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

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

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.

 
CONTENT
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 Rdulescu” 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 Rdulescu” 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, ediia a 3-a revzut, 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., Clin 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, ediia a IV-a, Editura Hamangiu, Bucureşti, 2009, p. 1353-1385; Lazr I.,
Dreptul Uniunii Europene în domeniul concurenei, 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 constituional 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 potenial responsabile ale unui stat membru în situaia constatrii neîndeplinirii
obligaiilor de ctre Curtea de Justiie, in Blan E., Iftene C., Vcrelu M., Administraia public în situaii
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: Ordonana de urgen a Guvernului nr. 117/2006
privind procedurile naionale 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 modificri şi completri 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: Ordonana de urgen a
Guvernului nr.77/2014 privind procedurile naionale în domeniul ajutorului de stat, precum şi
pentru modificarea şi completarea Legii concurenei 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., Tnsescu E. S., comentariul la articolul 115 – Delegarea
legislativ, în lucrarea Muraru I., Tnsescu E.S., Constituia 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., Tnsescu E. S., Ordonana
de urgen a Guvernului Delegare legislativ. Situaii excepionale. Lege de aprobare a ordonanei de
urgen. Camera decizional. Competena Curii Constituionale. Obiectul controlului de constituionalitate.
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, ediia a IX-a, revzut şi actualizat, Editura Universul
Juridic, Bucureşti, 2015, p. 388-392. Alexe I., Situaia extraordinar - temei sau pretext pentru puterea
executiv de a reglementa în domenii rezervate legii?, in Blan E., Iftene C., Vcrelu M., Administraia
public în situaii 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 Rduţi, were reaffirmed the conditions in which the Government may issue a Government
Emergency Ordinance.
17 Alexe I., Înalii funcionari publici, Editura Universul Juridic, Bucureşti, 2014, p. 246-251; also,
Alexe I., Consideraii referitoare la Decizia nr. 55/2014 a Curii Constituionale a României şi la statutul
juridic al unor înali funcionari publici, in Curierul Judiciar nr. 3/2014, p. 159-161; Alexe I., Reforma
reformei. Studiu de caz: Ordonana de Urgen a Guvernului nr. 82 din 2013 in Blan E., Iftene C.,
Vcrelu M., Reforma statului: instituii, proceduri, resurse ale administraiei 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., Clin 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: Ordonana de urgen a Guvernului nr.77/2014 a fost aprobat cu modificri şi completri
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., Instituii
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; Blan E., Prefectul şi prefectura
în sistemul administraiei publice, Editura Fundaiei „România de Mâine”, Bucureşti, 1997, p. 37; Gyorke
Z., Instituia prefecturii în perioada interbelic (1923-1938). Proiecii legislative, in Revista Transilvan de
Ştiine Administrative nr. 3(27)/2010, p. 79-96; Munteanu C.D., Administraia public teritorial , Editura
Universul Juridic, Bucureşti, 2010, p. 157-158; Alexe I., Categoria înalilor funcionari publici. Tendine
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 Blan E., Varia G., Iftene C., Administraia public între misiuni şi constrângeri bugetare:
dimensiuni juridice şi manageriale, Editura Wolters Kluwer, Bucureşti, 2014, p. 136-144.
22 Apostol Tofan D., Puterea discreionar şi excesul de putere al autoritilor publice, Editura All
Beck, București, 1999; Apostol Tofan D., Unele consideraii cu privire la controlul de legalitate exercitat de
prefect. Evoluia legislaiei în domeniu, Caietul Ştiinific al Institutului de Ştiine Administrative „Paul
Negulescu” nr. 8/2006, p. 321-341; Petrescu R.N., Reflecii asupra evoluiei reglementrilor 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 consideraii cu privire la o reglementare
recent în dreptul francez, in Revista Transilvan de Ştiine Administrative, nr.2/(31)/2012, p. 81-90;
Petrescu R.N., Drept Administrativ, Editura Hamangiu, Bucureşti, 2009, p. 57; Alexe I., Înalii
funcionari publici, op. cit., p. 156-167 şi 240; Dragoş D.C., Discuii privind posibilitatea anulrii unui act
administrativ pe motiv de inoportunitate, in Revista Transilvan de Ştiine 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.”
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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.
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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.