Do research vouchers from Maastricht University constitute State aid?

In a decision of 19 February 2019, the Trade and Industry Appeals Tribunal (CBb) appears to rule that the research vouchers that Maastricht University had issued to an unspecified legal entity constituted State aid. A judgment with potentially far-reaching consequences.

The case

In 2011 the AgentschapNL (now RVO, the Netherlands Enterprise Agency), acting on behalf of the Minister of Economic Affairs (Minister), had granted X B.V. (reaearch has shown   that it probably concerns “life science company” Newtricious B.V.), a subsidy for the clinical development project NWT 03 in the form of a credit of € 640,701. In 2013, the Minister increased the credit to a maximum of € 1,399,771. Three years later, however, the Minister reduced the credit to € 712,207, -, since X B.V. would have received a subsidy of € 456,025 “from another administrative body, Maastricht University (MU)” for the same project. According to the Minister, this constituted “unlawful cumulation of subsidies”. Because € 1,005,803 had already been paid to X B.V. as an advance payment, the Minister reclaimed € 293,596 as unduly paid. X B.V. objected to both the reduction of the subsidy and the recovery.

The Minister declared X B.V.’s objection unfounded and sustained both the reduction of the subsidy and the recovery. The Minister did, however, amend his reasoning. Based on the judgment, the Minister took the position that he had reduced the subsidy, since X B.V. had received, in addition to his credit, “funds to be regarded as state aid” for the same project from:

(i) MU in the form of research vouchers (€ 820,000);
(ii) N.V. Industriebank Limburgs instituut voor ontwikkeling en financiering (LIOF) in the form of equity participations (€ 630,948.10);
(iii) Beheer Innovatiefonds Provincie Limburg B.V. in the form of equity participations (€ 577,234.30).

In the Minister’s view, as a result, the maximum aid intensity of 60% as stipulated in the “European aid framework” was exceeded. X B.V. lodged an appeal with the CBb against the declaration that its objection was unfounded.

Judgment of the CBb

The Minister had not provided his decision on the objection with a calculation and setting of the subsidy and the recovery adjusted to the amended reasoning. Consequently, the CBb only examines whether the funds obtained by X B.V. “from UM cannot be regarded as a subsidy”. X B.V. had invoked this as a ground for appeal.

The CBb notes that MU had issued research vouchers to X B.V. up to a maximum amount of € 820,000. X B.V. could use these vouchers as compensation for the scientific research that MU was to carry out for, among other things, the project in question. After submitting a voucher, MU converted the amount corresponding to the voucher into an interest-bearing loan at the expense of X B.V. The total loan would eventually be waived by MU provided X B.V. would have:

(i) recruited and hired research related personnel for ten man years;
(ii) purchased paid research (research & development) from MU for an amount equaling twice the value of the submitted vouchers (i.e. for € 1,600,400); or
(iii) achieved a combination of (i) and (ii).

Subsequently, the CBb states “that MU is a legal entity established under public law and that State resources are being used. In view of the subordinated nature of the loan, the absence of a repayment schedule and the planned waiving of the subordinated loan under the conditions stated, the [CBb] is of the opinion that in this case UM granted X B.V. a subsidy“. This subsidy could be taken into account by the Minister when setting the amount of his subsidy. X B.V.’s appeal is therefore dismissed as unfounded.


The present judgment is intriguing: does the CBb really say that research vouchers from MU constitute State aid?

The CBb itself does not refer to State aid, but to “subsidy“. It was the Minister who invoked the state aid rules to adjust the subsidy granted to X B.V. downwards. Instead of referring to a “claim to financial resources, provided by an administrative body” in accordance with the definition of “subsidy” in article 4:21 paragraph 1 of the General Administrative Law Act (Awb) (as the Minister initially did), the CBb considers that MU is a “legal entity established under public law” that has used “state resources“. This points in the direction of State aid. After all, according to Article 107(1) TFEU state aid is involved if (i) an undertaking has received a selective advantage (ii) granted by the State through State resources (iii), which (iv) distorts competition and (v) affects trade between Member States.

If in the present case the CBb has indeed investigated whether the research vouchers of the UM qualify as State aid, then the test seems to have been incomplete. It looks as if only the third criterion was examined. It is therefore questionable whether the other four criteria are met. If the answer is in the affirmative, then the question is whether the assessment against the third criterion has been carried out in accordance correct. In view of the Doux Élevage judgment (paragraph 33), this criterion must first be assessed in terms of whether the entity which granted the (alleged) aid is part of the “State administration”. If this is not the case, it must then be determined whether the advantage (i) was financed through State resources and (ii) whether the granting of the advantage is imputable to the State.

The CBb ruling may have far-reaching consequences if we indeed have to assume that a “legal person established under public law” is automatically part of the “State administration”. Indeed, when such a legal entity confers an advantage, it can very quickly constitute State aid. In this context, see, for example, marginal 39 of the Notice on the notion of State aid.

door | 25 februari 2019 | Staatssteun

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