Up to 300 thousand euros in three years: the Rada is preparing new rules for state aid to businesses

The Verkhovna Rada Committee on Economic Development recommended that the parliament adopt as a basis draft law No. 15437, which provides for the restoration of certain norms of legislation on state aid to business entities and changes in the mechanisms for controlling its provision.

The document should make the system of state support for business more transparent, strengthen the protection of competition and facilitate Ukraine’s fulfillment of international obligations, in particular those provided for by the Association Agreement with the European Union.

Up to 300 thousand euros – insignificant state aid

One of the key innovations concerns the concept of “insignificant state aid”. It is proposed to consider support to one business entity, the total amount of which does not exceed the equivalent of 300 thousand euros during any three-year period.

The amount of such aid will be determined at the official exchange rate of the National Bank on the date of its provision.

The document also clarifies the concept of illegal state aid. In particular, this concerns new support provided before the adoption of the relevant decision by the Authorized Body or contrary to its decision.

Who is proposed to be considered a “disadvantaged person”

The draft law introduces a new concept – “disadvantaged person”. These are workers who find it more difficult to compete on equal terms in the labor market.

This category is proposed to include, in particular:

people aged 15 to 24;

people over 50;

those who have been unemployed for the past six months;

people without complete secondary, vocational or other specified education;

people who have recently graduated and have not previously had permanent paid work;

individual workers in industries with a certain level of gender inequality;

representatives of ethnic minorities who need additional language skills, training or experience for permanent employment.

Criteria are also provided for single people living with dependents.

Six months to decide on aid

The draft law establishes specific deadlines for considering cases. The authorized body will have to make a decision on state aid within six months from the date of commencement of consideration.

With the consent of the provider, this period can be extended for a maximum of six months.

In addition, aid providers will be able to seek advice in advance on future support and the correctness of the documents. The response must be provided within ten working days.

Illegal aid will have to be returned

The authorized body will have the opportunity to demand the termination and/or return of aid that is recognized as illegal or unacceptable for competition.

If the relevant decision is not implemented voluntarily, the body will be able to apply to the administrative court.

At the same time, a 10-year period is established, after the expiration of which it will be impossible to demand the return of illegal state aid recognized as unacceptable for competition. In certain cases, the running of this period will be suspended.

Rada experts saw problematic points

The Main Scientific and Expert Department of the Verkhovna Rada expressed a number of comments on the document.

In particular, experts consider the proposed definition of state aid to be debatable, since its wording may imply that any such support distorts or threatens to distort competition. At the same time, the legislation allows for state aid that is recognized as permissible for competition.

Questions also arose regarding the concept of “unsecured person”. According to experts, it needs to be harmonized with the legislation on employment of the population, which already defines categories of citizens with additional guarantees upon employment.

In particular, the proposed list does not cover some categories that already have such guarantees in accordance with current legislation.

When the new rules may come into effect

Currently, draft law No. 15437 is only recommended for adoption as a basis, so its provisions may still change during consideration by the Verkhovna Rada.

It is important that even if adopted, the new rules will not come into effect immediately. The draft law provides for the entry into force of the law 12 months after the date of the abolition of the legal regime of martial law.

Thus, the proposed reform of the state aid system is directly tied to the end of martial law in Ukraine.