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State Aid

State aid: Iceland must recover unlawful aid



Iceland's investment agreements with five companies: Becromal, Verne, Kísilfélagið, Thorsil and GMR Endurvinnslan, involved state aid not in line with the EEA Agreement. The EFTA Surveillance Authority has therefore ordered the Icelandic State to recover any aid that was granted under these agreements.

“Iceland may grant state aid to promote investments and new employment opportunities in disadvantaged regions, but it has to comply with the rules and framework given by the EEA Agreement and be notified and approved by the Authority. Any aid granted under investment agreements with the five companies investigated by the Authority has to be recovered by Icelandic authorities”, Ms. Oda Helen Sletnes, president of the Authority, said.

 In October 2010, the Authority approved an Icelandic scheme on investment incentives. The scheme, which expired at the end of 2013, was aimed at promoting investment in areas outside the capital region, in particular through the granting of tax exemptions. In the period 2010–2013 the Icelandic government entered into agreements with several companies.

 In April 2013, the Authority decided to open an in-depth investigationinto the scheme and the investment agreements, in order to assess their compatibility with EEA law.

 The Authority has now concluded that the aid granted to Becromal and Verne did not provide an incentive to invest in the region, as required by the state aid rules, because the companies had taken their business decisions and started their projects regardless of the aid. Any aid granted under these agreements is therefore not in line with EEA state aid rules and is not covered by the Authority's approval of the scheme in 2010. As a consequence, such aid must be recovered from the beneficiaries.

 The Authority has also found that the investment agreements with Kísilfélagið, Thorsil and GMR Endurvinnslan entail operating aid rather than investment aid. These agreements are also not covered by the Authority's approval of the scheme, and any aid granted on the basis of these agreements must therefore equally be recovered.

 A non-confidential version of the decision will shortly be published on the Authority's website and in the Official Journal of the European Union.

 More information

 Relevant documents

 For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187

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