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The Handbook of EEA Law pp 575–603Cite as

State Aid

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Abstract

This chapter outlines the interpretation and application of EEA State aid law by ESA and the EFTA Court. With their respective case-law, both institutions have contributed significantly to the development of this important competition law discipline. Bearing in mind that EEA State aid law is closely modelled on the corresponding EU law, both ESA and the EFTA Court have applied and interpreted the EEA State aid provisions in the light of the Commission’s practice and the case-law of the ECJ. With such an alignment to the developments in the EU, ESA and the EFTA Court have ensured that the State aid provisions of the EEA are homogenously applied and interpreted, in order to create a level playing field for economic operators in the EEA.

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Notes

  1. 1.

    Norberg et al. (1993), p. 554; Blanchet et al. (1994), pp. 229 et seq.

  2. 2.

    Unless the aid is de minimis or otherwise block-exempted.

  3. 3.

    The State Aid Guidelines are described in more detail infra in Sect. 2.2.2.

  4. 4.

    ESA Decision No. 390/09/COL of 7 October 2009 on the establishment of Mesta AS (Norway). The ECJ developed the effects-based test in 1974 in Case 173/73 Italy v. Commission [1974] ECR 709.

  5. 5.

    ESA Decision No. 106/95/COL of 31 October 1995 on a tax exemption for glass packaging from a basic tax on non-reusable beverage packaging (Norway); ESA Decision No. 148/04/COL of 30 June 2004 regarding environmental tax measures (Norway). ESA Decision No. 148/04/COL was challenged before the EFTA Court, see Joined Cases E-5/04, 6/04 and 7/04 Fesil and others v. ESA [2005] EFTA Ct. Rep. 117.

  6. 6.

    ESA Decision No. 165/98/COL of 2 July 1998 with regard to State aid in the form of regionally differentiated social security taxation (Norway). This decision was challenged before the EFTA Court and on the ‘effects-based test’ the Court supported ESA: Case E-6/98 Norway v. ESA [1999] EFTA Ct. Rep. 76, paragraphs 34 and 36. See also ESA Decision No. 228/99/COL of 22 September 1999 on the measures that the Norwegian Government intends to take in order to comply with the EFTA Surveillance Authority’s decision of 2 July 1998 with regard to State aid in the form of regionally differentiated social security taxation (Norway).

  7. 7.

    Case C-206/06 Essent Netwerk Noord [2008] ECR I-5497.

  8. 8.

    These indicators were established in Case C-482/99 France v. Commission (Stardust) [2002] ECR I-4397. ESA applied these indicators, inter alia, to Landsvirkjun, with the result that the measure at stake was not imputable to the Icelandic State in ESA Decision No. 787/08/COL of 17 December 2008 regarding the Danice project (Iceland). However, a different result with regard to Landsvirkjun was reached in ESA Decision No. 392/11/COL of 14 December 2011 on the power contract between Landsvirkjun and Íslenska kísilfélagið ehf (Iceland).

  9. 9.

    Case E-1/13 Míla ehf. v. ESA [2014] EFTA Ct. Rep. 4, paragraph 95.

  10. 10.

    ESA Decision No. 227/06/COL of 19 July 2006 with regard to State aid in favour of Farice (Iceland).

  11. 11.

    ESA denied the pari passu concept for example in ESA Decision No. 181/05/COL of 15 July 2005 regarding a notification of a new risk capital scheme: nationwide seed capital investment companies (Norway).

  12. 12.

    See, for example, ESA Decision No. 379/00/COL of 18 December 2000 on the Norwegian State’s involvement with the Information Technology Centre at Fornebu (Norway); ESA Decision No. 787/08/COL of 17 December 2008 regarding the Danice project (Iceland). Bearing in mind that ESA has to respect in its assessment both the principle of impartiality with regard to the system of property ownership (Article 125 EEA) and the principle of equality between public and private undertakings .

  13. 13.

    ESA Decision No. 142/00/COL of 26 July 2000 on the closure of a case initiated on the basis of a complaint concerning alleged State aid to certain enterprises through the contract conditions for electricity (‘Kraftkontrakter på myndighetsbestemte vilkår’) (Norway); ESA Decision No. 392/11/COL of 14 December 2011 on the power contract between Landsvirkjun and Íslenska kísilfélagið ehf (Iceland).

  14. 14.

    ESA Decision No. 236/02/COL of 4 December 2002 to propose appropriate measures to Norway with regard to State aid in the form of guarantees under the Act on State Enterprises (‘Lov om statsforetak’) (Norway); ESA Decision No. 60/03/COL of 9 April 2003 to amend the ESA’s Decision of 4 December 2002 to propose appropriate measures to Norway with regard to State aid in the form of guarantees under the Act on State Enterprises (‘Lov om statsforetak’) (Norway); ESA Decision No. 177/05/COL of 15 July 2005 to amend the Authority’s decision of 15 December 2004 to propose appropriate measures to the Principality of Liechtenstein regarding a State guarantee in favour of Liechtensteinische Landesbank (Liechtenstein).

  15. 15.

    ESA Decision No. 56/11/COL of 2 March 2011 on the guarantee scheme for the purchase of electric power on long term contracts (Norway).

  16. 16.

    On prudent market investor behaviour and the timing when a sale should be assessed, as well as on the interpretation of the methods of selling public land and buildings at market price, see Case E-12/11 Asker Brygge AS v. ESA [2012] EFTA Ct. Rep. 536 and Case E-9/12 Iceland v. ESA [2013] EFTA Ct. Rep. 454. With regard to tender procedure requirements to reflect market price, see Case E-1/13 Míla ehf. v. ESA, cited above, paragraphs 98–104.

  17. 17.

    ESA Decision No. 55/05/COL of 11 March 2005 to close the formal investigation procedure provided for in Article 1(2) in Part I of Protocol 3 to the Surveillance and Court Agreement with regard to the sale of 1744 rental apartments in Oslo (Norway). See also ESA Decision No. 170/05/COL of 29 June 2005 on sales of publicly owned properties—University Library Building and part of adjacent property in Oslo (Norway).

  18. 18.

    Case C-280/00 Altmark Trans GmbH [2003] ECR I-7747. On the Altmark Trans conditions see also Joined Cases E-10/11 and E-11/11 Hurtigruten and Norway v. ESA [2012] EFTA Ct. Rep. 758, paragraphs 85–201. In that EFTA Court ruling reference is made to Case T-289/03 BUPA and Others v. Commission [2008] ECR II-81, which calls for a flexible application of the Altmark Trans conditions.

  19. 19.

    ESA Decision No. 537/09/COL of 16 December 2009 to initiate the procedure provided for in Article 1(2) in Part I of Protocol 3 to the Surveillance and Court Agreement with regard to the financing of the fitness centre at the Kippermoen Leisure Centre (Norway); ESA Decision No. 254/10/COL of 21 June 2010 AS Oslo on AS Oslo Sporveier and AS Sporveisbussene (Norway); ESA Decision No. 205/11/COL of 29 June 2011 on the Supplementary Agreement on the Hurtigruten service (Norway); ESA Decision No. 460/13/COL of 20 November 201 to propose appropriate measures with regard to state aid granted to publicly owned hospital pharmacies in Norway (Norway).

  20. 20.

    On 18 July 2007, ESA adopted a controversial decision concerning the Norwegian Road Administration Møre and Romsdal District Office (No. 349/07/COL), when it concluded that: ‘If activities are confined to being exercised by a state integrated entity ‘in-house’ that is, in this case, for the state administration or other public bodies, the activities in question are never exercised on a market in competition with other market players. In such circumstances the activities cannot be classified as economic activities and the entity is not an undertaking.’ The fact that a particular service is provided in-house has no relevance for the economic nature of the activity. See Opinion of Advocate General Geelhoed in Case C-295/05 Asociación Nacional de Empresas Forestales (Asemfo) [2007] ECR I-2999, paragraphs 110–116. See in this context also the EFTA Court’s judgment on in-house insurance services (captives) in Joined Cases E-4/10, E-6/10 and E-7/10 Liechtenstein, Reassur AG and Swisscom RE AG v. ESA [2011] EFTA Ct. Rep. 16, paragraphs 53–60.

  21. 21.

    For example, an airport operator can, in principle, qualify as an undertaking: ESA Decision No. 192/09/COL of 22 April 2009 on investments in infrastructure at Skien—Geiteryggen Airport (Norway).

  22. 22.

    ESA Decision No. 177/97/COL of 9 July 1997 concerning alleged infringement of the competition and State aid provisions of the EEA Agreement owing to the framework conditions for the Norwegian State Housing Bank (Norway). The decision was challenged before the EFTA Court: see Case E-4/97 The Norwegian Bankers’ Association v. ESA [1999] EFTA Ct. Rep. 1. See also ESA Decision No. 121/00/COL of 28 June 2000 concerning alleged infringement of the competition and State aid provisions of the EEA Agreement owing to the framework conditions for the Norwegian State Housing Bank (Norway).

  23. 23.

    ESA Decision No. 39/07/COL of 27 February 2007 on public financing of municipal day-care institutions (Norway). This view was supported by the EFTA Court in Case E-5/07 Private Barnehagers Landsforbund v. ESA [2008] EFTA Ct. Rep. 62. In that judgment, the Court clarified that ‘… the fact that an activity can be offered by private operators as an economic activity does not preclude the possibility that it can be offered also by the State as a non-economic activity’ (paragraph 28). See also Case E-1/12 Den norske Forleggerforening v. ESA [2012] EFTA Ct. Rep. 1040.

  24. 24.

    ESA Decision No. 44/11/COL of 15 February 2011 on Private Investment Structures (Liechtenstein).

  25. 25.

    This follows the view of the General Court and Court of Justice in the Leipzig/Halle case. Joined Cases T-443/08 Freistaat Sachsen, Flughafen Leipzig/Halle et al v. Commission [2011] ECR II-1311; upheld on appeal, see Case C-288/11 P Mitteldeutsche Flughafen AG and Flughafen Leipzig-Halle GmbH v. Commission [2012] ECR I-(not yet reported).

  26. 26.

    ESA Decision No. 496/13/COL of 11 December 2013 concerning the financing of Harpa Concert Hall and Conference Centre (Iceland).

  27. 27.

    ESA Decision No. 342/09/COL of 23 July 2009 on an exemption from the Norwegian CO2 tax on gas and LPG on the use of gas for purposes other than the heating of buildings (Norway); ESA Decision No. 97/10/COL of 24 March 2010 regarding the taxation of captive insurance companies under the Liechtenstein Tax Act (Liechtenstein). See, for example, also Joined Cases E-4/10, E-6/10 and E-7/10 Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 74; Joined Cases E-17/10 and E-6/11 Liechtenstein and VTM Fundmanagement v. ESA [2012] EFTA Ct. Rep. 114, paragraph 55.

  28. 28.

    ESA Decision No. 480/12/COL of 12 December 2012 on Article 55 of the Liechtenstein tax act (Liechtenstein).

  29. 29.

    ESA Decision No. 21/04/COL of 25 February 2004 with regard to International Trading Companies (Iceland). See also Case E-2/05 ESA v. Iceland [2005] EFTA Ct. Rep. 202.

  30. 30.

    ESA Decision No. 149/02/COL of 26 July 2002 regarding environmental tax measures (Norway).

  31. 31.

    ESA Decision No. 90/02/COL of 31 May 2002 on the notifications of a proposal for amended depreciation rules of the petroleum tax act for production equipment and pipelines for gas linked to new large-scale liquefied natural gas (LNG) facilities located in Finnmark county or the municipalities of Kåfjord, Skjervøy, Nordreisa or Kvænangen in Troms county and the application of these rules to the Snøhvit project (Norway); ESA Decision No. 140/03/COL of 16 July 2003 on a compensation scheme for Express Bus Operators (Norway); ESA Decision No. 318/05/COL of 14 December 2005 to close the formal investigation procedure provided for in Article 1(2) in Part I of Protocol 3 to the Surveillance and Court Agreement with regard to the exemptions from document duties and registration fees in connection with the establishment of Entra Eiendom AS (Norway).

  32. 32.

    ESA Decision No. 291/03/COL of 18 December 2003 regarding the establishment of private day-care facilities on public sites with subsidised real estate leasehold fees in Oslo (Norway); ESA Decision No. 39/07/COL of 27 February 2007 on public financing of municipal day-care institutions (Norway); ESA Decision No. 459/12/COL of 5 December 2012 on the aid to Bømlabadet Bygg AS for the construction of the Bømlabadet aquapark in the Municipality of Bømlo (Norway).

  33. 33.

    The State Aid Guidelines will be explained in more detail infra in Sect. 2.2.2.

  34. 34.

    For example social aid to consumers (Article 61(2)(a) EEA) or aid to make good the damage caused by natural disasters or exceptional occurrences (Article 61(2)(b) EEA).

  35. 35.

    ESA Decision No. 32/02/COL of 20 February 2002 concerning support to film production and film related activities (Norway); ESA Decision No. 169/02/COL of 18 September 2002 regarding public support for film production companies (Norway); ESA Decision No. 186/03/COL of 29 October 2003 on proposed support measures to audiovisual production (Norway); ESA Decision No. 342/06/COL of 14 November 2006 on the support schemes to audiovisual production, film related activities and film production companies (Norway); ESA Decision No. 496/13/COL of 11 December 2013 concerning the financing of Harpa Concert Hall and Conference Centre (Iceland).

  36. 36.

    ESA Decision No. 59/00/COL of 15 March 2000 on State aid to Miljøbil Grenland AS (Norway).

  37. 37.

    ESA Decision No. 503/08/COL of 16 July 2008 on Test Centre Mongstad (Norway); ESA Decision No. 27/09/COL of 29 January 2009 on the carbon capture and storage project at Kårstø (Norway); ESA Decision No. 91/12/COL of 15 March 2012 on Aid for the Development Phase of the Mongstad CCS Facility (Norway).

  38. 38.

    ESA Decision No. 329/09/COL of 15 July 2009 on the Norwegian scheme on support for alternative, renewable heating and electricity savings in private households (Norway).

  39. 39.

    Supra Sect. 2.1.2.

  40. 40.

    ESA Decision No. 417/01/COL of 19 December 2001 on compensation for maritime transport services under the ‘Hurtigruten Agreement’ (Norway); ESA Decision No. 214/04/COL of 11 August 2004 to initiate the formal investigation procedure with regard to the intended prolongation of the Hurtigruten agreements (Norway); ESA Decision No. 215/06/COL of 28 June 2006 on compensation to the Hurtigruten companies for social security contributions (Norway); ESA Decision No. 205/11/COL of 29 June 2011 on the Supplementary Agreement on the Hurtigruten service (Norway). Decision No. 205/11/COL was challenged before the EFTA Court in Joined Cases E-10/11 and E-11/11 Hurtigruten and Norway v. ESA, cited above. The Court upheld ESA’s decision.

  41. 41.

    ESA Decision No. 280/01/COL of 19 September 2001 regarding compensation granted to Widerøe’s Flyveselskap ASA for the temporary operation of air transport services on the route between Oslo and Fagernes (Norway).

  42. 42.

    For example ESA Decision No. 260/12/COL of 4 July 2012 on Skien Airport (Norway).

  43. 43.

    ESA Decision No. 121/00/COL of 28 June 2000 concerning alleged infringement of the competition and State aid provisions of the EEA Agreement owing to the framework conditions for the Norwegian State Housing Bank (Norway). See also ESA Decision No. 213/04/COL of 11 August 2004 regarding the Icelandic Housing Financing Fund and an increase of lending up to 90 % of purchase price by the Icelandic Housing Financing Fund (Iceland). However, this decision was subsequently annulled in Case E-9/04 The Bankers’ and Securities’ Dealers Association of Iceland v. ESA [2006] EFTA Ct. Rep. 42. In relation to the Icelandic Housing Financing Fund see also ESA Decision No. 405/08/COL of 27 June 2008 to close the formal investigation procedure with regard to the Icelandic Housing Financing Fund (Iceland); ESA Decision No. 406/08/COL of 27 June 2008 to initiate the formal investigation procedure with regard to the relief of the Icelandic Housing Financing Fund from payment of a state guarantee premium (Iceland); ESA Decision No. 364/11/COL of 23 November 2011 to close the formal investigation procedure concerning the relief of the Icelandic Housing Financing Fund Íbúðalánasjóður (HFF) from payment of a state guarantee premium (Iceland); ESA Decision No. 247/11/COL of 18 July 2011 on a proposal for appropriate measures in the financing of the Icelandic Housing Financing Fund Íbúðalánasjóður (HFF) (Iceland).

  44. 44.

    ESA Decision No. 267/10/COL of 1 July 2010 on a State aid scheme for railway sidings and freight terminals (Norway).

  45. 45.

    Annex XV EEA contains for example: Commission Directive No. 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings (OJ 2006 L 318, page 17); Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on the application of [ex] Articles 87 and 88 of the Treaty [now Articles 107 and 108 TFEU] to de minimis aid (OJ 2006 L 379, page 5); Commission Decision No. 2012/21/EU of 20 December 2011 on the application of Article 106(2) TFEU to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (OJ 2012 L 7, page 3); and Commission Regulation (EC) No. 800/2008 of 6 August 2008 declaring certain categories of aid compatible with the common market in application of [ex] Articles 87 and 88 of the Treaty [now Articles 107 and 108 TFEU] (General Block Exemption Regulation) (OJ 2008 L 214, page 3).

  46. 46.

    General Note No. II in Annex XV EEA.

  47. 47.

    Procedural and Substantive Rules in the Field of State Aid. Adopted and issued by the Authority on 19 January 1994 (OJ 1994 L 231, page 1; EEA Supplement No. 32, 3.9.1999, page 1). The State Aid Guidelines are constantly updated and can be obtained via ESA’s website: http://www.eftasurv.int/state-aid/legal-framework/state-aid-guidelines/.

  48. 48.

    As to the binding nature of these Guidelines upon ESA see Joined Cases E-5/04, E-6/04 and E-7/04 Fesil and others v. ESA, cited above, paragraph 107 and Case E-9/12 Iceland v. ESA, cited above, paragraph 57.

  49. 49.

    ESA Decision No. 174/98/COL of 8 July 1998 on public involvement in agreements concerning the construction and operation of an aluminium smelter at Grundartangi (Iceland); ESA Decision No. 40/03/COL of 14 March 2003 on proposed financing and tax measures concerning the construction of an aluminium plant in the township of Fjarðabyggð (Iceland).

  50. 50.

    ESA Decision No. 180/05/COL of 15 July 2005 regarding a notification of a new risk capital scheme: regional seed capital investment scheme for assisted areas (Norway); ESA Decision No. 181/05/COL of 15 July 2005 regarding a notification of a new risk capital scheme: nationwide seed capital investment companies (Norway).

  51. 51.

    ESA Decision No. 192/09/COL of 22 April 2009 on investments in infrastructure at Skien—Geiteryggen Airport (Norway); ESA Decision No. 96/11/COL of 29 March 2011 on investment aid to Notodden airport, Tuven (Norway).

  52. 52.

    ESA Decision No. 231/11/COL of 13 July 2011 on the rapid deployment of a Next Generation Access network in rural areas of the municipality of Tromsø (Norway).

  53. 53.

    ESA Decision No. 302/05/COL of 30 November 2005 on a notified scheme for research and development concerning gas technologies with improved environmental performance (‘Gassnova’) (Norway); ESA Decision No. 216/06/COL of 5 July 2006 on research, development and innovation in the maritime industry (Norway); ESA Decision No. 127/07/COL of 18 April 2007 to close the formal investigation procedure regarding R&D aid granted by the Research Council of Norway in connection with the development of the software programme Turborouter (Norway); ESA Decision No. 76/08/COL of 13 February 2008 Decision to not raise objections to the Norwegian Space Centre support scheme (Norway).

  54. 54.

    ESA Decision No. 331/99/COL of 16 December 1999 on a financial contribution to Radio Liechtenstein (Liechtenstein).

  55. 55.

    ESA Decision No. 660/07/COL of 12 December 2007 to authorise State aid granted to Hurtigruten for increased social security costs in 2004 (Norway); ESA Decision No. 356/08/COL of 11 June 2008 on the tax refund scheme for seafarers aboard passenger vessels in the Norwegian Ordinary Shipping Register (NOR) (Norway); ESA Decision No. 455/08/COL of 9 July 2008 to authorise a change to the Norwegian tax refund scheme for seafarers (Norway).

  56. 56.

    ESA Decision No. 69/11/COL of 16 March 2011 on rescue aid to the Icelandic Housing Financing Fund (Íbúðalánasjódur) (Iceland); ESA Decision No. 291/12/COL of 11 July 2012 on restructuring aid to Arion Bank (Iceland); ESA Decision No. 290/12/COL of 11 July 2012 on restructuring aid to Landsbankinn (Iceland); ESA Decision No. 244/12/COL of 27 June 2012 on restructuring aid granted to Íslandsbanki (Iceland); ESA Decision No. 539/13/COL of 18 December 2013 on restructuring aid to Nordfjordur Savings Bank (Iceland).

  57. 57.

    The ‘extra cost methodology’ establishes that eligible costs are the difference between the investment costs of a renewable energy production plant and the investment costs of a conventional power plant.

  58. 58.

    ESA Decision No. 125/06/COL of 3 May 2006 regarding the Norwegian Energy Fund (Norway).

  59. 59.

    The SCA was published in: OJ 1994 L 344, page 1. The Agreement is available on the website of the EFTA Secretariat: www.efta.int.

  60. 60.

    Further information on ESA can be obtained from ESA’s website: www.eftasurv.int.

  61. 61.

    For the area of State aid, Article 62(1)(b) EEA specifies that ESA is entrusted with the powers and functions laid down in Protocol 26 EEA. Article 24(1) SCA is drafted in a similar way to Protocol 26 EEA, specifying not only the general State aid provisions in Article 61 EEA, but also provisions related to specific fields, including Article 49 EEA (transport sector) and Protocol 14 EEA (ECSC steel industry).

  62. 62.

    The definition of ‘existing aid’ is provided in Article 1(b) in Part II of Protocol 3 SCA.

  63. 63.

    ESA Decision No. 148/04/COL of 30 June 2004 regarding environmental tax measures (Norway). ESA Decision No. 148/04/COL was challenged before the EFTA Court in Joined Cases E-5/04, 6/04 and 7/04 Fesil and others v. ESA, cited above.

  64. 64.

    The definition of ‘new aid’ is provided in Article 1(c) in Part II of Protocol 3 SCA.

  65. 65.

    The definition of ‘unlawful aid’ is provided in Article 1(f) in Part II of Protocol 3 SCA. See also Article 14 in Part II of Protocol 3 SCA.

  66. 66.

    ESA Decision No. 318/05/COL of 14 December 2005 to close the formal investigationprocedure provided for in Article 1(2) in Part I of Protocol 3 to the Surveillance and Court Agreement with regard to the exemptions from document duties and registration fees in connection with the establishment of Entra Eiendom AS (Norway).

  67. 67.

    ESA Decision No. 97/10/COL of 24 March 2010 regarding the taxation of captive insurance companies under the Liechtenstein Tax Act (Liechtenstein).

  68. 68.

    Council Regulation (EC) No. 659/1999 of 22 March 1999 laying down detailed rules for the application of [ex] Article 93 [now Article 108 TFEU] of the EC Treaty (OJ 1999 L 83, page 1). Council Regulation (EC) No. 659/1999 was recently amended by Council Regulation (EU) No. 734/2013 (OJ 2013 L 204, page 15).

  69. 69.

    Agreement between the EFTA States of 10 December 2001, amending Protocol 3 to the Surveillance and Court Agreement.

  70. 70.

    This ESA Decision reflects Commission Regulation (EC) No. 794/2004 (OJ 2004 L 140, page 1).

  71. 71.

    DG COMP stands for the Commission’s Directorate General for Competition.

  72. 72.

    Case E-2/94 Scottish Salmon Growers Association Limited v. ESA [1994–1995] EFTA Ct. Rep. 59. This judgment triggered ESA Decision No. 195/96/COL of 30 October 1996 concerning alleged State aid to the Norwegian salmon industry (Norway).

  73. 73.

    ESA Decision No. 195/96/COL of 30 October 1996 concerning alleged State aid to the Norwegian salmon industry (Norway); ESA Decision No. 176/05/COL of 15 July 2005 regarding alleged State aid to the fisheries sector (Norway); ESA Decision No. 729/08/COL of 26 November 2008 on alleged State aid given to the fishing company H. Østervold AS through the sale of land (Norway). Similar Gjems-Onstad (2000), p. 73. But compare Stefánsson (1996), p. 7 (21–23), who argues that ESA is competent in this area.

  74. 74.

    Buschle (2006), pp. 757 et seq.

  75. 75.

    This contribution covers EFTA Court rulings until 31 January 2014.

  76. 76.

    Case E-2/94 Scottish Salmon Growers v. ESA, cited above.

  77. 77.

    Case E-2/05 ESA v. Iceland, cited above.

  78. 78.

    Case E-1/00 State Debt Management Agency v. ĺslandsbanki-FBA hf. [2000–2001] EFTA Ct. Rep. 8, paragraph 37, in which the EFTA Court confirmed that national courts have no jurisdiction to decide on the compatibility of State aid.

  79. 79.

    Notably Article 6 EEA and Article 3(2) SCA.

  80. 80.

    See Article 25(2) and (3) RoP. See also Case E-12/11 Asker Brygge AS v. ESA [2012] EFTA Ct. Rep. 536; Joined Cases E-10/11 and E-11/11, Hurtigruten and Norway v. ESA, cited above, paragraphs 68–84; Case E-1/12 Den norske Forleggerforening v. ESA, cited above.

  81. 81.

    Article 36(2) SCA.

  82. 82.

    Case C-225/91 Matra v. Commission [1993] ECR I-3202; Case C-328/82 Intermills v. Commission [1984] ECR I-3809 and Case C-198/91 Cook v. Commission [1993] ECR I-2487.

  83. 83.

    Case E-4/97 Norwegian Bankers’ Association v. ESA, cited above, paragraph 30.

  84. 84.

    For example, with regard to a plea that ESA failed to initiate the formal investigation procedure .

  85. 85.

    Case E-2/02 Technologien Bau- und Wirtschaftsberatung GmbH and Bellona Foundation v. ESA [2003] EFTA Ct. Rep. 52, paragraphs 53 and 60.

  86. 86.

    Case E-5/07 Private Barnehagers Landsforbund v. ESA, cited above, paragraph 50; Case E-6/09 Magasin- og Ukepresseforeningen v. ESA [2009–2010] EFTA Ct. Rep. 144, paragraph 45; Case E-1/13 Míla ehf. v. ESA, cited above, paragraph 55.

  87. 87.

    Case E-2/94 Scottish Salmon Growers v. ESA, cited above, paragraph 22; Case E-4/97 Norwegian Bankers’ Association v. ESA, cited above, paragraphs 30–35; Joined Cases E-5/04, E-6/04 and E-7/04 Fesil and others v. ESA, cited above, paragraphs 60; Case E-9/04 The Bankers’ and Securities’ Dealers Association of Iceland v. ESA, cited above, paragraph 52; Case E-1/12 Den norske Forleggerforening v. ESA, cited above.

  88. 88.

    Case 60/81 IBM v. Commission [1981] ECR 2369, paragraph 9.

  89. 89.

    Case E-2/94 Scottish Salmon Growers v. ESA, cited above, paragraph 17.

  90. 90.

    Husbanken is a State institution and forms part of the Norwegian housing policy. The role of Husbanken is to provide loans or loan guarantees in return for security in developed property and to channel support from central and local government to housing constructions and other housing projects. To this end, Husbanken provides, inter alia, loans with low interests to individuals for housing purposes.

  91. 91.

    Article 59(3) EEA reads: ‘The EC Commission as well as the EFTA Surveillance Authority shall ensure within their respective competence the application of the provisions of this Article and shall, where necessary, address appropriate measures to the States falling within their respective territory.’

  92. 92.

    Case E-4/97 The Norwegian Bankers’ Association v. ESA, cited above, paragraph 26. This was later repeated in connection with the assessment of locus standi, Case E-2/02 TBW and Bellona v. ESA [2003] EFTA Ct. Rep. 52, paragraph 45.

  93. 93.

    In line with Article 40 SCA and Article 80 of the Rules of Procedure of the EFTA Court.

  94. 94.

    Joined Cases C-239/96 R and C-240/96 R United Kingdom v. Commission [1996] ECR I-4475.

  95. 95.

    Order in Case E-6/98R The Government of Norway v. ESA [1998] EFTA Ct. Rep. 242.

  96. 96.

    Case E-2/94 Scottish Salmon Growers v. ESA, cited above, paragraphs 25 and 26; Case E-6/98 Norway v. ESA, cited above, paragraph 68; Joined Cases E-5/04, E-6/04 and E-7/04 Fesil and others v. ESA, cited above, paragraph 97; Joined Cases E-4/10, E-6/10 and E-7/10 Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, paragraph 171.

  97. 97.

    Case E-14/10 Konkurrenten.no AS v. ESA (‘Konkurrenten I’) [2011] EFTA Ct. Rep. 266.

  98. 98.

    Case E-4/97 Norwegian Bankers’ Association v. ESA, cited above, paragraphs 67–70.

  99. 99.

    Case E-14/10 Konkurrenten I, cited above, paragraphs 58–60.

  100. 100.

    Case E-14/10, Konkurrenten I, cited above, paragraph 89. This case also triggered a dispute over the legal costs (taxation of costs) Case E-14/10 Costs [2012] EFTA Ct. Rep. 900.

  101. 101.

    Case E-6/98 Norway v. ESA, cited above, paragraphs 56 and 57.

  102. 102.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA, cited above, paragraph 93.

  103. 103.

    Case 248/84 Germany v. Commission [1987] ECR 4013.

  104. 104.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA, cited above, paragraph 93.

  105. 105.

    Joined Cases C-278/92, C-279/92 and C-280/92 Spain v. Commission [1994] ECR I-4103; Case 730/79 Philip Morris v. Commission [1980] ECR 2671; Case 102/87 France v. Commission [1988] ECR 4067.

  106. 106.

    Case E-6/98, Norway v. ESA, cited above, paragraph 59.

  107. 107.

    Case E-4/97 Husbanken II, cited above, paragraph 62; Case E-9/04, supra, paragraph 80.

  108. 108.

    Depending on the employees’ place of residence.

  109. 109.

    Case E-6/98 Norway v. ESA, cited above, paragraphs 37–39.

  110. 110.

    Case E-6/98, Norway v. ESA, cited above, paragraph 39.

  111. 111.

    Joined Cases E-4/10, E-6/10 and E-7/10 Liechtenstein, Reassur AG and Swisscom RE AG vESA, cited above, paragraph 72.

  112. 112.

    Case C-143/99 Adria-Wien Pipeline [2001] ECR I-8365.

  113. 113.

    Joined Cases E-5/04, E-6/04 and E-7/04 Fesil and others v. EESA cited above, paragraph 84.

  114. 114.

    Joined Cases E-17/10 and E-6/11 Liechtenstein and VTM Fundmanagement ESA, cited above, paragraph 74.

  115. 115.

    Case C-179/90 Merci Convenzionali Porto di Genova [1991] ECR I-5889 and Case C-266/96 Corsica Ferries France SA and others [1998] ECR I-3949.

  116. 116.

    Case E-4/97 The Norwegian Bankers’ Association v. ESA, cited above, paragraph 47.

  117. 117.

    Case C-202/88 France v. Commission [1991] ECR I-1223 and Case C-159/94 Commission v. France [1997] ECR I-5815.

  118. 118.

    Case E-4/97 Husbanken II, cited above, paragraph 47.

  119. 119.

    Case E-4/97 Husbanken II, cited above, paragraphs 48 and 49.

  120. 120.

    Case E-9/04, supra, paragraphs 77–79.

  121. 121.

    Consequently, ESA’s decision was annulled. The ‘HFF case’ subsequently triggered two cases on the dispute of legal fees (taxation of costs): Case E-9/04 Costs [2007] EFTA Ct. Rep. 74 and Case E-9/04 Costs II [2007] EFTA Ct. Rep. 220.

  122. 122.

    Article 4(4) in Part II of Protocol 3 SCA.

  123. 123.

    Case E-4/97 Husbanken II, cited above, paragraphs 32, 35 and 36.

  124. 124.

    Case E-9/04, The Bankers’ and Securities’ Dealers Association of Iceland v. ESA, cited above, paragraphs 61–64; Case E-1/12, supra, paragraph 106.

  125. 125.

    Case E-14/10, Konkurrenten I, cited above, paragraph 78. As to ESA obligation to issue an information injunction, in accordance with Article 10(3) of Part II of Protocol 3 SCA, to collect more necessary information, see Case E-12/11 Asker Brygge AS v. ESA [2012] EFTA Ct. Rep. 536, paragraphs 85–93.

  126. 126.

    Case E-9/04, supra, paragraphs 66–83; Case E-1/12, Den norske Forleggerforening v. ESA, cited above, paragraphs 106–134.

  127. 127.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA, cited above, paragraph 135.

  128. 128.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA, cited above, paragraphs 157 et seq.

  129. 129.

    Joined Cases E-4/10, E-6/10 and E-7/10, Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 122.

  130. 130.

    Joined Case E-17/10 and E-6/11, Liechtenstein and VTM Fundmanagement v. ESA, cited above, paragraph 95. In that case the EFTA Court also addressed the effect of the 10-year limitation period in Article 15 in Part II of Protocol 3 SCA.

  131. 131.

    Case E-14/10 Konkurrenten I, cited above, paragraph 76. In this context, the EFTA Court referred to Case C-400/99 Italy v. Commission [2005] ECR I-3657, paragraphs 65–66.

  132. 132.

    Article 1(2), subparagraph 2, in Part I of Protocol 3 SCA states: ‘If the EFTA State concerned does not comply with [an ESA decision to abolish or alter the aid] within the prescribed time, the EFTA Surveillance Authority or any other interested EFTA State may, in derogation from Articles 31 and 32 of this Agreement, refer the matter to the EFTA Court directly’. This provision corresponds to Article 108(2), subparagraph 2, TFEU.

  133. 133.

    At the time, de minimis aid was defined as not exceeding €100,000 over a period of 3 years.

  134. 134.

    Case E-2/05 ESA v. Iceland, cited above, paragraphs 17 and 20.

  135. 135.

    Case E-2/05, ESA v. Iceland, cited above paragraph 21, referring to Case 15/85 Consorzio Cooperative d’Abruzzo v. Commission [1987] ECR 1005; Case C-137/92 P BASF and others [1994] ECR I-2555.

  136. 136.

    Here, the Court held that excessive length of procedure may indeed render a decision unlawful, Case E-2/05, supra, paragraph 22.

  137. 137.

    Case E-2/05, ESA v. Iceland, cited above, paragraphs 22–25.

  138. 138.

    Case E-2/05, ESA v. Iceland, cited above, paragraphs 31 and 34.

  139. 139.

    See, inter alia, Case C-52/84 Commission v. Belgium [1986] ECR 89, paragraph 14.

  140. 140.

    Case E-2/05, ESA v. Iceland, cited above, paragraphs 39 and 40.

  141. 141.

    Case C-350/93 Commission v. Italy [1995] ECR I-699; Case C-75/97 Maribel [1999] ECR I-3671.

  142. 142.

    Joined Cases E-4/10, E-6/10 and E-7/10, Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 141.

  143. 143.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA, cited above, paragraph 152; Joined Cases E-4/10, E-6/10 and E-7/10, supra, paragraph 142.

  144. 144.

    Joined Cases E-5/04, E-6/04 and E-7/04, Fesil and others v. ESA cited above, paragraph 178.

  145. 145.

    Joined Cases E-4/10, E-6/10 and E-7/10, Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 142.

  146. 146.

    Joined Cases E-4/10, E-6/10 and E-7/10, Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 143.

  147. 147.

    Joined Cases E-4/10, E-6/10 and E-7/10, Liechtenstein, Reassur AG and Swisscom RE AG v. ESA, cited above, paragraph 149.

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  1. the Legal and Executive Affairs Department of ESA, Brussels, Belgium

    Michael Sánchez Rydelski (Former Deputy Director)

  2. Rechtsanwalt/Attorney-at-law, Brussels, Belgium/Hamburg, Germany

    Michael Sánchez Rydelski (Former Deputy Director)

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    Carl Baudenbacher

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Rydelski, M.S. (2016). State Aid. In: Baudenbacher, C. (eds) The Handbook of EEA Law. Springer, Cham. https://doi.org/10.1007/978-3-319-24343-6_27

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