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EU court clarifies state aid assistance rules to NPDOs

20 September 2013

When does assistance to a non-profit distributing organisation (NPDO) constitute state aid? A recent decision of the EU General Court has helped to clarify this by looking at the transfer of land for nil consideration from the German government to environmental NPDOs. The NPDOs were able to use the land for, among other things, the sale of wood, providing hunting and fishing licences and tourism. These were secondary to the general task of environmental protection.

Being able to make money from the land that had been transferred from the same activities that profit making entities would be involved was an advantage given to the NPDOs while they were acting as economic undertakings. The other two state aid tests of an intervention by the state and the ability to affect trade between member states were also met.

This is a timely reminder to public bodies that the Commission will consider different activities of an NPDO in different lights rather than making a general assumption that it is not an economic undertaking.

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