The Local Authorities (Capital Finance and Accounting) (Wales) (Amendment) Regulations 2018 (SI 2018/325 (W.61)) amend the Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003 by: introducing new definitions of “securitisation transaction” and “money market fund”; providing that a securitisation transaction must be treated as a “credit arrangement” for the purposes of the Local Government Act 2003 s.7; making a substitution to provide for the calculation of the cost of a securitisation transaction; replacing the term “fixed asset” with the current terminology in local government accounting practice; making it clear that sums received by the local authority in respect of the redemption of a bond on its maturity, or disposal of a bond, must not be treated as a capital receipts, unless the bond was acquired before 1 April 2018 and the expenditure on acquisition was treated as “capital expenditure”; inserting a new reg.8A which provides that the value of any consideration received as a result of a securitisation transaction by a local authority must be treated as a capital receipt; removing the requirement that only capital receipts received in respect of a disposal of an interest in land other than housing land may be used to meet the costs of, or incidental to, the disposal, provided such costs do not exceed 4% of the capital receipt arising from the disposal; removing the requirement for expenditure by local authorities on the acquisition of loan capital to be treated as “capital expenditure”; extends the ability of local authorities to defer charging liabilities for back pay due to equal pay claims to revenue account until the date on which the local authority must pay that back-payment; and removing the reference to one of the documents identified as constituting “proper practices” for the purposes of the Local Government Act 2003 s.21.

Does a transfer of property-related assets from the public to the private sector constitute State Aid. This was the issue before the Grand Chamber of the ECJ in Case C-579/16 P, FIH Holding A/S v FIH Erhversbank A/S, Judgment on 6 March 2018.  The Court reiterated:

(1) Classification of a measure as “State aid” for the purposes of Article 107(1) TFEU requires all of the conditions set out in that provision to be fulfilled;

(2) First, there must be an intervention by the State or through State resources;

(3) Second, the intervention must be liable to affect trade between Member States;

(4) Third, it must confer a selective advantage on the recipient;

(5)  Fourth, it must distort or threaten to distort competition; Read more »

Case C-127/16 P, European Commission v French Republic, ECJ Judgment on 7 March 2018, has concerned unlawful State Aid by SNCF in the context of restructuring and recapitalisation and the application of the private investor test to an assignment of debts en bloc.   The Court stated as follows:-

(1) In interpreting a provision of EU law it is necessary to consider not only its wording but also the context in which it occurs and the objects of the rules of which it is part;

(2) The operative part of a Union act is indissociably linked to the statement of reasons for it, so that, when it has to be interpreted, account must be taken of the reasons which led to its adoption;

(3) State aid law is not concerned with the legal forms that transactions may take, but rather focuses on their economic reality; Read more »