 So, what would happen if we gave or received unlawful aid? First of all, here is a useful summary of what counts as lawful and unlawful state aid. It's important to remember that aid can be unlawful not just when it has not been given in line with the rules, but also when the rules have not been applied properly. Getting caught. There are lots of different ways that European Commission can become aware of unlawful state aid. Every year the Commission ordered a sample of state aid schemes that member states have notified or registered with the Commission. The European Commission scans press articles from member states and can ask questions if they are concerned about state aid being provided. Businesses and other organizations can make a complaint to the Commission if they believe one of their competitors has received unlawful state aid. When this happens the Commission must investigate. So what are the implications if aid is found to be unlawful? If the Commission find the aid to be unlawful then there are consequences. The Commission can demand repayment of unlawful aid. For example they have recently issued a demand that French authorities recover aid from EDF. Competitors may also be able to use national domestic courts to sue public authorities for damages resulting from lost business. Under the new Jeeba the European Commission can decide that a public authority has to notify all of the aid they give. This will make it harder for public authorities to give state aid quickly and efficiently. What could go wrong? Example one, Ryanair. Low-cost carrier Ryanair was granted a series of preferential marketing deals and contractual rebates by various French regional airports. The European Commission investigated and found these deals to be illegal state aid ordering France to recover 10 million euros from Ryanair. Example two, the UK aggregates levy. The aggregates levy is a UK tax on the commercial exploitation of rock, sand and gravel. It was introduced as an environmental tax in 2002 to encourage the reuse and recycling of existing aggregates. The levy is charged at a flat rate of two pounds for every ton extracted, however certain aggregates are exempted. In 2013 the Commission opened an investigation into claims that these exemptions amounted to state aid. In March 2015 the Commission decided that the exemption for shale aggregates constituted state aid and has ordered that the UK government claw back all the tax foregone. So what are the responsibilities? Aid givers. To minimize the risk of state aid aid givers have a series of responsibilities. You must make sure each award of aid is given under the right state aid cover. Even if this means you aren't able to give as much as you would like it is better to use the right cover for the situation than try to shoehorn it into the wrong cover and risk investigation. Make sure that all the terms and conditions of the right state aid cover are met. If any of the terms and conditions are not met the aid will be considered illegal and you risk being forced to claw back the value of the support. If you're in doubt you can find guidance material available on the Welsh Government's website. A link is available at the end. Make sure a contact name is given to the Welsh Government state aid unit to help with annual returns and transparency. These are now part of the terms and conditions of the state aid rules and failure to provide them will put you in breach of the rules. Make sure evidence is kept for up to 10 years after the last award of aid is made under a scheme in case the Commission investigates. This will allow you to defend your actions and will decrease the risk that you will be caught upon to claw back the award. So what are your responsibilities? Aid recipients. To minimize the risk of state aid aid recipients also have responsibilities. You must ensure the aid awarding body is specifies the state aid cover for your award. Ensure your activities remain within the terms and conditions of the cover. If you are in doubt check with the aid awarding body. Ensure you provide any reporting information required in a timely manner. This is part of the terms and conditions of your award without it you risk being in breach of the cover used. Retain information on your award for 10 years in case the Commission investigates. This will allow you to defend your actions and will decrease the risk that you will be caught upon to repay the award. For more information on state aid please visit our website at this address. We have a range of fact sheets checklists and videos to help with your work.