Source: Dispatch of the Federal Council on the Bilateral III package, Chapter 2.2.6 (pp. 153–164)
PDF of the Dispatch
The international law provisions on state aid form the core of aid monitoring in the Switzerland–EU package. They define what constitutes state aid, establish a prohibition in principle with extensive exceptions, and regulate the monitoring system according to the two-pillar approach. The central point is that the aid definition largely corresponds to Art. 107(1) TFEU but is narrower: it applies only within the scope of the respective agreements. The Swiss system must be equivalent to the EU system, but not identical.
The aid provisions pursue a clear objective:
The definition is based on Art. 107(1) TFEU but is specifically tailored to the agreement context:
| No. | Criterion | Explanation |
|---|---|---|
| 1 | State resources | Aid granted by the State or through state resources (Confederation, cantons, municipalities, public undertakings) |
| 2 | Selectivity | Advantage granted to certain undertakings or productions |
| 3 | Distortion of competition | Actual or potential distortion of competition |
| 4 | Effect on trade | Impact on trade between the contracting parties within the scope |
The fourth criterion (“effect on trade”) refers only to trade within the scope of the respective agreement – not to the entire internal market. The Swiss definition is thus narrower than the EU definition.
State aid fulfilling all four criteria is in principle incompatible with the proper functioning of the agreements concerned.
The prohibition is qualified by extensive exceptions:
| Category | Description |
|---|---|
| Natural disasters | Aid to make good the damage caused by natural disasters or extraordinary events |
| Economic development | Promotion of economic development of regions with a low standard of living |
| Common interest | Projects of common interest of both contracting parties |
| Climate and environment | Aid for climate protection, environmental protection, energy efficiency |
| Research | Promotion of research, development and innovation |
| Cultural promotion | Preservation of cultural heritage, promotion of cultural activities |
| De minimis | Small-scale aid below the thresholds |
| GBER categories | Aid exempt from notification under the block exemption |
Aid below the de minimis threshold is considered not to distort competition:
The monitoring system is structured according to the two-pillar model:
The Swiss system must be equivalent to the EU system – this means:
The aid provisions contain comprehensive transparency obligations:
A separate procedure applies to aid already in existence:
The integration of EU legal acts on state aid follows a special equivalence mechanism:
The entry into force of the aid provisions is linked to the stabilisation component of the overall package:
| Aspect | Details |
|---|---|
| Objective | Level Playing Field in 3 sectors |
| Definition | Like Art. 107 TFEU, but narrower (only agreement scope) |
| Principle | Prohibition with extensive exceptions |
| Equivalence | CH system equivalent, not identical |
| Transparency | Comprehensive publication obligations |
| Existing aid | 5-year transitional period, prima facie assessment |
| EU law adoption | Special equivalence mechanism |
| Entry into force | Linked to stabilisation component |