The European Commission has decided that the aid scheme set up by Sardinia aiming to foster regional development of the shipping sector is illegal. The scheme allows shipping companies to obtain loans and leases at preferential conditions for the acquisition, conversion and repair of their vessels. The Commission had already declared the same scheme incompatible with the Common Market, but its Decision was annulled in 2000 by the European Court of Justice on the grounds of insufficient proof that intra-Community trade was affected. The Commission has now confirmed its previous Decision despite the fact that the scheme was modified in the meantime by the Sardinian Authorities. The Commission’s view is that the changes are contrary to the Community Guidelines on aid to maritime transport which were in force at the time.