Subsidy control: guidance

Guidance to help public sector bodies to understand and comply with subsidy control.

Prohibited subsidies

The WTO Agreement on Subsidies and Countervailing Measures (ASCM) contains two categories of prohibited subsidies, under which subsidies must not be given:

  • subsidies dependent on export performance – for example, giving a subsidy to a widget manufacturer linked to exporting a certain tonnage of widgets to another country
  • subsidies contingent on the use of domestic content – for example,  stating that the beneficiary must use 50% UK manufactured widgets in their product

In addition, several FTAs – including the TCA – expand the above prohibitions to cover services and include additional prohibitions. These include giving:

  • unlimited State guarantees
  • restructuring subsidy if the beneficiary does not have a valid plan in place to return the company to viability

The TCA includes some additional conditions for subsidies given to air carriers, energy/environment and large cross-border or international projects. These are not prohibitions but conditions which must be met.


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