Karanovic & Nikolic

Council for State Aid in BiH holds inaugural meeting

The inaugural meeting of the Council for State Aid in BiH (the ‘council’), a body formed thanks to the Law on State Aid in Bosnia and Herzegovina (the ‘law’), was held at the end of last year.

The council, which sits in Istocno Sarajevo, has eight members.

At the meeting, members of the council elected chairman and two vice-chairmen and adopted procedural rules. The beginning of the council’s operations should enable the consistent application of the law on the territory of BiH.

State aid control is an essential component of competition policy and a necessary safeguard for effective competition and free trade. State aid should be aimed at a well-defined objective of a common interest (such as growth, employment and so on) or at correcting a market failure, where the market alone cannot guarantee sustainability. However, one-off payments to individual undertakings or sectors, particularly those in difficulty, in terms of the rescue and restructuring aid, should be made in exceptional, well-justified cases, where aid is necessary for the restoration of long-term viability in the marketplace.

The law regulates the general requirements for the awarding of state aid, control of awarding and the use of state aid, as well as the approval and the return of illegally granted state aid.

The law is aimed at business entities that participate in the market through the production, i.e. trade of goods or services. It is significant that the law does not apply to state aid in the agriculture and fisheries sectors, as well as to public spending on infrastructure.

In the upcoming period the adoption of bylaws that will enable the implementation and enforcement of the law are planned.

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