within one year of the date of the modification, in respect of a subsidy given in the form of a tax measure, (b) within three months of the date of the modification, in respect of a subsidy scheme made in the form of a tax measure, or (c) within three months of the date of the modification, in respect of a subsidy given, or subsidy scheme made, in any other form.

Question 40

(3) An entry in the subsidy database must be made in respect of a subsidy or scheme—

Answer 40

(a) if given as a subsidy in the form of a tax measure, within one year beginning with the date of the tax declaration, (b) if made as a subsidy scheme in the form of a tax measure, within three months of the confirmation of the decision to make the scheme, or (c) if given or made in any other form, within three months of confirmation of the decision to give the subsidy or make the subsidy scheme.

Question 41

34 Information to be included in the subsidy database

Answer 41

(1) The Secretary of State may by regulations make provision about the information that must be included in a public authority’s entry in the subsidy database in relation to a subsidy or subsidy scheme.

Question 42

(2) The regulations may, in particular, require a public authority’s entry to include—

Answer 42

(a) the power under which the subsidy is given; (b) the policy objective of the subsidy or scheme; (c) the name of the beneficiary to which the subsidy is given; (d) the date the public authority confirms the decision to give the subsidy or make the scheme; (e) the duration of the subsidy or scheme; (f) any time limits or other conditions attached to the use of the subsidy or scheme; (g) the amount of the subsidy or scheme or the amount budgeted for the subsidy or scheme; (h) the location of any of the information mentioned in paragraphs (a) to (g) and subsection (3); (i) the location of any other publicly available information relating to the subsidy or scheme. (3) In relation to subsidy schemes, the regulations may require a public authority’s entry to include— (a) the categories of beneficiary eligible to receive subsidies under the scheme; (b) the terms and conditions for subsidy eligibility; (c) the basis for the calculation of the subsidy including any relevant conditions relating to subsidy ratios.

Question 43

PART 3 TITLE

Answer 43

EXEMPTIONS CHAPTER 1 INTRODUCTORY

Question 44

35 Introductory

Answer 44

(1) This Part provides for cases in which the subsidy control requirements do not apply to the giving of a subsidy. (2) Where the subsidy control requirements do not apply to the giving of a subsidy, those requirements are to be taken as not applying to the making of a subsidy scheme so far as it provides for the giving of such a subsidy.

Question 45

36 Minimal financial assistance

Answer 45

(1) The subsidy control requirements do not apply to minimal financial assistance given to an enterprise if the total amount of minimal or SPEI financial assistance given to the enterprise within the applicable period does not exceed £315,000. (2) The applicable period is the period comprising— (a) the elapsed part of the current financial year, and (b) the two financial years immediately preceding the current financial year. (3) “Minimal financial assistance” means a subsidy given under this section, and for this purpose a subsidy is given under this section if the authority that is giving the subsidy provides to the enterprise that receives it a minimal financial assistance confirmation (see section 37(5)). (4) In subsection (1), the reference to the subsidy control requirements does not include the requirements as to transparency in Chapter 3 of Part 2 except in relation to the giving of a subsidy as minimal financial assistance if the amount of the subsidy is no more than £100,000. (5) For the purposes of this section— (a) if minimal financial assistance is provided in cash, the gross cash amount given is to be used in determining the amount of assistance; (b) if minimal financial assistance is provided otherwise than in cash, the amount of assistance given is to be determined by reference to the gross cash equivalent of the assistance.

Question 46

37 Section 36: procedural requirements

Answer 46

(1) Before giving minimal financial assistance, a public authority must give to the enterprise a minimal financial assistance notification. (2) A “minimal financial assistance notification” means a written statement— (a) explaining that the authority is proposing to give to the enterprise a subsidy by way of minimal financial assistance, (b) specifying the gross value amount of the assistance, and (c) requesting written confirmation from the enterprise that the total amount specified in section 36(1) will not be exceeded by the enterprise receiving the proposed assistance. (3) The public authority may proceed to give the assistance only after it has received the confirmation referred to in subsection (2)(c). (4) On giving the assistance, the public authority must provide to the enterprise a minimal financial assistance confirmation. (5) A “minimal financial assistance confirmation” means a written statement confirming— (a) that the subsidy is given as minimal financial assistance, (b) the date on which it is given, and (c) the gross value amount of the assistance. (6) The enterprise must keep a written record detailing— (a) that it has received a subsidy by way of minimal financial assistance, (b) the date on which it was given, and (c) the gross value amount of the assistance. (7) The record required by subsection (6) must be kept for at least three years beginning with the date mentioned in paragraph (b) of that subsection

Question 47

38 Services of public economic interest assistance

Answer 47

(1) The subsidy control requirements do not apply to SPEI assistance given to an enterprise if the total amount of minimal or SPEI financial assistance given to the enterprise within the applicable period does not exceed £725,000. (2) The applicable period is the period comprising— (a) the elapsed part of the current financial year, and (b) the two financial years immediately preceding the current financial year. (3) “SPEI assistance” means a subsidy given under this section, and for this purpose a subsidy is given under this section if— (a) it is given to a SPEI enterprise for the purposes of the provision of SPEI services, and (b) the authority giving the subsidy provides to the enterprise a SPEI assistance confirmation (see section 39(5)). (4) In subsection (1), the reference to the subsidy control requirements does not include the requirements as to transparency in Chapter 3 of Part 2 except in relation to the giving of a subsidy as SPEI assistance if the amount of the subsidy is no more than £100,000. (5) For the purposes of this section— (a) if SPEI assistance is provided in cash, the gross cash amount given is to be used in determining the amount of assistance; (b) if SPEI assistance is provided otherwise than in cash, the amount of assistance given is to be determined by reference to the gross cash equivalent of the assistance.

Question 48

39 Section 38: procedural requirements

Answer 48

(1) Before giving SPEI assistance, a public authority must give to the enterprise a SPEI assistance notification. (2) A “SPEI assistance notification” means a written statement— (a) explaining that the authority is proposing to give to the enterprise a subsidy by way of SPEI assistance, (b) specifying the gross value amount of the assistance, and (c) requesting written confirmation from the enterprise that the total amount specified in section 38(1) will not be exceeded by the enterprise receiving the proposed assistance. (3) The public authority may proceed to give the assistance only after it has received the confirmation referred to in subsection (2)(c). (4) On giving the assistance, the public authority must provide to the enterprise a SPEI assistance confirmation. (5) A “SPEI assistance confirmation” means a written statement confirming— (a) that the subsidy is given as SPEI assistance, (b) the date on which it is given, and (c) the gross value amount of the assistance. (6) The enterprise must keep a written record detailing— (a) that it has received a subsidy by way of SPEI assistance, (b) the date on which it was given, and (c) the gross value amount of the assistance.

Question 49

40 Mergers and acquisitions

Answer 49

(1) Subsection (2) applies where— (a) all or part of the undertaking, property and liabilities of an enterprise (enterprise A) are transferred to another existing enterprise (enterprise B), and (b) minimal or SPEI financial assistance was given to enterprise A before the transfer. (2) In determining whether a relevant threshold is exceeded in respect of enterprise B— (a) in a case where all of the undertaking, property and liabilities of enterprise A is transferred, any minimal or SPEI financial assistance given to enterprise A before the transfer is to be treated, on and after the transfer, as if given to enterprise B; (b) in a case where only part of the undertaking, property and liabilities of enterprise A is transferred, the proportionate part of the minimal or SPEI financial assistance given to enterprise A before the transfer is to be treated, on and after the transfer, as given to enterprise B. (3) Subsection (4) applies where— (a) all or part of the undertaking, property and liabilities of two or more enterprises (the predecessor enterprises) are transferred to a new enterprise (the successor enterprise), and (b) minimal or SPEI financial assistance was given to one or more of the predecessor enterprises before the transfer. 4) In determining whether a relevant threshold is exceeded in respect of the successor enterprise— (a) in a case where all of the undertaking, property and liabilities of the predecessor enterprises is transferred, any minimal or SPEI financial assistance given to the predecessor enterprises before the transfer is to be treated, on and after the transfer, as if given to the successor enterprise; (b) in a case where only part of the undertaking, property and liabilities of the predecessor enterprises is transferred, the proportionate part of the minimal or SPEI financial assistance given to the predecessor enterprises before the transfer is to be treated, on and after the transfer, as if given to the successor enterprise.

Question 50

40 (5) The “proportionate part” of minimal or SPEI financial assistance is—

Answer 50

(a) such part of the assistance as is fairly attributable to the activities carried on by the part of the undertaking that is transferred, or (b) if it is not reasonably practicable to apply paragraph (a), such part of the assistance that is proportionate to the value of the part of the undertaking that is transferred. (6) Any minimal or SPEI financial assistance that is attributed to enterprise B, or to a successor enterprise, by virtue of this section is to treated as such assistance lawfully given to enterprise B, or the successor enterprise, in accordance with this Chapter. (7) In this section “relevant threshold” means the total amount specified in section 36(1) or (as the case may be) section 38(1).

Question 51

41 Exemption for certain subsidies given to SPEI enterprises

Answer 51

(1) The requirements as to transparency in Chapter 3 of Part 2 do not apply to a subsidy given to a SPEI enterprise for the purpose of the provision of SPEI services, where the subsidy is no more than £100,000. (2) For the purposes of subsection (1)— (a) if assistance is provided in cash, the gross cash amount given is to be used in determining the amount of the assistance; (b) if assistance is provided otherwise than in cash, the amount of assistance given is to be determined by reference to the gross cash equivalent of the assistance.

Question 52

43 Natural disasters and other exceptional circumstances

Answer 52

(1) The subsidy control requirements do not apply to a subsidy given to compensate the damage caused by— (a) natural disasters, or (b) other exceptional occurrences. (2) The reference in subsection (1)(b) to other exceptional occurrences does not include occurrences having only an economic effect. (3) A subsidy may be given in respect of a natural disaster, or another exceptional occurrence, in reliance on the exemption under this section only if— (a) a notice is published by the Secretary of State for the purposes of this section declaring that the exemption applies in respect of that natural disaster or occurrence, and (b) that notice has not been withdrawn by the publication of a further notice. (4) A copy of a notice under this section must be laid before Parliament. (5) In this section, the reference to the subsidy control requirements does not include the requirements as to transparency in Chapter 3 of Part 2.

Question 53

44 National or global economic emergencies

Answer 53

(1) The prohibitions and restrictions imposed by sections 15 to 29 do not apply to a subsidy given to respond to a national or global economic emergency. (2) Subsection (1) applies only if the subsidy is given on a temporary basis. (3) A subsidy may be given in respect of a national or global economic emergency in reliance on the exemption under this section only if— (a) a notice is published by the Secretary of State for the purposes of this section declaring that the exemption applies in respect of that emergency, and (b) that notice has not been withdrawn by the publication of a further notice. (4) A copy of a notice under this section must be laid before Parliament

Question 54

Chapter 4 name

Answer 54

CHAPTER 4 OTHER MISCELLANEOUS EXEMPTIONS

Question 55

45 National security

Answer 55

The subsidy control requirements do not apply to the giving of a subsidy for the purpose of safeguarding national security.

Question 56

46 Bank of England monetary policy

Answer 56

The subsidy control requirements do not apply to the giving of a subsidy by or on behalf of the Bank of England in pursuit of monetary policy.

Question 57

47 Financial stability

Answer 57

(1) The subsidy control requirements do not apply to the giving of a subsidy, or the making of a subsidy scheme, so far as a financial stability direction so provides. (2) “Financial stability direction” means a direction given by the Treasury providing for specified subsidy control requirements not to apply to— (a) the giving of a specified subsidy or making of a specified subsidy scheme, or (b) the giving of subsidies, or the making of subsidy schemes, of a specified description. (3) The Treasury may give a financial stability direction only if it considers it appropriate for prudential reasons, for example— (a) the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier, or (b) ensuring the integrity and stability of the financial system of the United Kingdom. (4) The Treasury must consult the Bank of England before giving a financial stability direction. (5) The Treasury may give a financial stability direction that relates only to a subsidy given, or subsidy scheme made, by the Bank of England only if the Bank of England has requested the Treasury to give the direction. (6) Subject to subsection (7), a financial stability direction must— (a) be published in whatever manner the Treasury considers appropriate, and (b) be laid before Parliament. (7) If the Treasury considersthat the stepsrequired by subsection (6) would have the effect of undermining the purpose for which the direction is given, the Treasury may delay the carrying out of those steps until such time as it is satisfied that to do so would not have that effect. (8) In this section— “financial service supplier” has the meaning given by Article 183 of the Trade and Cooperation Agreement; “specified” means specified in a financial stability direction

Question 58

48 Legacy and withdrawal agreement subsidies

Answer 58

(1) The subsidy control requirements do not apply to the following legacy subsidies and schemes— (a) a subsidy given on or after the day on which this section comes into force, under a subsidy scheme made before that day; F1(b) a subsidy given in accordance with— (i) Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road, (ii) that Regulation as it has effect by virtue of regulation 28(2) of the Public Service Obligations in Transport Regulations 2023, or (iii) the Public Service Obligations in Transport Regulations 2023, (and any such subsidy is to be treated for the purposes of this Act as if it were given in accordance with a subsidy scheme).] (2) In subsection (1), the reference to the subsidy control requirements, so far as it relates to subsection (1)(a), does not include the requirements as to transparency in Chapter 3 of Part 2, except in relation to— (a) subsidies given that are subject to the provisions of Part IV or Annex 2 of the Agreement on Agriculture; (b) subsidies given in relation to trade in fish and fish products; (c) subsidies given in relation to the audiovisual sector. (3) The subsidy control requirements do not apply to the following withdrawal agreement subsidies and schemes— (a) a subsidy given, or a subsidy scheme made, in accordance with Article 10 of the Northern Ireland Protocol; (b) a subsidy or subsidy scheme to which Article 138 of the EU withdrawal agreement applies.

Question 59

49 Tax measures

Answer 59

The subsidy control requirements do not apply to the giving of a subsidy where the giving of the subsidy is permissible by virtue of Article 413 of the Trade and Cooperation Agreement (taxation).

Question 60

50 Large cross-border or international cooperation projects

Answer 60

(1) Section 12(1) does not apply to a subsidy if— (a) it is given in the context of a large cross-border or international cooperation project, and (b) the public authority giving the subsidy is satisfied that the project meets the condition in subsection (3). (2) Section 12(3) does not apply to a subsidy scheme if— (a) the subsidies provided for by the scheme are to be given in the context of a large cross-border or international cooperation project, and (b) the public authority making the scheme is satisfied that the project meets the condition in subsection (3). (3) A project meets the condition in this subsection if— (a) the benefits of the project are not limited to the enterprise or to the sector or the States participating, and (b) the project has wider benefits and relevance through spillover effects that do not exclusively accrue to— (i) the United Kingdom, (ii) the relevant sector, and (iii) the beneficiary of the subsidy or subsidies concerned. (4) The projects that may be regarded as large cross-border or international cooperation projects include— (a) those for transport, energy, the environment or research and development, and (b) first development projects to incentivise the emergence and deployment of new technologies (excluding manufacturing technologies).

Question 61

PART 4 name

Answer 61

CMA: REFERRALS AND FUNCTIONS

Question 62

CHAPTER 1 name

Answer 62

FUNCTIONS ON REFERRALS OF SUBSIDIES AND SCHEMES: Mandatory referrals

Question 63

52 Mandatory referral to CMA

Answer 63

(1) A public authority must request a report from the CMA— (a) before giving a subsidy, or making a subsidy scheme, of particular interest, or (b) where directed to do so by the Secretary of State under section 55. (2) The request must— (a) include the information in relation to the subsidy or subsidy scheme that would be required under section 34, if the subsidy or scheme were to be given or made, (b) provide such other information as is specified in regulations under subsection (3)(a), (c) explain, in the case of a request under subsection (1)(a), why the public authority considers that the subsidy or subsidy scheme would meet the criteria for being a subsidy, or subsidy scheme, of particular interest, (d) include an assessment by the public authority as to whether the subsidy or scheme would comply with the requirements of Chapters 1 and 2 of Part 2, and the reasons for that conclusion, and (e) include any evidence relevant to that assessment. (3) The Secretary of State may by regulations— (a) specify further information that must be included in a request under this section; (b) make provision as to the form of a request under this section. (4) Regulations under subsection (3)(a) and (b) are subject to the negative procedure.

Question 64

53 CMA reporting period for mandatory referral: 1-5

Answer 64

(1) The CMA must, before the end of five working days beginning with the day on which a request is received under section 52(1), give a notice to the public authority— (a) that the request complies with the requirements under section 52, or (b) providing reasons as to why the request does not comply with those requirements. (2) Where the CMA gives a notice under subsection (1)(a), the CMA must— (a) before the end of the reporting period, publish a report on the proposed subsidy or subsidy scheme, in such manner as the CMA considers appropriate, and (b) give a copy of the report to the public authority and the Secretary of State as soon as reasonably practicable after it is published. (3) Subject to subsections (4) and (6), “reporting period” means the period of 30 working days beginning with the day on which the notice under subsection (1)(a) is given to the public authority. (4) The reporting period may be extended if an extension is agreed in writing between the CMA and the public authority before the end of the reporting period. (5) Where the reporting period is extended under subsection (4), the CMA must publish, in such manner as the CMA considers appropriate, a notice stating that the reporting period has been extended and by how much, and the reasons for the extension.

Question 65

53 CMA reporting period for mandatory referral: 6-13

Answer 65

(6) The Secretary of State may direct that the reporting period is extended, in response to a request from the CMA. (7) A request under subsection (6)— (a) may only be made if the CMA considers that there are exceptional circumstances to justify an extension, (b) must include the reasons for seeking an extension, and (c) must be published, with those reasons, in such manner as the CMA considers appropriate. (8) A direction under subsection (6)— (a) may only be given if the Secretary of State is satisfied that there are exceptional circumstances which justify an extension, (b) may not be given in relation to a subsidy or subsidy scheme given or made by the Secretary of State, and (c) may not be given so as to provide for an extension which exceeds 40 working days beginning with the day on which the reporting period would otherwise end. (9) As soon as reasonably practicable after receiving a request under subsection (6), the Secretary of State must— (a) send a copy of a direction given under that subsection to the CMA and to the public authority, or (b) give notice to the CMA and the public authority that the request has been rejected and provide reasons for that decision. (10) Any day falling within the period beginning with the day on which a request is published by the CMA under subsection (7) and ending with the day on which a direction is given under subsection (6), or a notice is given under subsection (9), does not count for the purposes of calculating the reporting period. (11) The Secretary of State must publish, in such manner as the Secretary of State considers appropriate, a direction given under subsection (6) or a notice given under subsection (9). (12) The Secretary of State may by regulations amend the periods of time specified in subsections (1) and (3). (13) Regulations under subsection (12) are subject to the affirmative procedure.

Question 66

54 Cooling off period following mandatory referral

Answer 66

(1) A public authority may not give a subsidy or make a subsidy scheme, in relation to which the CMA has provided a report, before the end of the cooling off period. (2) “Cooling off period” means the period of five working days beginning with the day after the day on which the CMA publishes the report under section 53(2). (3) If the CMA does not publish a report before the end of the reporting period, the public authority may give the subsidy or make the subsidy scheme after the day on which the reporting period expires. (4) The Secretary of State may direct that the cooling off period is extended where the Secretary of State considers that the CMA’s report has identified that there are serious deficiencies in the public authority’s assessment under section 52(2)(d). (5) The Secretary of State— (a) must send a copy of a direction given under subsection (4) to the public authority, and (b) must publish the direction in such manner as the Secretary of State considers appropriate. (6) The power in subsection (4) may not be exercised so as to provide for an extension which exceeds 30 working days beginning with the day on which the cooling off period would otherwise end under subsection (2). (7) The Secretary of State may by regulations— (a) amend the period of time specified in subsection (2); (b) amend subsection (4) to reflect any changes made to the content of the CMA’s report by regulations made under section 59. (8) Regulations under subsection (7)(a) or (b) are subject to the affirmative procedure.

Question 67

55 Call-in direction

Answer 67

(1) The Secretary of State may direct a public authority to request a report from the CMA in relation to a proposed subsidy or subsidy scheme. (2) A direction under this section may be given in relation to— (a) a subsidy or subsidy scheme of interest, or (b) any subsidy or subsidy scheme in respect of which the Secretary of State considers— (i) there is a risk of failure to comply with the requirements of Chapters 1 and 2 of Part 2, or (ii) there is a risk of negative effects on competition or investment within the United Kingdom. (3) The Secretary of State— (a) must send a copy of a direction given under this section to the public authority and to the CMA, and (b) must publish the direction in such manner as the Secretary of State considers appropriate.

Question 68

56 Voluntary referral to CMA

Answer 68

(1) A public authority may request a report from the CMA before giving a subsidy, or making a subsidy scheme, of interest. (2) The request must— (a) include the information in relation to the subsidy or subsidy scheme that would be required under section 34, if the subsidy or scheme were to be given or made, (b) provide such other information as is specified in regulations under subsection (3)(a), (c) explain why the public authority considers that the subsidy or subsidy scheme would meet the criteria for being a subsidy, or subsidy scheme, of interest, (d) include an assessment by the public authority as to whether the subsidy or scheme would comply with the requirements of Chapters 1 and 2 of Part 2, and the reasons for that conclusion, and (e) include any evidence relevant to that assessment. (3) The Secretary of State may by regulations— (a) specify further information that must be included in a request under this section; (b) make provision as to the form of a request under this section. (4) Regulations under subsection (3)(a) and (b) are subject to the negative procedure.

Question 69

57 CMA reporting period for voluntary referral

Answer 69

(1) Where the CMA receives from a public authority a request under section 56(1) that complies with the requirements under section 56(2), the CMA must decide whether to prepare a report in response to the request. (2) The CMA must, before the end of five working days beginning with the day on which a request is received under section 56(1), give notice to the public authority— (a) that a report will be prepared in response to the request, or (b) providing reasons as to why the CMA has decided not to prepare a report. (3) Subject to subsection (4), where the CMA gives a notice under subsection (2)(a), the CMA must— (a) before the end of the reporting period, publish a report on the proposed subsidy or subsidy scheme, in such manner as the CMA considers appropriate, and (b) give a copy of the report to the public authority and the Secretary of State as soon as reasonably practicable after it is published. (4) If the proposed subsidy is given, or scheme is made, before the CMA has prepared or published its report, the CMA may decide whether or not to prepare or publish the report. (5) Subject to subsection (6), “reporting period” means— (a) the period of 30 working days beginning with the day on which the notice under subsection (2)(a) is given to the public authority, or (b) such other period as is agreed in writing between the CMA and the public authority (6) The reporting period may be extended if an extension is agreed in writing between the CMA and the public authority before the end of the reporting period. (7) Where the reporting period is agreed under subsection (5)(b) or extended under subsection (6), the CMA must publish a notice setting out the agreement or extension, and the reasons for it, in such manner as the CMA considers appropriate. (8) The Secretary of State may by regulations amend the periods of time specified in subsections (2) and (5)(a). (9) Regulations under subsection (8) are subject to the affirmative procedure.

Question 70

58 Call-in direction following voluntary referra

Answer 70

(1) This section applies where— (a) the CMA has given a notice under section 57(2)(a) that it will prepare a report in response to a voluntary referral request made in relation to a subsidy or subsidy scheme, and (b) the Secretary of State has given a call-in direction under section 55 in relation to that subsidy or scheme. (2) The voluntary referral request is treated as if it was a mandatory referral request (and sections 53 and 54 apply accordingly) where— (a) the report in response to the voluntary referral request has not been published, and (b) the reporting period for that report has not expired (3) The voluntary referral request is treated as if it was a mandatory referral request (and sections 53 and 54 apply accordingly) where— (a) the report in response to the voluntary referral request has not been published, and (b) the reporting period for that report has expired, but the reporting period under section 53(3) is to be read as a period of 10 working days. (4) Where the report in response to the voluntary referral request has been published, but the subsidy has not been given, or the subsidy scheme has not been made, section 54 applies, and the references in that section to the CMA’s report are to be read as references to the report published in response to the voluntary referral request.

Question 71

59 CMA report following mandatory or voluntary referral

Answer 71

(1) The CMA’s report under section 53 or 57 must include an evaluation of the public authority’s assessment under section 52(2)(d) or 56(2)(d). (2) The evaluation must take into account any effects of the proposed subsidy or scheme on competition or investment within the United Kingdom. (3) The report may also include— (a) advice about how the public authority’s assessment under section 52(2)(d) or 56(2)(d) might be improved, and (b) advice about how the proposed subsidy or scheme may be modified to ensure compliance with the requirements of Chapters 1 and 2 of Part 2. (4) The Secretary of State may by regulations— (a) amend subsection (1), (2) or (3) to make provision about the content of the CMA’s report; (b) make provision as to the form of the report. (5) Regulations under subsection (4)(a) are subject to the affirmative procedure. (6) Regulations under subsection (4)(b) are subject to the negative procedure.

Question 72

60 Post-award referrals

Answer 72

(1) The Secretary of State may refer a subsidy or subsidy scheme to the CMA after the subsidy has been given or the subsidy scheme has been made. (2) A referral under subsection (1) may be made in relation to any subsidy or subsidy scheme in respect of which the Secretary of State considers— (a) that there has or may have been a failure to comply with the requirements of Chapters 1 and 2 of Part 2, or (b) that there is a risk of negative effects on competition or investment within the United Kingdom. (3) The Secretary of State must, at the same time as making a referral under subsection (1), direct the public authority to provide to the CMA— (a) any assessment carried out by the public authority, before the subsidy was given or the scheme was made, as to whether the subsidy or scheme would comply with the requirements of Chapters 1 and 2 of Part 2, and the reasons for that conclusion, (b) any evidence relevant to that assessment, (c) in a case where such an assessment is not provided, the reasons for that, (d) any information that the public authority failed to enter in the subsidy database in accordance with Chapter 3 of Part 2, and (e) such other information as is specified in regulations under subsection (8)(a). (4) Where the Secretary of State decides to make a referral under subsection (1), the referral, together with a direction given under subsection (3), must be made before the end of 20 working days beginning with— (a) the day on which the entry in respect of the subsidy or scheme is entered into the subsidy database, or (b) the day on which the subsidy is given or the scheme is made, in the case of a subsidy or scheme to which section 41 applies. (5) The Secretary of State— (a) must publish a referral made under subsection (1) in such manner as the Secretary of State considers appropriate, and (b) must send a copy of a direction given under subsection (3) to the public authority and the CMA. (6) The public authority must provide to the CMA the information required under subsection (3) before the end of the information period. (7) “Information period” means the period of 20 working days beginning with the day on which the direction is given. (8) The Secretary of State may by regulations— (a) specify further information that must be provided under subsection (3); (b) prescribe the form in which the information required under subsection (3) is to be provided; (c) amend the periods of time specified in subsections (4) and (7). (9) Regulations under subsection (8)(a) or (b) are subject to the negative procedure. (10) Regulations under subsection (8)(c) are subject to the affirmative procedure.

Question 73

61 CMA reporting period for post-award referrals

Answer 73

(1) Where the CMA receives from the Secretary of State a referral under section 60, the CMA must— (a) before the end of the reporting period, publish a report on the subsidy or subsidy scheme to which the referral relates, in such manner as the CMA considers appropriate, and (b) give a copy of the report to the public authority and the Secretary of State as soon as reasonably practicable after it is published. (2) Subject to subsections (3) and (5), “reporting period” means the period of 30 working days beginning with the earlier of— (a) the day on which the information required under section 60(3) is provided to the CMA by the public authority, and (b) the day after the information period in section 60(7) ends. (3) The reporting period may be extended if an extension is agreed in writing between the CMA and the public authority before the end of the reporting period. (4) Where the reporting period is extended under subsection (3), the CMA must publish, in such manner as the CMA considers appropriate, a notice that the reporting period has been extended and by how much, and the reasons for the extension. (5) The Secretary of State may direct that the reporting period is extended, in response to a request from the CMA. (6) A request under subsection (5)— (a) may only be made if the CMA considers that there are exceptional circumstances to justify an extension, (b) must include the reasons for seeking an extension, and (c) must be published, with those reasons, in such manner as the CMA considers appropriate. (7) A direction under subsection (5)— (a) may only be given if the Secretary of State is satisfied that there are exceptional circumstances to justify an extension, (b) may not be given in relation to a subsidy or subsidy scheme given or made by the Secretary of State, and (c) may not be given so as to provide for an extension which exceeds 40 working days beginning with the day on which the reporting period would otherwise end. (8) As soon as reasonably practicable after receiving a request under subsection (5) the Secretary of State must— (a) send a copy of a direction given under subsection (5) to the CMA and to the public authority, or (b) give notice to the CMA and the public authority that the request has been rejected and provide reasons for that decision. (9) Any day falling within the period beginning with the day on which a request is published by the CMA under subsection (6) and ending with the day on which a direction is given under subsection (5), or a notice is given under section (8), does not count for the purposes of calculating the reporting period.

Question 74

62 CMA report following post-award referra

Answer 74

(1) The CMA’sreport undersection 61 must include an evaluation of the public authority’s assessment under section 60(3)(a). (2) The evaluation must take into account any effects of the proposed subsidy or scheme on competition or investment within the United Kingdom. (3) If an assessment was not provided under section 60(3)(a), that fact should be stated in the report, along with any reasons provided under section 60(3)(c). (4) If the subsidy or subsidy scheme is ongoing, the report may also include advice about how the subsidy or scheme may be modified to ensure compliance with the requirements of Chapters 1 and 2 of Part 2. (5) The Secretary of State may by regulations— (a) amend subsection (1), (2), (3) or (4) to make provision about the content of the CMA’s report under section 61; (b) make provision as to the form of that report. (6) Regulations under subsection (5)(a) are subject to the affirmative procedure. (7) Regulations under subsection (5)(b) are subject to the negative procedure.

Question 75

CHAPTER 2 Title

Answer 75

GENERAL FUNCTIONS

Question 76

65 Monitoring and reporting on subsidy control

Answer 76

(1) The CMA must, in relation to each relevant period, undertake a review of— (a) the effectiveness of the operation of this Act, and (b) the impact of the operation of this Act on competition and investment within the United Kingdom. (2) The CMA must prepare a report on the outcome of the review in relation to each relevant period. (3) Subject to subsection (5), “relevant period” means— (a) the period beginning with the commencement date and ending with 31 March in the third year after the year in which the commencement date falls, (b) the following period of three years, and (c) each subsequent period of five years. (4) The Secretary of State may direct the CMA to prepare a report in relation to a specified period. (5) The Secretary of State may exercise the power in subsection (4) only after the CMA has prepared its reports in relation to the first two relevant periods mentioned in subsection (3). (6) Where the CMA prepares a report in relation to a specified period, “relevant period” means— (a) the period beginning with the day after the last day of the specified period and ending with the 31 March in the fifth year after the year in which the day after the last day of the specified period falls, and (b) each subsequent period of five years.

Question 77

66 CMA annual report

Answer 77

The annual report prepared by the CMA under section 25(4) of, and paragraph 14 of Schedule 4 to, the Enterprise and Regulatory Reform Act 2013 must include details of— (a) the subsidies, and subsidy schemes, in respect of which the CMA prepared reports following mandatory referrals under section 52, (b) the subsidies, and subsidy schemes, of interest in respect of which the CMA prepared reports following voluntary referrals under section 56, and (c) the subsidies and subsidy schemes in respect of which the CMA prepared reports following post-award referrals under section 60.

Question 78

CHAPTER 3 title

Answer 78

SUBSIDY ADVICE UNIT

Question 79

68 Subsidy Advice Unit

Answer 79

(1) The CMA must establish a committee of the CMA Board to be known as the Subsidy Advice Unit. (2) The CMA Board may authorise the Subsidy Advice Unit under paragraph 29(1) of Schedule 4 to ERRA 2013 to carry out its subsidy control functions (which are exercisable by the CMA Board on behalf of the CMA under paragraph 28 of that Schedule). (3) A subsidy control function that the Subsidy Advice Unit is authorised to carry out under subsection (2) may, so far as that Unit authorises (whether generally or specifically), be carried out by— (a) a member or sub-committee of that Unit, (b) a member of the CMA Board, or (c) a member of staff of the CMA. (4) The Subsidy Advice Unit may consist only of persons who are members of the CMA or its staff. (5) References in this section to the CMA Board are to the Board constituted under Part 2 of Schedule 4 to ERRA 2013.

Question 80

69 References to subsidy control groups

Answer 80

(1) The Subsidy Advice Unit may make a reference to the CMA chair for the constitution of a CMA group under Schedule 4 to ERRA 2013. (2) A reference under this section must specify— (a) the subsidy control functions in respect of which the reference is made (“the referred functions”), and (b) if the reference is made in respect of a particular subsidy or subsidy scheme, details of that subsidy or subsidy scheme (“the referred case”). (3) A CMA group constituted for the purposes of a reference under this section must carry out, on behalf of the Subsidy Advice Unit, the referred functions. (4) Where the reference is made in relation to a referred case, the reference in subsection (3) to the referred functions is a reference to those functions so far as relating to the referred case.

Question 81

PART 5 title

Answer 81

ENFORCEMENT Appeals to the Competition Appeal Tribunal

Question 82

70 Review of subsidy decisions

Answer 82

1) An interested party who is aggrieved by the making of a subsidy decision may apply to the Competition Appeal Tribunal for a review of the decision. (2) Where an application for a review of a subsidy decision relates to a subsidy given under a subsidy scheme, the application must be made for a review of the decision to make the subsidy scheme (and may not be made in respect of a decision to give a subsidy under that scheme). (3) The means of making an application is by sending the Tribunal a notice of appeal in accordance with Tribunal Procedure Rules. (4) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in Part 5A of the Tribunal Procedure Rules. (5) In determining the application, the Tribunal must apply the same principles as would be applied— (a) in the case of proceedings in England and Wales or Northern Ireland, by the High Court in determining proceedings on judicial review; (b) in the case of proceedings in Scotland, by the Court of Session on an application to the supervisory jurisdiction of that Court. (7) In this Part— “interested party” means— (a) a person whose interests may be affected by the giving of the subsidy or the making of the subsidy scheme in respect of which the application under subsection (1) is made, or (b) the Secretary of State

Question 83

72 CAT powers on review: England and Wales and Northern Ireland

Answer 83

(1) Thissection appliesto applications undersection 70 in England and Wales or Northern Ireland. (2) The Tribunal must either dismiss the application or grant the following kinds of relief— (a) a mandatory order; (b) a prohibiting order; (c) a quashing order; (d) a declaration; (e) an injunction. (3) Where the Tribunal grants relief under subsection (2)(c), it may refer the matter back to the person who made the decision with a direction to reconsider and make a new decision in accordance with its ruling. (4) In making a reference under subsection (3) the Tribunal may not direct the person who made the decision to take any action that the person would not otherwise have the power to take in relation to the decision. (5) Relief under subsection (2) granted by the Tribunal— (a) has the same effect as the corresponding relief granted by the High Court on the determination of proceedings for judicial review, and (b) is enforceable as if it were relief granted by the High Court on an application for judicial review. 6) In deciding whether to grant relief under subsection (2) the Tribunal must apply the principles that the High Court would apply in deciding whether to grant that relief on an application for judicial review. (7) Where the Tribunal grants relief under subsection (2), it may also make a recovery order in accordance with section 74. (8) The Tribunal may refuse to grant any relief sought on an application if the Tribunal considers— (a) that there has been undue delay in making the application, or (b) that granting the relief sought on the application would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.

Question 84

74 Recovery orders

Answer 84

(1) The Tribunal may make a recovery order if— (a) in exercise of its powers under section 72 or 73, it grants relief in respect of a decision of a public authority to give a subsidy or make a subsidy scheme, and (b) in granting that relief the Tribunal finds that the decision did not comply with a requirement of Chapter 1 or 2 of Part 2. (2) A recovery order is an order that— (a) confers a right on a public authority that has given a subsidy to recover the amount of that subsidy from the beneficiary, and (b) requires the public authority to exercise that right in accordance with the order. (3) A recovery order may— (a) provide for how the right to recover a subsidy under the order is to be exercised; (b) require that the right is exercised by such time as the order may specify; (c) relate to the whole of a subsidy or to such part as the order may provide; (d) where made in relation to subsidies given under a subsidy scheme, relate to all such subsidies or only to those subsidies specified in the order; (e) require the payment of interest in accordance with the order. (4) A recovery order is enforceable as though it were an order made by the High Court or, in relation to Scotland, the Court of Session.

Question 85

75 Appeals against decisions of the CAT

Answer 85

(1) An appeal lies to the appellate court on any point of law arising from a decision of the Tribunal under the preceding provisions of this Part. (2) An appeal under this section may be brought by— (a) a party to the proceedings before the Tribunal, or (b) any other person who has a sufficient interest in the matter. (3) An appeal under this section requires the permission of the Tribunal or the appellate court.

Question 86

76 Duty to provide pre-action information

Answer 86

(1) An interested party may make a request to a public authority for information about a subsidy, or subsidy scheme, that the authority has given or made. (2) A request under subsection (1)— (a) must be made in writing, and (b) must state that it is being made only for the purpose of deciding whether to apply for a review of a subsidy decision under section 70, on the ground that the decision did not comply with a requirement of Chapter 1 or 2 of Part 2. (3) Where a public authority receives a request under subsection (1), the authority must provide such information as would enable, or assist in, the making of a determination as to whether the subsidy was given, or the scheme was made, in accordance with the requirements of Chapters 1 and 2 of Part 2. (4) The information must be provided by the public authority— (a) in writing, and (b) within 28 days of receiving the request for information. (5) In providing information, a public authority may impose such restrictions as it considers proportionate in order to protect— (a) commercially sensitive information, (b) confidential information, (c) information subject to legal privilege, or (d) information, the disclosure of which would be contrary to the public interest.

Question 87

77 Misuse of subsidies

Answer 87

(1) A public authority which has given a subsidy has the right to recover from the beneficiary the whole or part of its amount to the extent that the subsidy is used for a purpose other than the purpose for which it was given. (2) The right conferred by subsection (1) is enforceable as if created by contract between the public authority and the beneficiary. (3) Nothing in this section affects any other remedy that the public authority may have in connection with the giving of the subsidy.