Ireland, as an EU Member State, is required to comply with the State Aid regulations. The European Commission oversees the application of State Aid rules among Member States. Failure to comply with the State Aid rules, such as a failure to provide notification to the European Commission or implementing the aid without approval can result in the Member State being required to recover any aid provided. These rules also provide for added interest to be applied.
Article 107(1) Treaty on the Functioning of European Union (TFEU) defines State Aid as any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens to
distort competition by favouring certain ‘undertakings’ or the production of certain goods. Articles 107(2) and 107(3) provide for exceptions where State Aid can be ‘compatible with the internal market’, such as aid to promote regional economic development, as well as research and innovation.
• The TFEU sets out specific classification criteria for a subsidy to be classified as
• State Aid:
• ? The measure is granted by the State or through State resources (such as a grant, loan, subsidy, or a tax exemption),
• ? The measure gives a selective advantage to one or more entity over others (such as a specific company, industry sector or within a specific region),
• ? The measure could potentially distort competition i.e., businesses receiving a tax exemption would have an unfair advantage over other businesses,
• ? The measure could potentially affect trade between EU Member States.
Most State Aid has the potential to disrupt trade within the EU.
The primary source of funding for the Irish commercial seafood sector, including inshore and island fishermen and fisherwomen, is Ireland's Seafood Development Programme (2021-2027), which is co-funded by the Irish Government and the European Commission under the European Maritime, Fisheries and Aquaculture Fund (EMFAF) 2021-2027. The measures which are eligible for aid are set out in the regulation governing the implementation of the EMFAF regulation, which is aligned with the objectives of the Common Fisheries Policy. There is no provision for direct income supports in relation to primary producers in the seafood sector under the Common Fisheries Policy. The EMFAF regulation does not make provision for the use of EMFAF funds to provide income supports to primary producers in the seafood sector. Equally, there is no provision in the relevant EU regulations governing state aid that would allow any Exchequer-funded subsidy scheme for the seafood sector or for fishermen, in particular.
