This regular alert covers key regulatory EU developments related to the COVID-19 situation. It does not purport to provide an exhaustive overview of developments and contains no analysis or opinion.
LATEST KEY DEVELOPMENTS
- Council of the European Union approves the Netherlands' recovery and resilience plan
- European Commission approves €292.5 million Italian measure to support construction of plant in semiconductor value chain
- European Commission announces Member State consultation on proposal to prolong and amend Ukraine Temporary Crisis Framework
- European Commission approves further schemes under Ukraine Temporary Crisis Framework
Trade / Export Controls
- European Commission publishes 2nd Annual Report on Implementation and Enforcement of EU Trade Agreements
Medicines and Medical Devices
- Council of the European Union approves the Digital Services Act
- EDPB's Coordinated Supervision Committee publishes 2020-2022 Report of Activities
- Council of the European Union approves conclusions on ICT supply chain security
- European Commission adopts equivalence decision for Brazilian COVID digital certificates
COMPETITION & STATE AID
Council of the European Union approves the Netherlands' recovery and resilience plan (see here)
On 4 October 2022, the Council adopted its Implementing Decision for the Netherlands' €4.7 billion recovery plan, following the Commission's positive assessment of the plan on 8 September 2022.
The Netherlands was the final Member State to submit a recovery plan, as earlier indicated in the Commission's first Report on implementation of the Recovery and Resilience Facility (RRF) in March 2022 (see Jones Day COVID-19 Update No. 78 of 4 March 2022).
To recall, Member State recovery plans set out the reforms and public investment projects foreseen for implementation with the support of the RRF, the key component of NextGenerationEU, the EU's historic recovery fund.
In evaluating Member State plans under the RRF Regulation, notably, the RRF guidelines make clear that the investment projects included in Member State recovery plans must comply with State aid rules (Jones Day Commentary, EU Member State COVID-19 Recovery Plans Must Comply with State Aid Rules, March 2021, see here).
The Commission's appraisal of Member State plans will also, in particular, determine whether the plans dedicate at least 37% of expenditure to investments and reforms that pursue climate objectives and 20% to the digital transition.
Following the Council's approval of the Netherlands' recovery plan, the Commission will authorize disbursements to the Netherlands based on the satisfactory fulfilment of the milestones and targets outlined in its plan, reflecting progress on the implementation of the investments and reforms (see below for recent RRF disbursement for Italy).
The Commission's approval remains pending for 1 Member State plan (Hungary (€7.2 billion) (see here).
With respect to Hungary, to recall, the Commission launched a "conditionality mechanism of the rule of law procedure" against Hungary in April 2022. On 18 September 2022 (see here), it proposed budget protection measures to the Council under the EU's conditionality regulation. The Commission has proposed: (i) a suspension of 65% of the commitments for three operational programs under cohesion policy, and (ii) a prohibition to enter into legal commitments with the public interest trusts for programs implemented in direct and indirect management. Additional risks for the Hungarian economy would be the result of a failure to approve Hungary's national recovery plan for the disbursement of approx. EUR 7 billion in NextGenerationEU grants.
The Recovery and Resilience Scoreboard provides an overview of how implementation of the RRF and national plans is progressing (see here).
European Commission approves €292.5 million Italian measure to support construction of plant in semiconductor value chain (see here)
On 5 October 2022, the Commission announced the approval, under EU State aid rules, of a €292.5 million Italian measure made available through the Recovery and Resilience Facility (RRF, see above for further details) to support STMicroelectronics in building a plant in the semiconductor value chain in Catania, Sicily.
The €292.5 million direct grant will support STMicroelectronics' €730 million investment to construct a Silicon Carbide (SiC) wafer plant. SiC is a material used to manufacture wafers serving as a base for specific microchips used in high-performance power devices, e.g., electric vehicles, fast-charging stations, and renewable energies.
According to the Commission, the Italian measure will reinforce Europe's security of supply, resilience, and digital sovereignty in semiconductor technologies, in line with the European Chips Act Communication's objectives (see Jones Day COVID-19 Update No. 76 of 9 February 2022; and Jones Day Commentary, EU Chips Act: The EU's Push for Semiconductor Autonomy, March 2022).
To recall, the Commission has previously contended that the COVID-19 crisis exposed vulnerabilities in certain sectors in Europe due to high dependency on an allegedly narrow range of non-EU suppliers, especially for raw materials. The Commission believes that this is particularly the case for EU industries confronted by semiconductor shortages and the emergence of fake semiconductor chips on the market that compromise the security of electronic devices and systems
Under the Italian measure, STMicroelectronics shall (i) satisfy EU priority rated orders in case of a supply shortage, (ii) invest in developing next generation microchips, and (iii) continue contributing to reinforcing the European semiconductor ecosystem.
European Commission announces Member State consultation on proposal to prolong and amend Ukraine Temporary Crisis Framework (see here)
On 6 October 2022, Executive Vice-President and Competition Commissioner Margrethe Vestager announced the Commission's launch of a Member State consultation on a draft proposal to prolong and amend the Ukraine State aid Temporary Crisis Framework, in view of the "heavy toll" of Russia's war against Ukraine and the consequent "severe energy crisis that is affecting households and businesses all over Europe."
To recall, in adopting this Crisis Framework on 23 March 2022, the Commission noted that Russia's war against Ukraine 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 Crisis Framework was first amended on 20 July 2022, in particular, to broaden its scope to include additional types of aid measures, which may be granted until 30 June 2023.
The Commission is now consulting Member States on potential amendments to the Crisis Framework, such as:
- Extending the Temporary Crisis Framework;
- Proportionately increasing maximum aid ceilings in the provisions on limited amounts of aid, which allow Member States to provide direct grants or other forms of aid to companies in any sector affected by the crisis;
- In view of high market volatility, using a targeted adjustment to further facilitate access to liquidity support to energy companies in view of covering the financial collaterals for their trading activities; and
- Simplifying the criteria enabling Member States to support businesses impacted by high energy prices, including energyintensive users, ensuring that support remains targeted and proportionate while maintaining incentives for reducing energy demand.
Commissioner Vestager noted that the draft proposal already reflected Member State responses to a survey launched mid-September 2022 and that the Commission would continue its close cooperation with Member States in the revision process.
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