On 23 March 2022, the European Commission (EC) has adopted rules to support European companies affected by sanctions against Russia over its invasion of Ukraine. According to a Temporary Crisis Framework of the EC to support the economy in context of Russia's invasion of Ukraine, an EU company may receive up to €400,000 in grants, which is called "state aid" in the European Union. Companies that are active in the agriculture, fishery or aquaculture sectors may receive up to €35,000 in direct grants, tax and payment relief and guarantees.
The relaxation of EU state aid rules to support thousands of companies whose supply chains are being disrupted by the sanctions follows a precedent set two years ago when the EC relaxed competition rules to support companies affected by the covid-19 pandemic (for further details please see "EU extends covid-19 state aid to 30 June 2022: effects on competition and possible foul play in aviation industry").
According to the Crisis Framework, EU companies affected by high power and gas prices may receive state aid of up to 30% of eligible costs, up to a maximum of €2 million. EU companies that are facing a liquidity crisis can apply for a public guarantee for their loans, up to 15% of their total average annual turnover in the last three closed accounting periods or 50% of energy costs in one year. The guarantees shall be limited to six years and shall apply only to investments or working capital loans. Further, EU companies with liquidity problems may apply for subsidised loans.
For further information on this topic please contact Sebastian Jungermann at Arnecke Sibeth Dabelstein by telephone (+49 69 979885 465) or email ([email protected]). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.