Enterprise Estonia re-classifies projects to save face

22.11.2012, 11:16

Enterprise Estonia that distributes EU structural funds to Estonian companies and has recently found to have repeatedly violated rules and regulations governing such financing, says it has re-classified 36 projects that were suspected of having violated state aid rules as aid of minor importance.

Raul Parusk, the new chairman of Enterprise Estonia who took office only this week, said that European Commission allows to grant enterprises up to 200,000 euros in aid that is defined as aid of minor importance.

“The Commission has declared that aid that does not exceed 200,000 euros over three years does not influence trade between the member states nor distort competition,” said Parusk.

Parusk said that Enterprise Estonia looked at 37 projects which were suspected to have violated state aid rules and decided to re-classify 36 of them as low-importance aid. In once case the amount exceeded 200,000 euros which means some of the aid given to the company is going to be reclaimed.

He said that it was not necessary to obtain the approval of the Finance Ministry to the re-classification.

At the beginning of October, auditors listed 58 projects in the total amount of 8.5 million euros that were suspected to have violated rules on state aid. By EU rules, enterprises are not allowed to receive aid before they have started activities for which they applied.

The former chairman of Enterprise Estonia resigned last week over the damning audit report that the agency has violated funding rules and enterprises that have received millions in EU structural funds were now obliged to repay them.