After months of debate, agreement has been reached by both Houses on the Subsidy Control Act 2022 c.23 (Act) which received Royal Assent on the 28 April 2022.
After months of debate, agreement has been reached by both Houses on the Subsidy Control Act 2022 c.23 (Act) which received Royal Assent on the 28 April 2022. The Act sets out the UK’s new subsidy control regime, which replaces the UK-EU Trade and Cooperation Agreement (TCA) - the prior EU state aid rules and obligations which have been in place since the UK’s exit from the EU. The full scope of the Act will not come into force until Autumn 2022, with further guidance and secondary legislation expected from the Government to assist with the interpretation and application of this new regime. In the meantime, public authorities granting subsidies and recipients of subsidies should familiarise themselves with the Act in order to prepare for the new regime.
The Act provides a new definition of a subsidy which differs slightly from that provided for under EU state aid rules and the TCA:
Subsidy - ‘financial assistance, which is given directly or indirectly from public resources by a public authority, confers an economic advantage on one or more enterprises, is specific, and benefits one or more enterprises over another, and has or is capable of having an effect on competition or investment or trade within the UK or between the UK and another country’.
The main elements of the Act are summarised below:
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