Sweden: New Swedish Rules Regarding State Aid

Last Updated: 21 November 2013
Article by Johan Karlsson, Martin Johansson, Pär Remnelid and Björn Nicolai

A new Act concerning the application of the EU State aid rules in Sweden enters into force on 1 July.

The new Swedish Act governs the obligations of both providers and beneficiaries of State aid. The legislation primarily codifies the case law of the EU Court of Justice, but there are also new provisions that regulate, among other things, how unlawful aid shall be recovered in Sweden.

In parallel, the European Commission has presented a proposal concerning the modernisation of the rules governing its handling of State aid matters. It is foreseen that the new procedural rules will enter into force sometime during the second half of this year.

In addition to the mainly practical requirements which are primarily imposed on providers of State aid, the new regulatory framework has the effect of putting the spotlight on the State aid rules and their application. It is therefore advisable for companies to review their potential exposure to unlawful State aid. This applies not least in conjunction with M&A transactions.

The new rules
The practical effects of the new rules are, among other things, that:

  • Providers of aid must inform the Government about the introduction of and changes to aid measures. They will also be under a legal obligation to commence judicial proceedings in order to ensure recovery of unlawful aid.
  • It will be more difficult in practice for beneficiaries of aid to avoid the recovery of unlawful aid since it is made clear that the duty to reimburse cannot be deviated from. It is for example irrelevant whether a binding civil law agreement has been concluded or whether the aid has been received in good faith.
  • Third parties are also directly affected by the rules since both the Swedish Government and the European Commission will be entitled to demand information directly from companies, irrespective of whether they are suspected of being beneficiaries of unlawful aid or competitors of such beneficiaries.

Many are affected
The rules affect a significant number of undertakings, for example State and municipal companies/private equity funds which give or receive aid, companies which receive or have received unlawful aid as well as companies which are considering acquiring or selling such companies. The rules are of course also of interest for those who take the view that one of their competitors has received unlawful aid.

What can Vinge help with?
Vinge's EU, Competition & Regulatory practice group assists clients in respect of all aspects of the application of the State aid rules. We assist and advice in in connection with notifications of State aid to the European Commission as well as in connection with the Commission's investigations of suspected unlawful aid. The group also assists and advice clients regarding the lodging of complaints to the European Commission concerning suspected unlawful aid granted to competitors. The group further assists clients with State aid assessments in conjunction with M&A transactions.

Legal news, 31 May 2013

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