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PR(01)21: The EFTA Surveillance Authority adopts guidelines on state aid and risk capital


The EFTA Surveillance Authority adopted on 30 October 2001 guidelines outlining its position with respect to State aid and risk capital. The guidelines correspond to a Communication on State aid and risk capital previously adopted by the European Commission[1].

The aim of the guidelines is to clarify whether measures designed to provide or promote risk capital constitute State aid. Furthermore the guidelines provide new criteria under which the Authority may authorise such measures if they constitute aid, even if they are not compatible with the other guidelines of the Authority’s State Aid Guidelines.

While existing State aid guidelines generally require that State aid be linked to specific types of expenditure like fixed investments, research and development, training etc, known as “eligible costs”, risk capital is often aimed simply at providing working capital for new and growing business. The Authority will be prepared to authorise such measures on certain conditions, one being that the measure is addressing an identified market failure. This condition will be assumed to be met where each tranche of finance for an enterprise from risk capital measures which are wholly or partly financed through State aid will contain a maximum of EUR 500 000 or rising to EUR 750 000 in regions eligible for regional aid (rising to EUR 1 000 000 in regions where the standards of living is abnormally low or where there is serious underemployment)[2].

If the market failure condition is met, the Authority will assess the measure against certain criteria, notably: the size of the enterprises targeted by the measure (preference for small, start-up and early stage enterprises); the existence of safeguards to reduce distortion of competition between investors; investment decisions should be profit driven which could in particular be shown to be met if the measure includes the contribution of significant amounts of capital provided by market investors.

For further information please contact Mr. Frode Kristiansen, tel. (+32) 2 286 18 53.

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[1] The Commission Communication is published in OJ C 235, 21.08.2001, p. 3.

[2] Separate injection of capital within six months of each other would be considered to be part of the same tranche, as would different injections, even over a longer period, to which a commitment is made as part of a single transaction

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