Legislation – Subsidy Control Act 2022

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Introduction

PART 1
Overview and key interpretation

1 Overview and application of Act

2 “Subsidy”

3 Financial assistance which confers an economic advantage

4 Financial assistance which is specific

5 Section 2: modification for air carriers

6 “Public authority”

7 “Enterprise”

8 Persons under common control

9 The subsidy control principles and the energy and environment principles

10 Subsidy schemes and streamlined subsidy schemes

11 Subsidies and schemes of interest or particular interest

PART 2
Subsidy control requirements

CHAPTER 1 Principles

12 Application of the subsidy control principles

13 Application of the energy and environment principles

CHAPTER 2 Prohibitions and other requirements

Introductory

14 Introductory

General prohibitions

15 Unlimited guarantees

16 Export performance

17 Use of domestic goods or services

18 Relocation of activities

Ailing or insolvent enterprises

19 Rescuing

20 Restructuring

21 Restructuring deposit takers or insurance companies

22 Liquidating deposit takers or insurance companies

23 Liquidity provision for deposit takers or insurance companies

24 Meaning of “ailing or insolvent”

25 Meaning of “deposit taker”

26 Meaning of “insurance company”

Other specific prohibitions and requirements

27 Subsidies for insurers that provide export credit insurance

28 Subsidies for air carriers for the operation of routes

29 Services of public economic interest

Subsidy schemes

30 Effect of prohibitions etc in relation to subsidy schemes

Subsidies or schemes subject to mandatory referral

31 Subsidies or schemes subject to mandatory referral

CHAPTER 3 Transparency

32 Subsidy database

33 Duty to include information in the subsidy database

34 Information to be included in the subsidy database

PART 3
Exemptions

CHAPTER 1 Introductory

35 Introductory

CHAPTER 2 Minimal or SPEI financial assistance

Minimal financial assistance

36 Minimal financial assistance

37 Section 36: procedural requirements

Services of public economic interest assistance

38 Services of public economic interest assistance

39 Section 38: procedural requirements

General

40 Mergers and acquisitions

41 Exemption for certain subsidies given to SPEI enterprises

42 Chapter 2: supplementary and interpretative provision

CHAPTER 3 Emergencies etc.

43 Natural disasters and other exceptional circumstances

44 National or global economic emergencies

CHAPTER 4 Other miscellaneous exemptions

45 National security

46 Bank of England monetary policy

47 Financial stability

48 Legacy and withdrawal agreement subsidies

49 Tax measures

50 Large cross-border or international cooperation projects

51 Nuclear energy

PART 4
CMA: referrals and functions

CHAPTER 1 Functions on referrals of subsidies and schemes

Mandatory referrals

52 Mandatory referral to CMA

53 CMA reporting period for mandatory referral

54 Cooling off period following mandatory referral

55 Call-in direction

Voluntary referrals

56 Voluntary referral to CMA

57 CMA reporting period for voluntary referral

58 Call-in direction following voluntary referral

Mandatory and voluntary referrals: contents of CMA report

59 CMA report following mandatory or voluntary referral

Post-award referrals

60 Post-award referrals

61 CMA reporting period for post-award referrals

62 CMA report following post-award referral

Exemptions

63 Referrals in relation to subsidy schemes

64 Other exemptions

CHAPTER 2 General functions

65 Monitoring and reporting on subsidy control

66 CMA annual report

67 Information-gathering powers

CHAPTER 3 Subsidy Advice Unit

68 Subsidy Advice Unit

69 References to subsidy control groups

PART 5
Enforcement

70 Review of subsidy decisions

71 Time limits for applications under section 70

72 CAT powers on review: England and Wales and Northern Ireland

73 CAT powers on review: Scotland

74 Recovery orders

75 Appeals against decisions of the CAT

76 Duty to provide pre-action information

77 Misuse of subsidies

PART 6
Miscellaneous and general

CHAPTER 1 Miscellaneous

78 Subsidies and schemes in primary legislation

79 Guidance

80 Disclosure of information

81 Modifications to subsidies and schemes

82 Gross cash and gross cash equivalent amount of financial assistance

83 Minor amendment to the Financial Services Act 2021

CHAPTER 2 General

84 Financial provision

85 Crown application

86 Power to make consequential provision

87 Regulations

88 Directions

89 Interpretation

90 Extent

91 Commencement

92 Short title

SCHEDULES

SCHEDULE 1 The subsidy control principles

SCHEDULE 2 The energy and environment principles

SCHEDULE 3 Subsidies provided by primary legislation

PART 4CMA: referrals and functions

CHAPTER 1Functions on referrals of subsidies and schemes

Post-award referrals

60Post-award referrals

(1)

The Secretary of State may refer a subsidy or subsidy scheme to the CMA after the subsidy has been given or the subsidy scheme has been made.

(2)

A referral under subsection (1) may be made in relation to any subsidy or subsidy scheme in respect of which the Secretary of State considers—

(a)

that there has or may have been a failure to comply with the requirements of Chapters 1 and 2 of Part 2, or

(b)

that there is a risk of negative effects on competition or investment within the United Kingdom.

(3)

The Secretary of State must, at the same time as making a referral under subsection (1), direct the public authority to provide to the CMA—

(a)

any assessment carried out by the public authority, before the subsidy was given or the scheme was made, as to whether the subsidy or scheme would comply with the requirements of Chapters 1 and 2 of Part 2, and the reasons for that conclusion,

(b)

any evidence relevant to that assessment,

(c)

in a case where such an assessment is not provided, the reasons for that,

(d)

any information that the public authority failed to enter in the subsidy database in accordance with Chapter 3 of Part 2, and

(e)

such other information as is specified in regulations under subsection (8)(a).

(4)

Where the Secretary of State decides to make a referral under subsection (1), the referral, together with a direction given under subsection (3), must be made before the end of 20 working days beginning with—

(a)

the day on which the entry in respect of the subsidy or scheme is entered into the subsidy database, or

(b)

the day on which the subsidy is given or the scheme is made, in the case of a subsidy or scheme to which section 41 applies.

(5)

The Secretary of State—

(a)

must publish a referral made under subsection (1) in such manner as the Secretary of State considers appropriate, and

(b)

must send a copy of a direction given under subsection (3) to the public authority and the CMA.

(6)

The public authority must provide to the CMA the information required under subsection (3) before the end of the information period.

(7)

Information period” means the period of 20 working days beginning with the day on which the direction is given.

(8)

The Secretary of State may by regulations—

(a)

specify further information that must be provided under subsection (3);

(b)

prescribe the form in which the information required under subsection (3) is to be provided;

(c)

amend the periods of time specified in subsections (4) and (7).

(9)

Regulations under subsection (8)(a) or (b) are subject to the negative procedure.

(10)

Regulations under subsection (8)(c) are subject to the affirmative procedure.

61CMA reporting period for post-award referrals

(1)

Where the CMA receives from the Secretary of State a referral under section 60, the CMA must—

(a)

before the end of the reporting period, publish a report on the subsidy or subsidy scheme to which the referral relates, in such manner as the CMA considers appropriate, and

(b)

give a copy of the report to the public authority and the Secretary of State as soon as reasonably practicable after it is published.

(2)

Subject to subsections (3) and (5), “reporting period” means the period of 30 working days beginning with the earlier of—

(a)

the day on which the information required under section 60(3) is provided to the CMA by the public authority, and

(b)

the day after the information period in section 60(7) ends.

(3)

The reporting period may be extended if an extension is agreed in writing between the CMA and the public authority before the end of the reporting period.

(4)

Where the reporting period is extended under subsection (3), the CMA must publish, in such manner as the CMA considers appropriate, a notice that the reporting period has been extended and by how much, and the reasons for the extension.

(5)

The Secretary of State may direct that the reporting period is extended, in response to a request from the CMA.

(6)

A request under subsection (5)—

(a)

may only be made if the CMA considers that there are exceptional circumstances to justify an extension,

(b)

must include the reasons for seeking an extension, and

(c)

must be published, with those reasons, in such manner as the CMA considers appropriate.

(7)

A direction under subsection (5)—

(a)

may only be given if the Secretary of State is satisfied that there are exceptional circumstances to justify an extension,

(b)

may not be given in relation to a subsidy or subsidy scheme given or made by the Secretary of State, and

(c)

may not be given so as to provide for an extension which exceeds 40 working days beginning with the day on which the reporting period would otherwise end.

(8)

As soon as reasonably practicable after receiving a request under subsection (5) the Secretary of State must—

(a)

send a copy of a direction given under subsection (5) to the CMA and to the public authority, or

(b)

give notice to the CMA and the public authority that the request has been rejected and provide reasons for that decision.

(9)

Any day falling within the period beginning with the day on which a request is published by the CMA under subsection (6) and ending with the day on which a direction is given under subsection (5), or a notice is given under section (8), does not count for the purposes of calculating the reporting period.

(10)

The Secretary of State must publish, in such manner as the Secretary of State considers appropriate, a direction given under subsection (5) or a notice given under subsection (8).

(11)

The Secretary of State may by regulations amend the period of time specified in subsection (2).

(12)

Regulations under subsection (11) are subject to the affirmative procedure.

62CMA report following post-award referral

(1)

The CMA’s report under section 61 must include an evaluation of the public authority’s assessment under section 60(3)(a).

(2)

The evaluation must take into account any effects of the proposed subsidy or scheme on competition or investment within the United Kingdom.

(3)

If an assessment was not provided under section 60(3)(a), that fact should be stated in the report, along with any reasons provided under section 60(3)(c).

(4)

If the subsidy or subsidy scheme is ongoing, the report may also include advice about how the subsidy or scheme may be modified to ensure compliance with the requirements of Chapters 1 and 2 of Part 2.

(5)

The Secretary of State may by regulations—

(a)

amend subsection (1), (2), (3) or (4) to make provision about the content of the CMA’s report under section 61;

(b)

make provision as to the form of that report.

(6)

Regulations under subsection (5)(a) are subject to the affirmative procedure.

(7)

Regulations under subsection (5)(b) are subject to the negative procedure.