Commission opens in-depth State aid investigation into Flemish support to land management associations

State aid investigation

The European Commission has opened an in-depth investigation to assess whether public support granted to Flemish land management associations between 2003 and 2018 is in line with EU State aid rules.

The Commission's investigation

The Commission's assessment started on the basis of a complaint, alleging that the Flemish region and its municipalities granted unlawful State aid to three land managing nature organisations, namely Natuurpunt Beheer, Limburgs Landschap and Vzw Durme, which conduct nature conservation activities as well as information and education activities related to nature conservation and environmental protection. In particular, the support has been allegedly granted for the purchase of land to be converted into natural reserves and for the costs of running visitor centres in those reserves.

The Commission's preliminary investigation showed that the Flemish support took the form of grants covering up to 100% of the costs of land acquisition and of the education activities organised in the visitor centres. In addition, the land management associations carried out certain secondary activities, such as sale of wood, land lease or cafeterias in the visitors' centres.

At this stage, based on its preliminary assessment, the Commission has doubts as to whether the Flemish public support was in line with EU State aid rules.

According to the jurisprudence of the EU Courts, environmental protection activities having a social character, or State-supervised education and information activities for the general public, do not constitute an economic activity and therefore State support towards them is not considered State aid.

Next to their core non-economic activities, operators may also be involved in certain secondary activities. However, only those secondary activities pursuing the same interest as and being inseparably linked to the main activities could be considered as non-economic and therefore not qualified as State aid. Otherwise, the secondary activities would be assessed separately and could be considered as economic activities, and State support for those constitutes State aid.

For this reason, the Commission has decided to open an in-depth investigation to assess whether the secondary activities conducted by the land management associations constitute State aid, i.e. whether or not they pursue the same interest of nature conservation and education as the main activities, and are inseparable from the main activities.

The opening of an in-depth investigation provides all interested parties, including the alleged beneficiaries of the aid and the complainant, with an opportunity to comment on the measure. It does not prejudge in any way the outcome of the investigation.

Background

According to Article 107(1) of the Treaty on the Functioning of the EU, a measure constitutes State aid if the following four cumulative conditions are met: (i) the measure has to be granted by Member States through State resources; (ii) the measure has to confer a selective economic advantage to certain companies, (iii) the advantage has to distort or threaten to distort competition, and (iv) the measure has to affect trade between EU Member States.

The non-confidential version of the decision will be made available under case number SA.36303 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.