Considerations regarding the attributions of the prefect in the field of state aid

• Author: Irina Alexe, PhD.
• Pages: 120-132

120 Irina Alexe

CONSIDERATIONS REGARDING THE ATTRIBUTIONS

OF THE PREFECT IN THE FIELD OF STATE AID

Irina ALEXE, PhD.1

Abstract

In recent years the prefect (in his capacity as representative of the Government at the local

level) gained tasks relating to domestic proceedings in the field of state aids granted by local

government authorities to various beneficiaries. The article aims at establishing to what extend

this procedure (which is part of the domestic proceedings concerning the appropriateness analysis

that is carried, prior to notification procedure to the European Commission by the national

authority, by the Competition Council), is liable to affect the way the prefect carries out the

legality review for acts issued by local administrative authorities.

Keywords: State aid; the prefect; domestic procedure prior to notification; appropriateness

analysis, legality review

1. Short introduction

The 1st of January 2017, Romania celebrated a decade since the adhesion to

the European Union. This celebration provided the opportunity to analyse a

punctual issue, in the context of the mutations and evolutions incurred within

the society, as well as the European and national law institutions. The analysis

concerns the role of the Prefect, national authority invested by the Romanian

state, in an internal procedure – the state aid – that might however generate

effects at the level of the European Union, because of its articulation with the

European Union law.

Our goal is to refer to the internal procedure regarding the state aid granted

to beneficiaries at the initiative of local public administration authorities, in order

to observe whether it affects or not the exertion of the legality review by the

prefect towards the acts of the local public administration.

The first part of this paper will provide a detailed account of the normative

framework through which, at the level of the European Union, the rules of

1 Research associate, ”Acad. Andrei Rdulescu” Legal Research Institute of Romanian Academy;

Doctor of Juridical Sciences of the University of Bucharest; principal areas of interest: Administrative Law,

Constitutional Law and European Law; irina_alexe@yahoo.com. The paper was presented in the Annual

Research Colloquium ”10 years from the adhesion of Romania to the European Union. Its impact on the

evolution of the Romanian Law”, organized in Bucharest, the 31st of March 2017 by the Romanian Academy

- Acad. Andrei Rdulescu” Legal Research Institute of Romanian Academy. The author would like to thank

Mr. Bogdan opan for the support offered in translating the article in English. The article was published in

Romanian in Curierul Judiciar, no. 4/2017.

Law Review  vol. VII, issue 2, Jul

y

-December 2017, pp. 120-132

Considerations regarding the attributions of the prefect in the field of state aid 121

procedure regarding the state aid have been established. In a second part, the

research will be focused upon the internal regulation regarding the state aid,

then we will emphasize the role of the prefect in the internal procedure of

granting state aid, and, as a conclusion, we will analyse the nature of the

underlying legislative changes in the matter, finalizing the present analysis with

a few brief conclusions.

2. Considerations regarding the state aid in the European Union law

The European Union’s policy in the field of competition, founded on free,

undistorted competition, is essential to the functioning of the internal market and

is based, together with the fight against anti-competitive agreements between

companies functioning within the internal market of the EU, on the prevention of

the abuse of dominant position and the control of the aid provided by the state

or throughout state resources.

What do these aids, generically called state aids, consist in and why would

such a control be necessary?

The answer lies in the states’ attempts to allocate budgetary resources in

order to support or to develop certain domains of activity or local enterprises2,

detrimental to other, affecting thus the free competitions on the EU market. The

very Preamble of the Treaty on the Functioning of the European Union (TFEU)3

shows that „removal of existing obstacles calls for concerted action in order to

guarantee steady expansion, balanced trade and fair competition”, and from the

text of art. 3(1)b from TFEU it results that the branch aiming at the

establishment of the norms regarding competition, necessary to the

functioning of the internal market, are an exclusive competency of the Union.

Hence, the Treaty regulates the regime of state aid at a primary level,

relevant provisions being presented within art. 107-109 TFEU4.

According to the provisions of art. 107, ”any aid granted by a Member State

or through State resources in any form whatsoever which distorts or threatens to

distort competition by favouring certain undertakings or the production of

certain goods shall, in so far as it affects trade between Member States, be

incompatible with the internal market”, the text providing thus ground for the

mutually compatible aid categories, respectively those who are compatible with

the internal market. From the content of the article it can be observed that

exemptions from the principle of incompatibility exist, according to whom

2 For a clear distinction between an enterprise and a commercial society, please refer to Şandru

D.M., Dreptul societilor în Romania: manual elementar, ediia a 3-a revzut, Editura Universitar,

Bucureşti, 2017, p. 15-19.

3 Consolidated version of the Treaty on the Functioning of the European Union (TFEU) has

been published in the Official Journal of the European Union, C 326, of 26 October 2012.

4 Article 107(ex article 87 TCE), article 108 (ex article 87 TCE) and article 109 TFEU (ex article 87

TCE).

122 Irina Alexe

state aid is or may be compatible with the internal market, but those situations

imperatively require the control by the European Commission on a case-by-

case basis. The review procedure is provided by the article 108 TFEU, while

according to article 109 TFEU ”The Council, on a proposal from the Commission

and after consulting the European Parliament, may make any appropriate

regulations for the application of Articles 107 and 108 and may in particular

determine the conditions in which Article 108(3) shall apply and the categories of

aid exempted from this procedure.”

It should be emphasized that the state aid procedure within the European

Union suffered successive reforms and several acts have been adopted5 -

regulations, directives, orientations, communications, resolutions and guidelines

which constitute the secondary legislation on this matter, without offering

further details within this analysis, for the sake of relevance, the underlying topic

being treated extensively in the doctrine6. One of the most important regulations

regarding the enforcement of the provisions of article 108 TFEU, concerning

the control procedure is constituted by the Rule (EU) 2015/1589 of the Council,

of 13 July 2015, concerning the establishment of the application norms of article

108 from the Treaty on the Functioning of the European Union7, which replaced

the former regulation on the matter8.

It is nonetheless important to reiterate art. 108 TFEU, which states clearly that

the competence to permanently review all the regimes of aid in place in the

member states lies with the European Commission, together with the member

states, and if, after having fulfilled the procedures “the Commission finds that

aid granted by a State or through State resources is not compatible with the

internal market having regard to Article 107, or that such aid is being misused, it

shall decide that the State concerned shall abolish or alter such aid within a

5 For a clear distinction between the normative and legislative acts of the European Union

please refer to Banu C.M., Introducere. Directiva – act de dreptul Uniunii Europene, in Şandru D.M.,

Banu C.M., Clin D.A., Directiva - Act de dreptul Uniunii Europene şi dreptul român, Editura

Universitar, Bucureşti, 2016, p. 27-28.

6 For example, please refer to, Craig P., de Burca G., Dreptul Uniunii Europene. Comentarii,

jurispruden şi doctrin, ediia a IV-a, Editura Hamangiu, Bucureşti, 2009, p. 1353-1385; Lazr I.,

Dreptul Uniunii Europene în domeniul concurenei, Editura Universul Juridic, Bucureşti, 2016, p. 370-

384; Schoenmaekers S., Devroe W. and Philipsen (ed.), State Aid and Public Procurement in the

European Union, Intersentia, Cambridge, 2014, p. 1-44. For example, to what concerns state aids in

France, as well as the inherent procedure please refer to the activity report of the Office of Legal

Affairs (from the French Ministry of Economy), Vade-mecum des aides d'État- Edition 2016, published

on the 23 January 2017, available at http://www.economie.gouv.fr/daj/vade-mecum-aides-etat-

edition-2016-format-pdf, accessed on 15 February 2017.

7 Council Regulation 2015/1589 (EU), of 13 July 2015, laying down detailed rules for the

application of Article 108 of the Treaty on the Functioning of the European Union, published in the

Official Journal of the European Union, L 248, 25 September 2015.

8 Council Regulation 659/1999 (EC), of 22 March 1999, detailed rules for the application of

Article 108 of the Treaty on the Functioning of the European Union (state aid), published in the

Official Journal of the European Union, L83, 27 March 1999.

Considerations regarding the attributions of the prefect in the field of state aid 123

period of time to be determined by the Commission” bearing also in mind that ”

if the State concerned does not comply with this decision within the prescribed

time, the Commission or any other interested State may, in derogation from the

provisions of Articles 258 and 259, refer the matter to the Court of Justice of the

European Union direct”. Also, ”the Commission shall be informed, in sufficient

time to enable it to submit its comments, of any plans to grant or alter aid” and if

”it considers that any such plan is not compatible with the internal market

having regard to Article 107, it shall without delay initiate the procedure

provided for in paragraph 2 (art. 108, TFEU), and ”the Member State concerned

shall not put its proposed measures into effect until this procedure has resulted

in a final decision”9.

It may be advanced, under the incidence of these hypotheses, the issue of the

failure to fulfil the due obligations by a member state, which can lead to the

implementation of the provisions of articles 258-260 TFEU, while article 148 from

the Romanian Constitution, amended in 200310 establishes the guarantor

authorities that must guarantee the fulfilment of the obligations deriving from

the adhesion to the founding treaties of the European Union and their revisions11.

These are the Parliament, the President of Romania and the judiciary.

In order to avoid the non-fulfilment of the due obligations by the member

states and to ensure the respect of procedures established by the TFEU, the text

provides, as shown previously, the split of a part of the procedure between the

Commission and the member states, assigning the member states with the task

of constantly reviewing their state aid regimes. In Romania, the institution in

charge of this control is the Competition Council. Also, in Chapter X of the

Council Regulation (EU) 2015/1589, quoted earlier, the article 29, named

”Cooperation with National Courts” establishes the rules of cooperation of the

Commission with the national courts of the member states, for the application of

article 107(1) and article 108 TFEU.

9 For further details regarding the direct effect of the European law, please refer to, de Witte B.,

Direct effect, primacy and the nature of the legal order, in Craig P., de Burca G., The evolution of EU LAW,

2nd edition, Oxford University Press, Oxford, 2011, p. 323-362; Schütze R., Dreptul constituional al

Uniunii Europene, Editura Universitar, Bucureşti, 2012, p. 303-306. Also, Banu C.M., op. cit., p. 14

and footnote 7.

10 The Constitution of Romania has been republished in the Official Journal of Romania, Partea

I, nr. 767 of 31 October 2003 (TN: available in English at http://www.cdep.ro/pls/dic/site.page?

id=371, accessed on 3 May 2017).

11 For a relevant analysis of the issue of Romanian authorities and institutions potentially

responsible for the ascertainment of the lack of fulfilling of the obligations please refer to Şandru

M.D., Autoritile potenial responsabile ale unui stat membru în situaia constatrii neîndeplinirii

obligaiilor de ctre Curtea de Justiie, in Blan E., Iftene C., Vcrelu M., Administraia public în situaii

de criz/Public administration’s action in unforseen circumstances, Editura Wolters Kluwer, Bucureşti,

2015, p. 49-56.

124 Irina Alexe

3. Considerations regarding the state aid in Romania

The old national regulation regarding state aid, based on the Law

n. 143/199912, was abrogated through the Government Emergency Ordinance

n. 117/200613 as a consequence of the EU accession, since its provisions would

have contravened to the Treaty of Rome (EEC), as the Community legislation

became directly applicable in Romania after the accession.

Together with the reform of the European legislation regarding state aid, a

revision of the national legislation was necessary, therefore, starting with the 1st

of January 2015, the Government Emergency Ordinance n. 77/201414, a new

regulation regarding the national procedure in the field of state aid entered into

force, its provisions being the subject of this brief analysis. The rationale of

urgency of the normative act has been motivated by the issuing Government

throughout the necessity of the harmonization between the national and the

European legislation in order to have a framework guaranteeing the fulfilment

of ex-ante conditionalities for accessing European funds in the 2014-2020

programming period. Another reason invoked in order to justify the emergency

was that the European reform in the field of state aid intended to verify most

state aid facilities nationally, followed by an ex-post control by the European

Commission in order to ensure the respect of the conditions imposed by the

European Union on this matter. Meanwhile, the implementation of a national

control mechanism establishing the attributions and obligations of the

suppliers, beneficiaries and of the Competition Council in implementing state

aid measures was sought, in order to facilitate the absorption of European

funding and to avoid fund recovery.

The chosen regulation formula, the one of a Government Emergency

Ordinance will not be a part of the analysis, given the fact that the doctrine15 and

12 Law n. 143/1999 regarding the state aid, republished in the Official Journal of Romania, Part

I, no. 1.080 of 19 November 2004, in force between 1 January 2000 – 31 December 2006 (In original:

Legea nr.143/1999 privind ajutorul de stat, republicat în Monitorul Oficial al României, Partea I,

nr. 1.080 din 19 noiembrie 2004, a fost în vigoare în perioada 1 ianuarie 2000 - 31 decembrie 2006).

13 Government Emergency Ordinance n. 117/2006 regarding national procedures in the field

of state aid has been published in the Official Journal of Romania, I Part, nr. 1.042 of 28 December

2006 and entered into force at 1 January 2007. Has been abrogated with amendments by Law nr.

137/2007. It is currently abrogated. (In original: Ordonana de urgen a Guvernului nr. 117/2006

privind procedurile naionale în domeniul ajutorului de stat a fost publicat în Monitorul Oficial al

României, Partea I, nr. 1.042 din 28 decembrie 2006 şi a intrat în vigoare la data de 1 ianuarie 2007.

A fost aprobat cu modificri şi completri prin Legea nr. 137/2007. În prezent este abrogat.).

14 Government Emergency Ordinance n. 77/2014 regarding national procedures in the field of

state aid, as well as the amendments of the Competition Law n. 21/1996 has been published in the

Official Journal of Romania, Part I, n. 893 of 9 December 2014. (In original: Ordonana de urgen a

Guvernului nr.77/2014 privind procedurile naionale în domeniul ajutorului de stat, precum şi

pentru modificarea şi completarea Legii concurenei nr. 21/1996 a fost publicat în Monitorul

Oficial al României, Partea I, nr. 893 din 9 decembrie 2014).

15 Please refer to Apostol Tofan D., Tnsescu E. S., comentariul la articolul 115 – Delegarea

legislativ, în lucrarea Muraru I., Tnsescu E.S., Constituia României - Comentariu pe articole, Editura

Considerations regarding the attributions of the prefect in the field of state aid 125

the jurisprudence of the Constitutional Court of Romania16 debated extensively

the constitutional boundaries and the practice of the last years when, following

the own administrative lack of capacity, the Government fell back to a

Government Emergency Ordinance17 in order to solve the issue. A study

following the analysis of the preamble and of the means of justification of the

Government Emergency Ordinances issued in 2014 aiming at transposing several

European directives, points out in its conclusions the principle of democracy,

according to whom the transposition of the European legislation throughout a

law would be preferable, as a result of pluralistic parliamentary debates, as well

the imperative of coherence, clarity and predictability of the transposition act,

being obvious that a law has a bigger degree of stability than a Government

Emergency Ordinance, which can be modified, completed, or even rejected

during the parliamentarian procedure18.

Such a situation regarding the modification and the completion of the initial

text may be observed in the case of the Government Emergency Ordinance

C.H. Beck, București, 2008, p. 1096-1097 şi 1103. Also, Apostol Tofan D., Tnsescu E. S., Ordonana

de urgen a Guvernului Delegare legislativ. Situaii excepionale. Lege de aprobare a ordonanei de

urgen. Camera decizional. Competena Curii Constituionale. Obiectul controlului de constituionalitate.

Control preventiv. Control extrinsec (C.C., Decizia nr. 255/2005, M. Of. nr. 511 din 16 iunie 2005), in

Curierul Judiciar nr. 10/2005, p. 25-33. Regarding the critics of the Emergency Ordinances regime

please see Vedinaş V., Drept administrativ, ediia a IX-a, revzut şi actualizat, Editura Universul

Juridic, Bucureşti, 2015, p. 388-392. Alexe I., Situaia extraordinar - temei sau pretext pentru puterea

executiv de a reglementa în domenii rezervate legii?, in Blan E., Iftene C., Vcrelu M., Administraia

public în situaii de criz/Public administration’s action in unforseen circumstances, Editura Wolters

Kluwer, Bucureşti, 2015, p. 128-135.

16 By the Decision of the Constitutional Court n. 255 of 11 Mai 2005, regarding the objection of

unconstitutionality against the Law of approval of the Government Emergency Ordinance

n. 100/2004 concerning the passing of forestry from the public ownership of the state and from the

administration of Romsilva (National Forestry Fund) to the property of the Archdiocese of Suceava

and Rduţi, were reaffirmed the conditions in which the Government may issue a Government

Emergency Ordinance.

17 Alexe I., Înalii funcionari publici, Editura Universul Juridic, Bucureşti, 2014, p. 246-251; also,

Alexe I., Consideraii referitoare la Decizia nr. 55/2014 a Curii Constituionale a României şi la statutul

juridic al unor înali funcionari publici, in Curierul Judiciar nr. 3/2014, p. 159-161; Alexe I., Reforma

reformei. Studiu de caz: Ordonana de Urgen a Guvernului nr. 82 din 2013 in Blan E., Iftene C.,

Vcrelu M., Reforma statului: instituii, proceduri, resurse ale administraiei publice, Editura Wolters

Kluwer, 2016, p. 121-133.

18 Alexe I., Banu C.M., Transpunerea directivei prin ordonan de urgen. Exemple recente din

dreptul român şi aspecte comparate în volumul Directiva - act de dreptul Uniunii Europene – şi dreptul

român, în volumul Şandru D.M., Banu C.M., Clin D.A., Directiva - Act de dreptul Uniunii Europene şi

dreptul român, Editura Universitar, Bucureşti, 2016, p. 132-174. Alexe I., Banu C.M., Transposition

and/or implementation of European Union law by means of Government Emergency Order. Requirements set

in the case-law of the Constitutional Court of Romania, Curentul juridic, Year XVIII, NO. 2 (61) 2015,

49-56.

126 Irina Alexe

n. 77/2014, as well as in the parliamentarian procedure of the invoked normative

act19.

The most important regulations brought by the Government Emergency

Ordinance are linked to the definition of state aid, of state sources and

resources, of beneficiaries, as well as to an ex-ante analysis of the opportunity

of state-granted supportive measures, including those initiated by the local

public authorities. Other measures may include the creation of databases for

granting state aid, in order to ensure transparency and to avoid state aid

accumulation, as well as fostering a more coherent competition policy by

compliance control and development of EU-funded projects. With regard to the

measures financed by the national authorities, a preliminary approval by the

Government should be granted. It also clarifies the role of the national instances

dealing with litigations in the field of state aid and it creates the premises for the

reestablishment of a good administrative conduct in granting state aid

especially with regard to aids initiated by the local public administration

authorities, in order to prevent further violations of EU norms and therefore to

avoid sanctions for Romania. As discussed previously, those clarifications were

also necessary following the modification of the cooperation framework between

the Commission and the national courts, by the mean of the new regulation from

2015.

The question we will concentrate this analysis upon concerns the internal

procedure of state aid, granted to the beneficiaries at the initiative of the local

public administration authorities. Thereby, the question is: to what extent this

procedure, inherent to the larger internal procedure of opportunity analysis20

(preliminary to the notification procedure of the European Commission by the

Competition Council), is affecting or not the exercise by the Prefect of the

legality review of the acts of the local public administration authorities.

4. The role of the Prefect in the internal procedure of granting state aids

The place and the role of the prefect as an authority within the Romanian

public administration framework has been largely discussed in the doctrine21,

19 Government Emergency Ordinance n. 77/2014, modified and amended, was approved by

the Law n. 20/2015, published in the Official Journal of Romania, Part I, n. 160 of 6 March 2015. (In

original: Ordonana de urgen a Guvernului nr.77/2014 a fost aprobat cu modificri şi completri

prin Legea nr. 20/2015, publicat în Monitorul Oficial al României, Partea I, nr. 160 din 6 martie

2015.)

20 To what concerns the administrative review please refer to Apostol Tofan D., Instituii

administrative europene, Editura C.H. Beck, Bucureşti, 2006, p. 199-204; Vedinaş V., Drept adminis-

trativ, op. cit., p. 147-156.

21 For example: Vedinaş V., Drept administrativ, op. cit., p. 500-514; Blan E., Prefectul şi prefectura

în sistemul administraiei publice, Editura Fundaiei „România de Mâine”, Bucureşti, 1997, p. 37; Gyorke

Z., Instituia prefecturii în perioada interbelic (1923-1938). Proiecii legislative, in Revista Transilvan de

Ştiine Administrative nr. 3(27)/2010, p. 79-96; Munteanu C.D., Administraia public teritorial , Editura

Universul Juridic, Bucureşti, 2010, p. 157-158; Alexe I., Categoria înalilor funcionari publici. Tendine

Considerations regarding the attributions of the prefect in the field of state aid 127

along with its main attribution, namely the exercise of the administrative

supervision22 regarding the acts of the public local administration authorities. In

this context, the article 123 of the Romanian Constitution should be underlined,

according to whom the Prefect may challenge, in the administrative court, an

act of the County Council, of a Local Council, or of a Mayor, in case he deems

it unlawful, while the act thus challenged shall be suspended de jure.

The question was raised following the fact that the Government Emergency

Ordinance n. 77/2014 and subsequently its approving law regulated a procedure

of informing the Prefect to what concerns the granting of state aids by local

public administration authorities. Therefore, according to the provisions of art. 7

of Government Emergency Ordinance n. 77/2014 ”in the case of a draft of

measures susceptible to be funded by local public authorities, in order to ensure

a high degree of coherence with Romanian economic and budgetary policies, the

establishment of state aid or de minimis measures will be done after an

opportunity analysis, which need to be accompanied by a notification addressed

to the institution of the Prefect and to the County Council regarding the

intention of establishment of the said aid measure.” The notification must

contain, according to art. 3(4) of the Government Emergency Ordinance n.

77/2014, the ”opportunity analysis realised according to the law”, which

imposes to the initiator or to the supplier, as appropriate, the elaboration of

some normative or administrative acts, according to whom are established the

state aid schemes or individual state aids or de minimis, which should stipulate at

least the objective, the granting procedure, the beneficiaries, the application

period, the amount of the funds allocated from the budget of the supplier, as well

as the European applicable provision which gave a legal basis for the state aid

measure. Any documentation, including the preliminary consultations, should

be analysed by the Competition Council only if it is accompanied by the

aforementioned notifications. The request of approval of the measure

susceptible to represent a state or de minimis aid, drafted by the

supplier/initiator, as appropriate, should be sent in its draft form to the

actuale in Blan E., Varia G., Iftene C., Administraia public între misiuni şi constrângeri bugetare:

dimensiuni juridice şi manageriale, Editura Wolters Kluwer, Bucureşti, 2014, p. 136-144.

22 Apostol Tofan D., Puterea discreionar şi excesul de putere al autoritilor publice, Editura All

Beck, București, 1999; Apostol Tofan D., Unele consideraii cu privire la controlul de legalitate exercitat de

prefect. Evoluia legislaiei în domeniu, Caietul Ştiinific al Institutului de Ştiine Administrative „Paul

Negulescu” nr. 8/2006, p. 321-341; Petrescu R.N., Reflecii asupra evoluiei reglementrilor legale referitoare

la controlul de legalitate exercitat de prefect, Curierul Judiciar nr. 7/2008, p. 89-90; Petrescu R.N., Petrescu

O., Actualitatea recursului administrativ în dreptul român. Unele consideraii cu privire la o reglementare

recent în dreptul francez, in Revista Transilvan de Ştiine Administrative, nr.2/(31)/2012, p. 81-90;

Petrescu R.N., Drept Administrativ, Editura Hamangiu, Bucureşti, 2009, p. 57; Alexe I., Înalii

funcionari publici, op. cit., p. 156-167 şi 240; Dragoş D.C., Discuii privind posibilitatea anulrii unui act

administrativ pe motiv de inoportunitate, in Revista Transilvan de Ştiine Administrative nr.

1(10)/2004, p. 30-33; Randres D., Code administratif – 2017, 8e édition à jour au 15 décembre 2016,

Editeur Larcier, Bruxelles, 2017, p. 1251-1257.

128 Irina Alexe

Competition Council, which should issue a Notice of Compliance, regarding

the correctness and the fulfilment of the obligations stipulated by the European

legislation in the field of state aids.

It can be thus observed that, at the stage of the request of approval addressed

to the Competition Council by the local public administration that aims to grant a

state aid, the only preliminary condition is that both the Prefect and the County

Council to be informed on the matter. The submission of the request of approval

to the Competition Council is not legally conditioned either by a preliminary

approval of the institution of the Prefect or of the County Council, neither is a

distinction operated for the case in which the County Council, authority of the

local public administration, that makes such a request must inform itself.

Also, it is not clear why the institution of the Prefect needs to be informed, at

this stage, given the fact that it does not dispose of any means of intervention

in the undergoing procedure. Of course, from its position as a representative of

the Romanian Government at the local level, the Prefect can request data and

information from public authorities or institutions.

The initial text of Government Emergency Ordinance n. 77/2014

provisioned, in its art. 18, now abrogated23, the following: ”(1) On the analysis of

legality review of administrative acts establishing support measures by the local

authorities, the Prefect has the obligation to verify the existence of the approval issued by

the Competition Council, as well as the fulfilment of national and European legal

provisions in the field of state aid. (2) The Prefect may demand clarifications from the

Competition Council regarding the incidence of national and European norms in the field

of state aid.”

It may be observed that the initial intention of the delegated law maker was

to only regulate an intervention of the Prefect in the phase of the analysis of

administrative acts by which the local authorities establish supporting measures,

and not regarding the preliminary phase, making this clear by the used term, this

is to say notification. Nevertheless, there is at least one reason why the

notification should be made during the preliminary procedure, and this is for the

Prefect to become acquainted with the request of approval addressed to the

Competition Council, and not for him to exercise the legality review on an

administrative act in the absence of an opinion from the Competition Council, as

long as the initiator of the act does not inform to what concerns the request

previously send to the Competition Council.

It may thus be considered that the regulation itself is not a new attribution

given to the Prefect, knowing that the legality review procedure of an act issued

by the local public administration includes the obligation for the Prefect to verify

both the formal and the material requirements of the analysed act, including the

presence or the absence of the approvals required by the law, and, as

23 Article 18 from the Government Emergency Ordinance n. 77/2014 was abrogated by article

1 point 11 of the Law n. 20/2015.

Considerations regarding the attributions of the prefect in the field of state aid 129

previously showed, the necessity of an opinion by the Competition Council in

order to establish a state aid measure was already previously regulated.

Other considerations could be taken into account, like the necessity of the

prefect to verify, within the legality review, the opportunity of the measure, as

a component of the administrative control act, based on the notification received

by the public local administration authority. The problem which should be

underlined here is that of the limits of the administrative control regarding the

activity of local public administration authorities, inscribed in the European

Charter of Local Self-Government24, being known that between the Prefect and

the local public administration authorities there are not existing any reporting

relationship. Nevertheless, an issue in need to be addressed is that of the respect

of the constitutional principles, including the principle of proportionality, as

well as the importance of their respect, of the legal provisions and of the

obligations deriving from the accession to the European Union. We consider that

such an approach should also take into account, as demonstrated at the

beginning of this analysis, the sanctions which would be applicable to the

Romanian state for the lack of fulfilment of the obligations deriving from the

founding treaties of the European Union, despite the fact that these sanctions

would be enforced for the failure to respect the provisions of a local public

administration authority.

Besides, the Law n. 20/2015 approving the Government Emergency

Ordinance n. 77/2014 pointed out these aspects, throughout its art.151, newly

introduced by the Parliament in the text of the Government Emergency

Ordinance n. 77/201425. Hence, it clarifies the attributions of the Prefect

24 The European Charter of Local Self-Government is not an instrument of the European

Union, but of the Council of Europe and was ratified by Romania through the Law n. 199/1997 for

the ratification of the European Charter of Local Self-Government, adopted in Strasbourg on 15

October 1985, published in the Official Journal of Romania, Part I, n. 331 of 26 November 1997.

Article 8 from the European Charter of Local Self-Government, called Administrative

Supervision of Local authorities’ activities provides that ”1. Any administrative supervision of local

authorities may only be exercised according to such procedures and in such cases as are provided for by the

constitution or by statute. 2. Any administrative supervision of the activities of the local authorities shall

normally aim only at ensuring compliance with the law and with constitutional principles. Administrative

supervision may however be exercised with regard to expediency by higher-level authorities in respect of tasks

the execution of which is delegated to local authorities. 3. Administrative supervision of local authorities shall

be exercised in such a way as to ensure that the intervention of the controlling authority is kept in proportion

to the importance of the interests which it is intended to protect.”

25 Article 15 provides the following: ” (1) During the legality review of administrative acts

through which are established support measures by the local authorities, the Prefect has the

obligation to verify the existence of the approval issued by the Competition Council. (2) In the case

of de minimis aid measures, during the analysis of the existence of an approval issued by the

Competition Council, the Prefect will verify the fulfillment of legal provisions in the field of state

aid. (3) In the case in which the local public authorities adopted measures through which an

economic advantage is granted to an enterprise, the Prefect will request the opinion of the

Competition Council regarding the incidence of national and European norms in the field of state

aid.”

130 Irina Alexe

regarding the legality review of the administrative acts instituting support

measures by local public administration authorities and it imposes verification

procedures for the existence of an approval issued by the Competition council,

and in the case of de minimis aid measures the Prefect is obliged to verify and

to fulfil the legal procedures in the field of state aid. Also, in the perspective of

the adoption by the local public administration authorities of measures granting

economical advantages to an enterprise without the approval of the

Competition Council, the Prefect must ask for an opinion from the

Competition Council concerning the incidence of national and European norms

in the field of state aid.

The analysis of the justifications of the modifications proposed in the

Parliament26 shows that ”the modification was necessary in order to increase the clarity

of the text, as well as in order to avoid doubling procedures regarding the notification of

the Government and to reduce bureaucracy for the local authorities. The notification of

the Government will be realised through the Prefects. Therewith, annexing the

opportunity analysis to the notification addressed to the Prefect’s institution and to the

County Council, it is established a mechanism in order to ensure a better knowledge

regarding the local necessities and of the possible solutions which could be implemented

in order to avoid potential failures of the market.”

It is clear that all other legal provisions concerning the procedure through

which the Prefect may demand to the issuing authority, the complete or partial

modification or the nullification of the act, before addressing an

administrative court are and remain applicable.

A question that arises is to what extent the personnel from the Prefect’s

institution is specialized in the field of European Law, and in the very

technical field of the state aid, in order to exercise such a control. Given the

legitimacy of this question, last year we launched a 15-month project27, whose

beneficiary is the National Agency of Civil Servants, having as a general

objective the development of the public administration’s capacity to realise an

efficient implementation and absorption of European structural and investment

funds (ESIF), supporting simultaneously the process of enforcement of the

European legislation in the field of state aids. The training activity for the 378

professionals constituting the target group is targeted to the training in the field

26 The justification can be found in the Report (Raportul). 4c-1/138 (nr. PL – x50/2015) of

17.02.2015 drafted by the Committee for economic policy, reform and privatization of the Chamber

of Deputies on the Law for the approval of the Government Emergency Ordinance n. 77/2014

regarding national procedures in the field of state aid, as well as for amending and completing

Competition Law n. 21/1996, available at: http://www.cdep.ro/comisii/economica/pdf/2015/

rp050.pdf accessed on 15 February 2017.

27 ”Training concerning the application of state aid legislation for ESIF beneficiaries at the local

level”, project code 1.1.005, co-financed from the European Regional Development Fund through

Operational Programme „Accessibility and Transport” (OP) (TA) 2014-2020.

Considerations regarding the attributions of the prefect in the field of state aid 131

of state aid, and each of the 42 Prefect’s institutions is having two

representatives. Another category targeted by this project is the one of the

personnel from the local public administration authorities, making part of the

same target group.

Besides, there are already some examples28 regarding the correct application

by the Prefect, with the support of the administrative court of the provisions of

the former article 18 from the Government Emergency Ordinance nr. 77/2014,

abrogated and replaced, as shown previously, by the art. 151.

5. Conclusions

We may thus conclude that, in the field of state aid, the evolution of the

institutions and of the European law were closely related to the evolutions of

Romanian institutions and law, especially in the past 10 years, since the accession

of the Romanian State to the European Union. Mentioning the training program

related to the enforcement of the legislation in the field of state aid for the ESIF

beneficiaries at the local level was not random, because it is a good example of

cooperation between the three categories of authorities and public institutions

(Competition Council, Prefect and local public administration authorities). We

are convinced that the existence of specialists in this area within all the types of

public authorities and institutions involved in the field of state aid may lead to a

decrease of the number of actions through which the Romanian state may

violate the European legislation.

Although the Prefect, representative of the Government at the local level, has

been included in the new Romanian regulation as part of the internal procedure

regarding the state aid granted to the beneficiaries by the local public

administration authorities, we consider that the regulation per se is not

constitutive of a new attribution granted to the Prefect, being widely known

that, in the legality review of an act of a local public administration authority, the

Prefect must verify the existence of the notices required by the law and, as

shown previously, the necessity of issuing an approval of the Competition

Council in order to establish a state aid measure was already regulated.

We consider that the law establishing the obligation of the local public

administration authorities to inform the Prefect, (that also concerns the

28 Please refer to Decision n. 889 of 16 June 2016 (Sentinţa nr. 889 din 16 iunie 2016) (Suceava

Tribunal, nullification of an act issued by local public authorities (fiscal and administrative disputes

department), unpublished, available at http://www.rolii.ro, accessed on 15 February 2017. In this

case, despite that the Court of First Instance rejected the action of the Prefect asking for the

nullification of an administrative act issued by the Local Council, the review body dismissed the

case and sent the legal case to the same instance. Subsequently, the instance admitted the action

presented by the Prefect and ruled the nullification of the decision issued by the Council, which

established state aid measures, without an approval of the Competition Council, thus unlawfully.

132 Irina Alexe

opportunity analysis regarding the proposed measures, inherent to the state

aid granting procedure), since the moment of the request of approval from the

Competition Council, does not affect the exercise by the Prefect of the legality

review regarding the acts of local public administration authorities, but has the

purpose to clarify the attributions of the three categories of authorities and to

establish a transparent and loyal cooperation between the two of them, in

order to ensure that the final objective, the obligations deriving from the

European membership, are being respected.