Originally published in The In-House Lawyer
Private undertakings that engage in commercial transactions with
public authorities located in the EU should be more aware of the
risk of unlawful state aid. This is especially true for
construction or development companies, as well as real estate
funds, when participating in projects with public authorities
involving the sale and/or finance of buildings or land. In many of
these transactions the risks of state aid are either ignored or
overlooked. In general, state aid is forbidden and any unlawful
state aid including interest is to be recovered from the recipient
undertaking. The recipient undertaking therefore bears the risks of
unlawful state aid. Hence the importance for undertakings to
determine whether a risk of state aid exists in relation to
commercial transactions with public authorities. If so, appropriate
steps should be taken to seek compliance with rules on state aid or
to notify such aid to the European
