How to use a GBER Research and Development and Innovation ...

Welsh Government State Aid Unit

How to use a GBER Research and Development and Innovation Scheme Version 1 – April 2015

10/3/2014

How to use a GBER Research and Development and Innovation Scheme

Background

The Research, Development and Innovation (R&D&I) provisions of the GBER can be

used by public authorities to provide support to organisations for a variety of R&D&I

measures. This type of State aid is allowed because R&D&I is one of the key pillars of

the European Commission’s 2020 strategy.

Using a GBER R&D&I scheme

To run a GBER R&D&I scheme the correct procedures must be put in place.

Step 1 – Check that GBER Environmental Protection provisions apply

Is the measure being provided to an undertaking engaged in economic activity?

Is the aid for a R&D&I project?

If you have answered yes to both questions, then it is likely that the GBER R&D&I

measures will apply.

This document provides practical guidance on how to use a General Block Exemption

Regulation (GBER) Research and Development and Innovation (R&D&I) scheme. This

guide is not a summary of the GBER. This guidance will be most relevant to Welsh

Government officials, Universities (and other research organisations) and organisations

receiving R&D&I aid.

This guide is not a substitute for legal advice which should be sought in individual cases.

The guidance is accurate at the date of publication but please note that the law is subject

to constant change.

A full version of the Regulation can be found at:

http://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=uriserv:OJ.L_.2014.187.01.0001.01.ENG

A summary of the GBER can be found at:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325465/bis

-14-943-state-aid-general-block-exemption-guidance.pdf

IMPORTANT – you should use this guide in conjunction with the full version of the

GBER and the registration documentation applicable to your scheme.

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.187.01.0001.01.ENG

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.187.01.0001.01.ENG

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325465/bis-14-943-state-aid-general-block-exemption-guidance.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/325465/bis-14-943-state-aid-general-block-exemption-guidance.pdf

Step 2 – Identify the right State aid registration

Every GBER R&D&I Scheme must be registered with the Commission.

If you work for the Welsh Government (or are running a scheme on behalf of the

Welsh Government) you can use the following registration:

SA.39648 Welsh Government Research, Development and Innovation Scheme

http://gov.wales/topics/businessandeconomy/stateaid/schemes/research-development-innovation/?lang=en

You do not need to register a new scheme

If this registration does not apply to you, then you will need to register a scheme. The

State Aid Unit can help you with this process. Email the State aid mailbox:

[email protected]

Step 3 – Make sure that the support you want to give is compatible with all the

conditions for the appropriate GBER R&D&I Measure

Support is only considered to be compatible State aid where it meets all the terms and

conditions of the GBER, and therefore the registered scheme. Each investment will

need to be checked against these terms. Annex 1 of this document contains

checklists that you can use to assist you.

Checklist A Aid for research and development projects Checklist B Investment aid for research infrastructures

Not all public funding for Research and Development and Innovation activity is

consider State aid. This includes funding for:

The non-economic primary activities of research organisations (public

education organised within the national education system for more and better

skilled human resources; carrying out of independent R&D to gain better

knowledge; wide dissemination of research results on a non-exclusive basis).

To undertake technology transfer activities where they are conducted by the

research organisation and all the profits are reinvested into non-economic

activities.

Collaborative research where: the company pays for all the R&D activity; or

where results that don’t generate Intellectual Property Rights (IPR) are widely

disseminated and the research organisation gets full rights to the IPR; or IPR

generated is shared with partners according to contribution; or the company

pays full market price for the IPR generated.





mailto:[email protected]

Checklist C Aid for innovation clusters

Checklist D Innovation aid for SMEs Checklist E Aid for process and organisational innovation

Checklist F Aid for research and development in the fishery and aquaculture sector

You will also need to keep supporting evidence to show that all the terms and

conditions are met. This is because if the European Commission asks you will need to

be able to show that the support you gave was compatible with the rules.

Step 4 – Check if the support is more than €500,000

If the support you are providing is more than €500,000. The sterling equivalent should be calculated using the European Commission’s exchange rate convertor, this can be found at:

http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm Details of the investment will then be made available on a database that can be

viewed by the general public. The European Commission has given Member States

until June 2016 to implement this. You should collect the following information:

Name of company receiving the support;

The company’s identifier;

Type of company (small, medium or large) at time of granting;

Region in which the company is located at NUTS 2 level (annex 2 – has a list of

NUTS 2 Areas);

Sector of activity at NACE group level – a list of NACE codes can be found at

http://ec.europa.eu/competition/mergers/cases/index/nace_all.html;

Aid amount in sterling;

Aid instrument (grant/Interest rate subsidy, loan, repayable

advances/reimbursable grant, guarantee, tax advantage or exemption, risk

finance, other (please specify);

Date of granting the aid;

Objective of the aid i.e. what will it be used for? What do you hope to achieve

by granting the aid?;

Granting authority;

Reference of the aid measure.

IMPORTANT – this will only apply to projects/investments where aid is given after the UK has developed a database. However, you should take steps to ensure that you have the necessary processes and procedures in place to collect the required information.

http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm

http://ec.europa.eu/competition/mergers/cases/index/nace_all.html

Step 5 – Check you are registered for annual return monitoring

Write to the Welsh Government’s State Aid Unit to tell them which registration

you are using providing a contact name, telephone number and email address.

The State Aid Unit need this information because they co-ordinate the annual

return monitoring process for Wales. They need to have a contact for each

organisation that is providing funding under a registered GBER Regional Aid

scheme. The State aid email address is:

[email protected]

The Postal address is:

Sian Brown State Aid Unit Welsh Government Cathays Park 2 Cardiff CF10 3NQ


Annex 1- Checklist A - Aid for research and development projects

Information about the company/enterprise assisted

Confirm size of the enterprise

SME or large enterprise

Confirm that the enterprise assisted is NOT in one of the following sectors:

Processing and marketing of agricultural products where (1) the amount of aid if fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the SME concerned or (2) the aid is conditional on being partly or entirely passed on to the primary producers

Confirm that the enterprise assisted is NOT subject to either of the following:

An outstanding order for the recovery of aid which has been declared by the Commission to be illegal and incompatible with the Common market;

“A firm in difficulty” within the meaning of Chapter 2 of the Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ C 244, 1.10.2004, p.2).

Information about the project

Confirm that no work started on the project prior to the application.

Confirm that the company submitted a written application including the following information before work started on the project:

(a) Name and size;

(b) Description of the project, including its start and end dates;

(c) Location of the project ;

(d) List of project costs;

(e) Form of and amount of public funding needed for the project.

Confirm what type(s) of research is being supported (each eligible cost must be

attributed to one of the following types of research)

Fundamental research;

Industrial research;

Experimental development;

Feasibility studies.

Fundamental research means:

Experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any direct commercial application or use in view.

Industrial research means:

The planned research or critical investigation aimed at the acquisition of new knowledge and skills for developing new products, processes or services or for bringing about a significant improvement in existing products, processes or services. It comprises the creation of components parts of complex systems, and may include the construction of prototypes in a laboratory environment or in an environment with simulated interfaces to existing systems as well as of pilot lines, when necessary for the industrial research and notably for generic technology validation.

Experimental development means:

Acquiring, combining, shaping and using existing scientific, technological, business and other relevant knowledge and skills with the aim of developing new or improved products, processes or services. This may also include, for example, activities aiming at the conceptual definition, planning and documentation of new products, processes or services; Experimental development may comprise prototyping, demonstrating, piloting, testing and validation of new or improved products, processes or services in environments representative of real life operating conditions where the primary objective is to make further technical improvements on products, processes or services that are not substantially set. This may include the development of a commercially usable prototype or pilot which is necessarily the final commercial product and which is too expensive to produce for it to be used only for demonstration and validation purposes. Experimental development does not include routine or periodic changes made to existing products, production lines, manufacturing processes, services and other operations in progress, even if those changes may represent improvements.

Information about the support

Confirm that support is NOT for any of the following activities:

Export related activities;

Aid contingent upon the use of domestic over imported goods;

For the closure of an uncompetitive coal mines;

exploiting R&D&I results in other Member States.

Confirm that the following restrictions do not apply

Companies are required to have their headquarters in the UK or to be predominantly established in the UK;

There company is restricted to only exploiting R&D&I results in the UK.

Confirm type of aid:

Grants;

Interest rate subsidies;

Loans;

Repayable advance;

Guarantee.

Information about eligible costs

Confirm eligibility of supported costs R&D projects (tick all that apply):

Personnel costs: researchers, technicians and other supporting staff to the extent that they are employed on the project.

Costs of instruments and equipment to the extent and for the period used for the project. When such instruments and equipment are not used for their full life for the project, only the depreciation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible.

Costs of buildings and land, to the extent and for the duration period used for the project. With regards to buildings, only the deprecation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible. For land, costs of commercial transfer or actually incurred capital costs are eligible.

Costs of contractual research, knowledge and patents bought or licensed from outside sources at arm’s length conditions, as well as costs of consultancy and equivalent services used exclusively for the project.

Additional overheads and other operating expenses, including the costs of materials, supplies and similar products, incurred directly as a result of the project.

Confirm eligibility of supported costs feasibility studies

The costs of the study.

Information about aid intensities

R&D Projects Confirm the total level of ALL public

funding (including structural funds) awarded and that it is within the permitted intensity levels

Small Medium Large

Fundamental 100% 100% 100%

Industrial 70% 60% 50%

Experimental development

45% 35% 25%

£ %

R&D Collaborative Projects/dissemination of results Confirm the total level of ALL public funding

(including structural funds) awarded and that it is within the permitted intensity levels

Small Medium Large

Industrial 80% 75% 65%

Experimental development

60% 50% 40%

£ %

The higher aid intensities can be used if one of the following conditions are met:

a) The project involves effective collaboration:

Between undertakings among which at least one is an SME or is carried out in at least two Member States or in a Member State and in a Contracting Party of the EEA Agreement, and no single undertaking bears more than 70% of the eligible costs; or

Between an undertaking and one or more research and knowledge-dissemination organisations where the latter bear at least 10% of the eligible costs and have the right to publish their own research results.

b) The results of the project are widely disseminated through conferences, publication, open access repositories, or free or open source software.

Feasibility studies Confirm the total level of

Small Medium Large

70% 60% 50%

£ %

ALL public funding

(including structural funds) awarded and that it is within the permitted intensity levels

Information about notification thresholds

Confirm that the aid is not more than (per undertaking, per project)

Basic threshold

Threshold for repayable advances

Threshold for Eureka projects

Predom Fundamental

€40m €50m €80m

Predom Industrial

€20m €30m €40m

Predom Experimental

€15m €22.5m €30m

Feasibility Studies

€7.5m €7.5m N/A

Predominantly Fundamental Research is where more than half of the projects eligible costs are incurred through activities which fall within the category of fundamental research;

Predominantly Industrial Research is where more than half of the projects eligible costs are incurred through activities which fall within the category of industrial research. Or within the categories of industrial research and fundamental research taken together;

Predominantly Experimental Development is where more than half of the projects eligible costs are incurred through activities which fall within the category of experimental development.

Information about reporting

Confirm that if the aid is above €500,000 you have collected the following information to input (when required) on the Member State database:



Type of company (SME or large) at time of granting;

Region in which the company is located at NUTS II level (annex 2 – has a list of NUTS II Areas);

Sector of activity at NACE group level – a list of NACE codes can be found at http://ec.europa.eu/competition/mergers/cases/index/nace_all.html;


Aid instrument (grant/Interest rate subsidy, loan, repayable advances/reimbursable grant, guarantee, tax advantage or exemption, risk finance, other (please specify);

Date of granting;

Objective of the aid;

Granting authority; Reference of the aid measure.

Confirm that you have provided contact name and information to [email protected]



Annex 1 – Checklist B -Investment aid for research infrastructures


Confirm size of the enterprise

SME or large enterprise

Confirm that the enterprise assisted is NOT in one of the following sectors:

Processing and marketing of agricultural products where (1) the amount of aid if fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the SME concerned; or (2) the aid is conditional on being partly or entirely passed on to the primary producers.

Confirm that the enterprise assisted is NOT subject to either of the following:






(a) Name and size;


(c) Location of the project;



Confirm that the research infrastructure will be open to several users on a non-discriminatory open and transparent basis.

Confirm that if a company will be given preferential access the following conditions are met

They have financed at least 10% of the infrastructure;

Access is proportional to their contribution;

The conditions are publicly available.

Confirm that the price charged for the operation or to use the infrastructure will correspond to the market rate.


Confirm that support is NOT for any of the

following activities:






Companies are required to have their headquarters in the UK or to be predominantly established in the

UK;



Grant;


Loans;

Repayable advance;

Guarantee.


Confirm eligibility of supported costs

The investment costs in tangible and intangible assets.


Confirm the total level of ALL public funding (including structural funds) awarded and that it is within the permitted intensity levels

Up to 50% of eligible costs £ %

Confirm that where a research infrastructure receives public funding for both economic and non-economic activities, a monitoring and claw-back mechanism will be put in place to ensure that the applicable aid intensity is not exceeded as a result of an increase in the share of economic activities compared to the situation envisaged at the time of the awarding aid.


Confirm that the aid is not more €20 million per infrastructure.










Date of granting;


Granting authority;





Annex 1 – Checklist C -Aid for innovation clusters


Confirm location of the enterprise (see annex 2 for areas)

Article 107 3 (a) Article 107 3 (c) Non-assisted

Confirm that the enterprise assisted is NOT in one of

the following sectors:

Processing and marketing of agricultural products where: (1) the amount of aid if fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the SME concerned; or (2) the aid is conditional on being partly or entirely passed on to the primary producers.

Confirm that the enterprise assisted is NOT subject to

either of the following:






(a) Name and size;





Confirm that the cluster’s premises, facilities and activities will be open to several users on a non-discriminatory open and transparent basis.

Confirm that if a company will be given preferential access the following conditions are met:

They have financed at least 10% of the infrastructure;

Access is proportional to their contribution;

The conditions are publicly available.

Confirm that the price charged for the operation or to use the infrastructure will correspond to the market rate.


Confirm that support is NOT for any of the

following activities:





Confirm that the following Companies are required to have their headquarters

restrictions do not apply in the UK or to be predominantly established in the UK;



Grant;


Loans;

Repayable advance;

Guarantee.

Confirm that the support will be provided exclusively to the legal entity operating the cluster.


Investment aid Confirm eligibility of supported costs:

The investment costs in tangible and intangible assets.

Operating aid Confirm eligibility of supported costs (tick all that apply):

Personnel costs

Administrative costs

Overhead costs relating to:

Animation of the cluster to facilitate collaboration, information sharing and the provision or channelling of specialised and customised business support services;

Marketing of the cluster to increase participation of new undertakings or organisations and to increase visibility;

Management of the cluster’s facilities; organisation of training programmes, workshops and conferences to support knowledge sharing and networking and transnational cooperation.

Confirm that length of time the operating aid will be awarded for (this plus any previous operating aid should be less than 10 years).


Investment aid Confirm the total level of ALL public

funding (including structural funds) awarded and that it is within the permitted intensity levels:

Clusters in 107 3 (a) areas 65%

Clusters in 107 3 (c) areas 55%

Clusters in non-assisted areas

50%

£ %

Operating aid Confirm the total level of ALL public funding (including structural funds) awarded and that it is within the permitted intensity levels:



Confirm that the aid is not more €7.5 million per cluster.










Date of granting;


Granting authority;





Annex 1 – Checklist D - Innovation aid for SMEs


Confirm the enterprise is an SME.







“a firm in difficulty” within the meaning of Chapter 2 of the Community guidelines on State aid for rescuing and restructuring firms in difficulty (OJ C 244, 1.10.2004, p.2).




(a) Name and size;















Grant;

Interest rate subsidy;

Loan;

Repayable advance;

Guarantee.


Confirm eligibility of supported costs (tick all

Costs for obtaining, validating and defending patents and other intangible assets;

that apply) Costs for secondment of highly qualified personnel from a research and knowledge-dissemination organisation or a large enterprise, working on research, development and innovation activities in a newly created function within the beneficiary and not replacing other personnel;

Costs for innovation advisory and support services.



Up to 50% of eligible costs (this can be increased to 100% of costs as long as the total amount does not exceed €200,000 per undertaking within a 3 year period.

£ %


Confirm that the aid is not more €5 million per undertaking, per project.










Date of granting;


Granting authority;





Annex 1 – Checklist E - Aid for process and organisational innovation


Confirm the size of the enterprise:

Small, medium or large

If a large company is assisted confirm that they are collaborating with and SME and the SME will incur at least 30% of the eligible costs.



Processing and marketing of agricultural products where: (1) the amount of aid if fixed on the basis of the price or quantity of such products purchased from primary producers or put on the market by the SME concerned; or (2) the aid is conditional on being partly or entirely passed on to the primary producers.







Confirm that the company submitted a written application including the following information before work started on the project: (a) Name and size;















Grant;


Loan;

Repayable advance;

Guarantee.


Confirm eligibility of supported costs (tick all that apply)

Personnel costs;

Costs of instruments, equipment, buildings and land to the extent and for the period used for the projects;

Costs of contractual research, knowledge and patents bought or licensed from outside sources at arm’s length conditions;

Additional overheads and other operating costs, including costs of materials, supplies and similar products, incurred directly as a result of the project;



Large enterprises 15%

SMES 50%

£ %


Confirm that the aid is not more €7.5 million per undertaking, per project.










Date of granting;


Granting authority; Reference of the aid measure.




Annex 1 – Checklist F - Aid for research and development in the fishery and

aquaculture sector


Confirm that the enterprise is in the fishery and aquaculture sector.











(a) Name and size;





Confirm that prior to the date the aided project starts the following information will be published on the internet

That the aided project will be carried out;

The goals of the aided project;

The approximate date of the publication of the results expected from the aided project and its place of publication on the internet;

A reference that the results of the aided project will be available to all undertakings active in the particular sector or sub-sector concerned at no cost.

Confirm the results of the project will be made available on the internet from the date the project ends or from when the results are given to members of a particular organisation (whichever is earlier).

Confirm the results will remain on the internet for 5 years after the end date of the project.

Confirm that aid will be granted directly to the research and knowledge-dissemination organisation and will not involve the direct granting of non-research related aid to an undertaking producing, processing or marketing fishery or aquaculture products.











Grant;


Loan;

Repayable advance;

Guarantee.


Confirm eligibility of supported costs R&D projects (tick all that apply):

Personnel costs: researchers, technicians and other supporting staff to the extent that they are employed on the project;

Costs of instruments and equipment to the extent and for the period used for the project. When such instruments and equipment are not used for their full life for the project, only the depreciation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible;

Costs of buildings and land, to the extent and for the duration period used for the project. With regards to buildings, only the deprecation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible. For land, costs of commercial transfer or actually incurred capital costs are eligible;

Costs of contractual research, knowledge and patents bought or licensed from outside sources at arm’s length conditions, as well as costs of consultancy and equivalent services used exclusively for the project;

Additional overheads and other operating expenses, including the costs of materials, supplies and similar products, incurred directly as a result of the project.













Date of granting;


Granting authority;





Annex 2

NUTS II areas in Wales

West Wales and the Valleys 107 3 (a) areas

Blaenau Gwent

Bridgend

Caerphilly

Carmarthenshire

Ceredigion

Conwy

Denbighshire

Gwynedd

Isle of Anglesey

Merthyr Tydfil

Neath Port Talbot

Pembrokeshire

Rhondda Cynon Taff

City and County of Swansea

Torfaen

*East Wales 107 3 (c) areas

Cardiff

Flintshire

Newport

Powys

Vale of Glamorgan

Wrexham

*Monmouthshire is also part of East Wales, however it is not currently an area

covered by the UK assisted areas map.

An introduction to Assisted Areas and Regional aid can be found at:

https://www.gov.uk/government/publications/state-aid-assisted-areas-introduction

An interactive UK Assisted Areas map can be found at:

http://www.ukassistedareasmap.com/ieindex.html

The UK Government has developed a post code search tool that can be used to

identify if a company is in an assisted area. It can be found at:


https://www.gov.uk/government/publications/state-aid-assisted-areas-introduction



How to use a GBER Research and Development and Innovation ...

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