COVID-19 update: Commission amends State aid Temporary Framework

In the wake of the publication of the Temporary Framework (see our article of 20 March 2020), the European Commission and the EFTA Surveillance Authority have adopted an impressive number of decisions in application of the Temporary Framework and continue to adopt such decisions on almost a daily basis. The status as of 3 April 2020 can be found here for the European Commission and for the EFTA Surveillance Authority.

On 3 April 2020, the European Commission adopted an amendment to the Temporary Framework. In addition to various changes of a technical nature, the Temporary Framework now also covers:

1. aid for R&D relating to COVID-19, more specifically aid for R&D
   projects carrying out research into COVID-19 and other antiviral
   relevant research (incl. research into vaccines, medicinal products
   and treatments, medical devices and hospital and medical equipment,
   disinfectants, and protective clothing and equipment, and into
   relevant process innovations for an efficient production of the
   required products).

   One of the conditions defined by the Commission
   is that State aid beneficiaries will be required to grant
   non-exclusive licenses under non-discriminatory market conditions to
   third parties in the EEA;

2. aid for the construction and upscaling of testing facilities. In the
   same vein as for the previous category, the State aid beneficiaries
   will be required to provide testing services at market price on a
   transparent and non-discriminatory basis;

3. aid for the production of products relevant to tackle the outbreak
   such as medicinal products (including vaccines) and treatments,
   their intermediates, active pharmaceutical ingredients and raw
   materials; medical devices, hospital and medical equipment
   (including ventilators, protective clothing and equipment as well as
   diagnostic tools) and necessary raw materials; disinfectants and
   their intermediary products and raw chemical materials necessary for
   their production; data collection/processing tools;

4. deferrals of tax payments and/or suspensions of social security
   contributions for those sectors, regions or for types of companies
   that are hit the hardest by the outbreak; and

5. contributions to the wage costs of companies, restricted to sectors,
   regions or types of companies that have suffered most and would
   otherwise have had to lay off personnel.

We continue to closely monitor the situation. In Brussels and elsewhere in our network, we have a dedicated group of EU State aid experts able to guide companies and public authorities through the maze of EU State aid law and to assist in the procedure before the Commission.

Should you need assistance, have any further questions regarding this client alert or State aid generally, please do not hesitate to contact any of the individuals listed or your usual contact at Simmons & Simmons.