European Union: COVID-19 Key EU Developments, Policy & Regulatory Update No. 82

COMPETITION & STATE AID

State Aid

European Commission approves first scheme under State aid Temporary Crisis Framework in context of Russia's invasion of Ukraine (see here)

On 7 April 2022, the Commission approved a French scheme providing up to €155 billion in liquidity support for companies across all sectors (excluding certain companies active in the financial sector) in the context of Russia's invasion of Ukraine.

The is the first scheme approved under the State aid Temporary Crisis Framework for State Aid measures, adopted by the Commission on 23 March 2022, which sets out the criteria for Member States to support businesses in the context of Russia's invasion of Ukraine and its serious disruption to the EU economy (see Jones Day COVID-19 Update No. 80 of 25 March 2022).

In adopting this Crisis Framework, the Commission noted that the conflict had significantly impacted the energy market, and steep rises in energy prices had affected various economic sectors, including some of those particularly affected by the COVID-19 pandemic, such as transport and tourism. The conflict also disrupted supply chains for both EU imports from Ukraine (notably, cereals and vegetable oils) and EU exports to Ukraine.

The approved French measure will be financed based on a portion of the €300 billion budget initially allocated by France under three French schemes to support the economy in the context of the COVID-19 pandemic, which the Commission initially approved on 21 March 2020 (see here) under the COVID-19 Temporary Framework (see Jones Day COVID-19 Update No. 68 of 22 November 2021)

In approving the French scheme, the Commission found that it is responds to the conditions set out in the Temporary Crisis Framework, e.g., (i) maturity of the loans cannot exceed six years; (ii) annual interest rates on the loans respect the minimum levels under the Temporary Crisis Framework; and (iii) guarantees will be granted by 31 December 2022 at the latest.

The Temporary Crisis Framework, applicable since 1 February 2022, will be in place until 31 December 2022. During its period of application, the Commission will keep the Framework under review in light of developments regarding the energy markets, other input markets, and the general economic situation. Prior to the Crisis Framework's end date, and in view of maintaining legal certainty, the Commission will assess whether it should be prolonged.

European Commission approves new and amended Member State measures to support the economy (see here and here)

Since the onset of the coronavirus outbreak, the Commission has adopted a significant number of State aid measures under Article 107(2)b, Article 107(3)b and under the Temporary Framework.

The Temporary Framework, adopted in March 2020, is currently applicable until 30 June 2022.

• €18 million Belgian scheme to further support tourist accommodation sector in the Brussels-Capital Region in the context of the coronavirus pandemic.
• €175 million French aid scheme aimed at supporting pig farms in the context of the coronavirus pandemic.
• €73 million Bulgarian scheme to support farmers affected by the coronavirus pandemic.
• €800,000 Portuguese scheme to further support the passenger transport sector in Azores in the context of the coronavirus pandemic.
• Re-introduction of two Estonian measures, expired on 31 December 2021, to support companies affected by the coronavirus pandemic ((i) loan guarantee and subsidized loan measure and (ii) aid scheme in form of public guarantees, loans and subsidized interest rates for loans, open to companies active in all sectors) until 30 June 2022, including an overall budget allocation of €50 million for both measures.

TRADE / EXPORT CONTROLS

European Commission holds first meeting of EU Energy Purchase Platform (see here)

On 7 April 2022, the European Commission held the first meeting of the EU Energy Purchase Platform, a voluntary coordination mechanism to secure the supply of gas, LNG (Liquefied Natural Gas), and hydrogen.

This Platform follows the European Council's conclusions of 24 - 25 March 2022 that Member States and the Commission shall "urgently" work together on voluntary common energy purchases. As earlier stated by the Commission, such collective purchases would be inspired by experience from the COVID-19 pandemic, where EU wide action was viewed as crucial to ensuring adequate supplies of vaccines (see also Jones Day COVID-19 Update No. 80 of 25 March 2022).

In announcing the Platform, Kadri Simson, European Commissioner for Energy, further observed: "The Russian aggression against Ukraine has radically changed the geopolitical context of Europe's energy security. We have decided to end our dependence on Russian fossil fuels and need to partly replace them with alternative sources of supply...".*

The Commission aims to operate the Platform in view of all aspects of the value chain, global supply and demand, market mechanisms, infrastructure and security of supply. This will occur where EU-level coordination is more effective than at the national level, such as in these areas:

• Demand pooling: The Platform will work with Member States to leverage the common EU market to attract reliable supplies at stable prices from global markets, towards enabling joint purchases when appropriate.
• Efficient use of EU gas infrastructure: The Platform will coordinate actions to maximize LNG imports absorption, comply with gas storage obligations, and ensure security of gas supply, as well as identify infrastructure needs that would respond to future hydrogen use.
• International outreach: The Platform will strengthen the EU's international outreach to gas partners and markets, including the main LNG exporting and importing countries, in view of building arrangements for diversification, including towards hydrogen. This work will take into consideration partners' supply capacities, long-term contracts, and both existing/planned interconnections and storage infrastructure in the EU.

The Commission will also create a consultative working group of industry experts to provide market insights and expertise on the gas supply chain. The working group will serve an advisory role and function in compliance with EU antitrust rules, with robust safeguards against conflict of interests.

* Following Russia's invasion of Ukraine, European energy companies face unprecedented uncertainty, and the potential reduction or cessation of Russian gas imports would invariably impact all market segments in Continental Europe. For a discussion on such impact on European gas markets and potential legal arguments in response to continued contractual performance if imports are reduced or stopped, see the Jones Day White Paper on The War in Ukraine: Downstream Ripple Effects on the European Gas Market, May 2022.

Commission publishes update on export of COVID-19 vaccines from EU (see here)

On 11 April 2022, the European Commission published an update on the export of COVID-19 vaccines from the EU, reflecting information gathered from the Commission's new vaccine monitoring mechanism, applicable since 1 January 2022 (see Jones Day COVID-19 Update No. 69 of 29 November 2021). The monitoring mechanism seeks to ensure the ongoing transparency of exports, in particular, by providing the Commission with timely, companyspecific vaccine export data.

To recall, this monitoring mechanism replaced the COVID-19 vaccines export transparency and authorization mechanism (expired on 31 December 2021), which required the authorization of exports from companies with whom the EU had concluded Advance Purchased Agreements (APAs). Without authorization, such products could not be exported outside the EU.

Since November 2020, the EU reports that it has exported 2,170,661,352 vaccine doses (in final form) to 167 countries (up from 2,053,072,783 doses as reported on 11 March 2022). The largest export destinations are once again Japan, the UK, and the US.

The Commission indicates that it will pursue ongoing monitoring of the epidemiological situation in view of taking appropriate measures as necessary.

MEDICINES AND MEDICAL DEVICES

EMA publishes update on safety of COVID-19 vaccines (see here)

On 13 April 2022, the European Medicines Agency (EMA) published a new safety update for vaccines granted with marketing authorization in the European Union.

The safety update reflects the assessments of emerging worldwide safety data on the vaccines, as principally undertaken by the EMA's Pharmacovigilance Risk Assessment Committee (PRAC) and most lately following its meetings held on 4-7 April 2022.

PRAC's findings, in particular, indicated that no updates to the product information are currently recommended for any of the authorized COVID-19 vaccines.

The safety update further noted that EMA is coordinating observational studies in EU Member States assessing data from clinical practice to monitor the safety and effectiveness of COVID-19 vaccines, including in pregnant women.