Ministry of Treasury Aid granted by the Minister of the Treasury for rescue and restructuring (monetary aid in restructuring processes) - Monetary aid in restructuring processes -

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Monetary aid in restructuring processes

Aid granted by the Minister of the Treasury for rescue and restructuring (monetary aid in restructuring processes)

Pursuant to the provisions of the Act of August 30, 1996 on Commercialisation and Privatisation (Journal of Laws No. 171 / 2002, item 1397 with subsequent amendments), 15 % of privatisation revenues generated in a given budgetary year shall be allocated for rescue and restructuring aid for entrepreneurs, including entrepreneurs scheduled for privatisation (cf. art. 56 par. 1.2 of the Act setting up State earmarked fund under the name of the Fund for Entrepreneurs’ Restructuring). Expenditure of those funds, with the aim of granting aid to entities undergoing restructuring, falls within the scope of competences of the Minister of the Treasury who is the disposer of the Fund for Entrepreneurs’ Restructuring, which implements the tasks referred to above partly through the Industrial Development Agency (Agencja Rozwoju Przemysłu S.A.), annually increasing its initial capital by the amount constituting 1/3 of the Fund’s revenues (cf. art. 56 par. 2 and 5 of the Act).

As a result, on the basis of the funds accounting for 15% of revenues generated by privatisation, the Minister of the Treasury and the Industrial Development Agency can grant state rescue and restructuring aid, while the above-mentioned provisions of the Act on Commercialisation and Privatisation and the Act on the Principles of Implementation of Treasury Powers (cf. art. 2 item 8a) establish the division of competences between those two aid bodies indicating that:

  • The Minister of the Treasury is authorised to grant aid to state enterprises, companies with Treasury shareholding and companies which lease Treasury assets – provided that they are, at the same time, small or medium-sized entrepreneurs as defined by EU legal regulations,
  • The Industrial Development Agency implements the aid referred to above for so-called “large” entrepreneurs (irrespectively of the ownership criterion, i.e. whether it is a public or private entrepreneur).

Major complications as regards functioning of the rescue and restructuring aid system shaped in such a manner resulted in changes which were introduced to the Community definition of a small and medium-sized entrepreneur. The changes were enacted on January 1, 2005 and they consist in the exclusion from the category of small and medium-sized entrepreneurs of all entities in which 25% or more capital is controlled, directly or indirectly, jointly or separately, by one or several state bodies. Consequently (taking into account the current wording of art. 2 item 8a of the Act on the Principles of Implementation of Treasury Powers), competences of the Minister of the Treasury to grant rescue and restructuring aid to public entrepreneurs, i.e., inter alia, to companies with majority Treasury shareholding, as well as to state enterprises have been curtailed (de facto that aid can be granted exclusively to companies which use Treasury assets for consideration and companies in which Treasury shareholding does not exceed 25 % - provided those entities meet the remaining criteria for a small or medium-sized entrepreneur).

Therefore it became necessary to embark on legislative initiatives aimed at amendment of the acts referred to above (the Act on the Change of the Act on Commercialisation and Privatisation and the Act on the Principles of Implementation of Treasury Powers).

The intended changes to the aforementioned acts consist in:

  • Extension of the catalogue of entities entitled to benefit from aid to all state enterprises and companies with Treasury shareholding, irrespectively of the size criterion, while, at the same time, excluding from the group of potential beneficiaries companies which use Treasury assets for consideration (they can take advantage of different forms of non-cash aid, available because of the decision of the European Commission approving the program of aid for restructuring granted to the companies referred to above in privatisation processes).

  • Enabling allocation of the funds held by the Fund for Entrepreneurs’ Restructuring for ownership activity, i.e. under the framework of support not constituting state aid under art. 87 of the EC Treaty and not subject to procedures of obligatory notification to the European Commission (before the funds are transferred to the entrepreneur).

The amendment referred to above is currently at the stage of parliamentary work (parliamentary paper No. 27).

By the time it has been approved, the Minister of the Treasury can only grant rescue and restructuring aid to small or medium-sized entrepreneurs according to the principles set forth by the Ordinance of the Minister of the Treasury of January 30, 2006 on rescue and restructuring aid. In the case when the above-mentioned legislative changes extending the catalogue of entities entitled to benefit from aid, the ordinance referred to above will be amended and notified to the European Commission as an aid program.

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Published by: Rafał Kałęcki
Author: State Aid Office
Last change: 17.03.2006
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