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AMCU explains benefits of new state aid rules

State aid is any direct or indirect funding from the state budget.

AMCU explains benefits of new state aid rules
Photo: Max Levin

The Antimonopoly Committee of Ukraine (AMCU) has named the advantages of the new rules of state assistance which came into force in 2017 in line with the law "On State Aid to Undertakings", government representative at the AMCU Anna Artemenko has said at a web conference hosted by Gorshenin Institute.

"State aid is any direct or indirect funding from the state budget: grants, subsidies, allocations which give an advantage and influence competition. This also includes incomplete reception of resources by the state, such as through tax benefits, the sale of state or municipal property below their market value," she explained.

The ground rule is that any government assistance before its approval must be assessed by the authorized body, which is the AMCU.

Artemenko said that following the introduction of state aid rules, there should be a transition from an inefficient system of support for undertakings to state investment in development, innovation, support for SMEs and regional development.

Artemenko named the following benefits of state aid rules:

1. Common good and purpose

"One of the innovations of these rules is that state aid must have a socially useful goal. It can be either regional development, technical progress or support for SMEs. It can be a useful goal in the form of environmental protection."

2. Minimizing the use of public resources

"One of the key principles is proportionality: the state should allocate exactly as much as is necessary to meet the goal."

3. Transparency

"One of the key objectives of implementing this system is to create a registry and essentially an inventory of all mechanisms of state aid that has been provided and are currently in operation. We hope that in the near future any taxpayer, journalist or analyst will be able to check out the registry at their convenience for any topics of interest to them without much effort."

4. Stimulating effect

"State aid should stimulate and change the behaviour of an undertaking, who is the beneficiary of assistance, encourage it to open new activities and achieve higher standards."

5. Competitive neutrality

"The state must provide equal access for all undertakings, regardless of the form of ownership."

In addition, Artemenko stressed that the issue of state aid supervision is a EU requirement within the framework of the EU-Ukraine Association Agreement.

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