State Aid

December 29th, 2020

The UK will continue to have after 1 January 2021 a subsidy control system that will be legally enforceable. The subsidy provisions in the 1246 pages Brexit deal are however weaker than the EU’s initial proposals. These had been for the UK to align with EU state aid law. They are nonetheless stronger than the provisions of the EU’s free trade agreements with Canada and Japan. Indeed, many of the definitions and principles in the Brexit deal are similar to the EU State Aid system. There are features that the UK’s subsidy control system must include.

The Brexit deal sets out a definition of a subsidy, basically selective advantage, a list of common principles, and exemptions from prohibitions. The deal also addresses enforcement. There will have to be a Court or Tribunal for subsidy cases, and specified common remedies for breach, including recovery of a payment.

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