It may be that third parties outside the project partnership receive State aid through the project partners’ activities. This can happen regardless of whether the partner is receiving State aid from the Programme or not. This is because undertakings not included as project partners in the project partnership (e.g. associated organisations, target groups, etc.) could receive an advantage through the project’s activities that they would not otherwise have received under normal market conditions.
Examples are:
Consultancy or other subsidised services provided to SMEs
Training courses provided to SMEs
Access to research facilities for companies
When preparing the full application each applicant must consider whether its activities will give rise to State aid to third parties. In such a case, each applicant has to ensure compliance with the State aid rules. The following chapters describe how project partners can identify aid to third parties and which measures they can take to comply with the State aid rules.
P.4.1 How to identify State aid to third parties?
The project partner has to answer the following questions to establish whether it provides aid to a third party:
1. Identification of “undertaking” and “economic activity”
In order for State aid to be present, the recipient must be an undertaking. Accordingly, as a first step the project partner has to look at the nature of the third party’s activity within the project, and check whether this is an economic activity.
If the activity is considered as “economic”, the third party will have to be considered as an “undertaking”.
For any economic activity, the project partner has to take the next step below. If the project partner decides that the third party does not carry out economic activities, it can conclude that there is no State aid and does not have to take the steps outlined below.
2. Identification of State aid relevant activities
As a second step, the project partner has to answer whether its support for economic activity constitutes a selective advantage. This means, that the partner assesses whether its support provides a benefit that the third party would not gain under ‘normal market conditions’. Furthermore, it assesses whether the third party is relieved of any costs that it would normally have to bear. If the project partner deduces that it does not provide a selective advantage or benefit to the third party, then it can conclude that there is no State aid.
Where the activity is economic and the support constitutes an advantage, the project partner can conclude that its support to the third party is likely to be State aid relevant. The project partner has to take the following steps to make it compliant with the State aid rules.
P.4.2 How to ensure compliance with State aid rules?
1. Calculation of the value of the aid
A partner that provides State aid to third parties has to calculate the value of the supportive activities. There are two ways of calculating it:
Market price.
The project partner determines the amount on the basis of market prices for benefits comparable to those given through the project (e.g. services, training, consultancy, etc.). The project partner has to document the related market research (e.g. internet search, collected offers, etc.).
Project price.
Where no reliable benchmark exists (e.g. it might be the case of highly specialised consultancy services), the project partner can calculate the amount of the aid according to an estimation of the costs planned for implementing the service. In this case the project partner can assume that the total value of the training/service is equal to the total planned costs for providing it. Total planned costs cover, for example, room rent, cost of speakers, travelling, etc. The project partner then uses the total planned costs to calculate total costs per participant.
2. Measures for aid to third parties
The Programme applies GBER, Article 20a for aid to third parties. Under this Article the project partner supporting the third party can provide non-financial support of up to EUR 22,000 per undertaking per project. The partner has to document the calculation of the aid and retain it in the project documentation. Project partners are advised to check national legislation for any rules related to aid to third parties as these might apply even if the Programme uses Article 20a.
In the extraordinary case that the value of the non-financial support is higher than EUR 22,000 the project partner providing the support has to eliminate any State aid element.
