SUPPORT FOR THE IMPLEMENTATION OF AGREEMENTS BETWEEN THE REPUBLIC
OF MOLDOVA AND THE EUROPEAN UNION
UNOFFICIAL TRANSLATION
(DRAFT) Law on State Aid
January 2009
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(DRAFT) Law on State Aid
Parliament adopts the present organic law
Chapter I
General Provisions
Article 1 - Area of regulation and scope of the law
(1) The present law establishes the legal basis for the authorisation, granting, monitoring and reporting
on state aid to entities from all sectors of the national economy for the purpose of creating a fair
competition environment.
(2) The present law does not regulate state aid in the agricultural and fisheries sectors.
Article 2 - Competent authority and its functions
(1) The National Agency for the Protection of Competition (hereinafter: the Agency) is the state authority
responsible for authorisation, monitoring and reporting in regard to state aid.
(2) For the purpose of carrying out its functions under paragraph (1), the Agency has the powers
provided for in the present law and in the Law on the Protection of Competition.
Article 3 - Main definitions
State Aid — any type of support given by the state or administrative/territorial units from state or
administrative/territorial
resources,
or
by
other
institutions
which
manage
public
or
administrative/territorial funds, in any form, if such support gives an economic advantage to a receiver
which would not be possible to gain in normal market conditions, if it is given on a selective basis to one
entity and if it distorts, or is likely to distort, competition.
State aid arises where public resources are given to an entity or where the state, administrative/territorial
units or other institutions which manage public or administrative-territorial funds forego or exempt future
revenues or possible profits which would have been gained from the entity.
The following, inter alia, are considered to be state aid: subsidies, the cancellation of debts or losses;
exemptions, reductions or postponements in the collection of taxes and duties; the granting of loans on
favourable terms; preferential guarantees provided by the state, administrative/territorial units or other
institutions managing public or administrative/territorial funds; investments using state capital or the
capital
of
administrative/territorial
units
or
other
institutions
which
manage
public
or
administrative/territorial funds where the accepted return on investment is lower than under normal
market conditions; a price reduction below prevailing market prices in regard to goods and services
provided by central or local authorities or by other institutions managing public or administrative/territorial
finds, including the sale of movable and immovable property belonging to the state or local bodies.
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Existing aid — state aid which meets the following conditions:
(а) state aid which was in effect prior to present law entering into force;
(b) state aid which is authorised by the Agency
(c) notified state aid where the Agency has not taken a decision within the time limit stipulated in
the present law;
De Minimis aid (minimal) – state aid below a prescribed limit for a maximum period of three years, which
is provided in a certain form, which is provided to certain sectors of the national economy, and which is
not related to export activities.
Prohibited aid — any state aid, with the exceptions of existing aid and state aid exempted from the
requirement of notification in accordance with the present law, which was provided without the Agency’s
authorisation or which was provided after notification but before the Agency’s decision, or which was
provided in contravention of the Agency’s decision.
Individual aid - state aid which is not provided under a scheme of state aid;
State aid scheme - a system which allows, without the need for additional implementation measures, for
the provision of state aid to certain entities in general or abstract form, or any other act which allows for
the provision of state aid to one or more entities for an indefinite time period and in an indefinite amount
which is not related to a specific project;
Provider — any agency of central or local public administration, or other institutions managing directly or
indirectly public or administrative/territorial funds, which provides state aid;
Receiver — any entity receiving state aid;
Service of general economic interest — any service of an economic character where duties are imposed
by the state on the entity providing the service in regard to access by consumers to such a service
without discrimination and/or other requirements.
Notification — a provider’s application to the Agency for the authorisation of proposed state aid, which
must be submitted, along with all necessary information, to the Agency for its decision.
Definitions of “entity” and “association” are used in the same manner as established in the Law on the
Protection of Competition.
Article 4 - Compatible state aid
(1) The following categories of state aid are considered compatible with a normal competition
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environment and are exempted from Agency notification:
а) State aid of a social character rendered by a certain provider on the condition that the
aid is provided without discrimination related to the origin of goods;
b) State aid provided for the purpose of eliminating the consequences of natural disasters
and exceptional occurences.
Article 5 - State aid which may be considered as compatible
(1) The following categories of state aid may be considered compatible with a normal competition
environment:
a) State aid intended for the promotion of culture and the preservation of national heritage,
on the condition that it will not affect trade and the competition environment in the country
to a degree that would contradict state interests;
b) State aid intended for regional economic development where living standards are
where there is a serious level of unemployment;
с) State aid intended for the elimination of serious disturbances in the national economy;
d) State aid provided to those entities which provide services of general economic interest;
е) State aid provided to those sectors with a problem of over-capacity as part of a
restructuring programme for the sector;
f) State aid provided for the rescue and restructuring of entities experiencing difficulties;
g) State aid provided to small and medium-sized enterprises;
h) Sectoral aid;
i) Aid intended to support regional investments;
j) Aid intended for job creation and the professional training of employees;
k) Aid for the purpose of environmental protection;
l) Aid intended to support research and development;
m) Aid aimed at assisting employment including the employment of disabled persons.
(2) The following will be determined, via legal acts, for each category of state aid, listed in paragraph1 of
the present article, in order to establish when they will be considered compatible with a normal
competition environment:
а) The conditions for providing state aid;
b) The purpose of the state aid;
c) The categories of receivers;
d) The limits to be applied, expressed either as the intensity of the state aid in comparison with
eligible costs, or a maximum value of the state aid;
e) The conditions regulating state aid accumulation;
f) Monitoring conditions.
(3) General measures applied to all entities in all sectors of the national economy are not considered to
be state aid.
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Article 6 - Incompatibility of state aid
(1) The provision of state aid other than as prescribed in Article 4 and Article 5 of the present law is
considered to be incompatible with a normal competition environment.
(2) Any state aid intended to support exports or any state aid which legally or factually is conditional on
export performance and which could have an impact on the proper fulfillment of international
agreements to which the Republic of Moldova is a party, is prohibited.
Chapter II
Procedural rules
Article 7 - Notification of state aid.
(1) Information on any intention to provide state aid in the framework of a legal act, with the exception of
de minimis aid and aid provided under Article 4 of the present law, must be notified to the Agency.
(2) The provision of new state aid and alterations in regard to existing state aid are prohibited unless
notified to the Agency.
(3) Within 15 days of receiving a notification, the Agency will acknowledge the receipt of a complete
notification, or identify in writing to the relevant providers of aid
the need for further
amendments/corrections to the notification.
(4) A notification shall be considered complete if it is fully in accordance with the requirements of the
Rules of the Agency in regard to the format of the notification and the procedures for examination and
decision making concerning state aid.
(5) If the Agency considers that the information provided in a notification is incomplete or incorrect, it
shall notify the state aid provider in writing on the need for the notification to be amended or corrected;
(6) Within 20 days, the aid provider shall finalise the amendment or correction of the information
provided in the notification. This deadline may be extended on the basis of a reasoned request from the
state aid provider.
Article 8 - Provision of specialised assistance in the preparation of state aid schemes
In the course of drafting or amending state aid schemes, those state authorities which are involved in
state aid provision, have the right to request technical support from the Agency.
Article 9 - Suspension provision
Notified state aid, with the exception of state aid referred to in Article 4 of the present law, shall not be
provided unless the Agency has issued a decision, with or without the imposition of conditions, to allow
such state aid.
Article 10 - Procedure for the consideration of a prior notification
(1) The Agency shall proceed to consider a notification without delay, starting on the day of its receipt.
(2) Following the completion of its preliminary consideration, the Agency shall make one of the following
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decisions:
а) that the notified measure is not state aid;
б) to allow the provision of state aid, with or without the imposition of conditions;
с) to start the procedure of official investigation of the case where the proposed measure is state
aid but there are doubts in regard to its compatibility with a normal competition environment.
(3) Decisions shall be taken by the Agency within 60 days. This period is calculated starting from the first
day of receiving a complete notification.
(4) If the Agency does not come to any decision within 60 days, the state aid provider has the right to
submit a notification of its intention to initiate the provision of the state aid.
(5) Where the Agency does not issue a decision within 15 days after receiving such a notification, the
state aid is considered to be approved.
Article 11 - Official investigation procedure
(1) The official investigation procedure shall not exceed a duration of 18 calendar months.
(2) Upon the completion of the official investigation procedure, the Agency shall make one of the
following decisions:
a) that the notified measure is not state aid;
б) to allow the provision of state aid, with or without the imposition of conditions;
с) refusing to authorize the granting of the proposed state aid.
Article 12 - Measures concerning existing state aid
If during the procedure of monitoring existing state aid, the Agency establishes that existing aid
considerably distorts the normal competition environment, the Agency has the right to request state aid
providers to take necessary measures in order to remove incompatibilities with the present law.
Article 13 - Procedures in regard to prohibited state aid
(1) If the Agency receives information concerning possible prohibited aid, the Agency has the right to
request full information from the relevant state aid provider in order to make a decision on the matter.
(2) The Agency has the right to issue instructions for the relevant state aid provider to suspend the
provision of possible prohibited aid until a decision on compatibility with the present law is made.
Article 14 - Recovery of prohibited state aid
(1) In any case where prohibited aid has been provided, the Agency shall issue a decision to recover it to
the provider, which shall collect it from the receiver.
(2) In any case where state aid is decided to be prohibited aid, whether by means of a legal act or a
decision, the Agency shall inform the provider of its incompatibility with the present law.
(3) Within 30 days after receiving information under paragraph (2), the provider shall notify the state aid
to the Agency, in accordance with the provisions of Article 7. The provider, taking account of the decision
of the Agency, shall introduce changes in the legal act related to the granting of the state aid and will
make a decision to recover the aid which has been already provided.
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(4) The amount of recovered state aid must include the payment of interest at a rate which is 9% higher
than the base rate of the National Bank of Moldova.
(5) The amount is calculated starting from the day when the prohibited aid was first provided to the
receiver until the date of its full recovery.
(6) The Agency’s decision on the recovery of prohibited aid, with the exception of state aid which was
provided in accordance with a legal act, shall be implemented within the time period indicated by the
Agency.
(7) Recovered state aid and additional interest payments shall be transferred to the budget of the
relevant provider.
(8) In any case where a provider does not carry out the Agency’s decision to recover prohibited aid, the
Agency shall refer the matter to the court.
Article 15 - Limitation of action
(1) The Agency’s right to decide on the recovery of prohibited aid is limited to a period of 6 years.
(2) The limitation period starts on the day when the prohibited aid became fully available to the receiver,
and is interrupted by any action taken by the Agency concerning the provision of the state aid in
question.
(3) The limitation period is suspended in any case where the decision of the Agency is brought before a
court.
Article 16 - Appeal of Agency decisions
(1) Decisions of the Agency taken in accordance with the present law can be appealed in court within 30
days.
(2) The appeal of a decision does not suspend the obligation to comply with it.
Article 18 - Registry of state aid
(1) The Agency will set up and maintain a state aid register.
(2) The keeping of the state aid register shall be carried out in accordance with the rules prescribed in
current legislation and with a Regulation of the Agency regarding the state aid register.
(3) State aid providers and receivers must keep a precise record of state aid which was provided or
received, in accordance with rules established by the Agency.
Article 19 - Transparency of state aid
(1) The conclusive parts of Agency decisions, taken in accordance with the present law, shall be
published in the Official Gazette of the Republic of Moldova.
(2) The Agency will prepare an annual report on the state of affairs in regard to state aid, for the approval
by the Parliament of the Republic of Moldova.
(3) When approved by the Parliament of the Republic of Moldova, the annual report on the state of
affairs in regard to state aid shall be published in the official Gazette of the Republic of Moldova.
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Article 20 - Final provisions
(1) Within 6 months after the adoption of the present law, providers of state aid must notify the Agency of
existing aid schemes which were applied before the present law came into force.
(2) In any case where aid scheme has not been notified to the Agency, as prescribed in paragraph 1,
such aid will be considered prohibited. The recovery of prohibited aid shall commence from the date of
entry into force of the present law.
(3) The present law shall enter into force 6 months after its publication.
(4) Within 6 months from of the publication of the present law, the Agency shall:
- submit to the Parliament of the Republic of Moldova proposals on bringing current legislation into
compliance with the present law;
- bring it’s normative acts in compliance with the present law;
- ensure the preparation and adoption of normative acts foreseen in the present law;
- establish subdivisions for the implementation of the present law.
(5) The Government will provide the Agency with the funds necessary for the implementation of the
provisions of the present law.
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