NI Practical Guide to the Green Book

• Introduction
• The Basic Steps of an Economic Appraisal
• What is Economic Appraisal and When is it required?
• Step by Step Appraisal Guidance
• Policy and Programme Appraisal
• Appraising Assistance to the Private, Voluntary and Community Sectors
• PPP Projects and Procurement Issues
• Appraising Information Technology Projects
• Appraisal of Accommodation Projects
• Business Cases
• Approval of Departmental Expenditure
• Implementation, Management and Monitoring
• Evaluation
• Expert Advice, Use of Consultants and Training
• Terminology and Abbreviations
• Appendices

State Aid Identification Checklist

State aid rules apply to organisations involved in economic activity ('undertakings'). The organisation does not have to be profit-making if the activity carried out is one which has commercial competitors. In some instances, public and voluntary sector organisations, such as universities and charities, could be classified as undertakings, as can the State itself.

There are 5 questions you need to consider in order to establish whether a measure constitutes state aid. Only if you answer 'yes' to all 5 questions is state aid involved. If you answer 'no' to one or more of the following, the funding is not state aid and therefore the state aid rules do not apply.

1. Is the measure granted by the state or through state resources? As well as central government departments, this includes regional or local authorities and other public or private sector bodies designated or controlled by the state. State resources include tax exemptions and also funds not permanently belonging to the state but under state control, e.g. lottery funding.
2. Does it confer an advantage? A benefit to an undertaking, granted for free or on favourable (non-commercial) terms, could be state aid. This includes the direct transfer of resources, such as grants and soft loans, and also indirect assistance - for example, relief from charges that an undertaking normally has to bear, such as a tax exemption or the provision of services at a favourable rate.
3. Is it selective, favouring certain undertakings? A general measure affecting the whole of the state's economy (eg nation-wide fiscal measures) is not considered a state aid, while aid that targets particular businesses, locations, types of firm (eg SMEs) or sectors is.
4. Is the activity tradable between member states? The Commission's interpretation of this is broad - it is sufficient that a product or service is subject to trade between member states, even if the aid beneficiary itself does not export to the EU. Consequently most activities are viewed as tradable.
5. Does the measure distort or have the potential to distort competition? If it strengthens the position of the beneficiary relative to other competitors then there will probably be state aid implications. The distortion of competition does not have to be substantial or significant, and includes small amounts of aid and firms with little market share. Most interventions have the potential to distort competition.