The European Court of Justice (ECJ) has filled in an important gap in EU State aid law. Under the Boussac line of case law, when a Member State fails to notify the European Commission of new plans to grant aid, the aid cannot be recovered immediately. The Commission has to determine first whether the aid is incompatible with the common market. The ECJ has now ruled that even if the Commission decides that the un-notified aid is compatible with the common market, there is an intervening period of illegality during which: (i) the aid recipient can be required to pay interest on the temporary illegal advantage; and (ii) competitors may sue for loss caused by the temporary illegality. Thus this judgment creates an additional financial risk for companies who receive un-notified aid.
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Landmark court ruling on recovery of State aid
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