The EU General Court issues a decision which finds that in situations where regional State aid is found to be incompatible with the internal market, their regional handicaps cannot justify any leniency in the recovery of the aid (Zone Franche de Madère)

Selectivity of Regional Schemes*Introduction Article 107(3)(a) areas and the outermost regions of the EU [defined in Article 349 TFEU] are more favourably treated under State aid rules. But they still have to comply with the terms of Commission authorising decisions. In case regional State aid is found to be incompatible with the internal market, their regional handicaps cannot justify any leniency in the recovery of the aid. On 21 September 2022, the General Court ruled, in case T-95/21, Portugal v European Commission, that a favourable tax regime implemented by the Autonomous Region of Madeira was selective, the aid was incompatible, and it had to be fully recovered. [1] Portugal appealed against Commission decision 2022/1414 [SA.21259] which found the Zona Franca da Madeira [ZFM,