The European Commission has recommended that Member States do not grant financial support to companies with links to countries that are on the EU’s list of non-cooperative tax jurisdictions. Restrictions should also apply to companies that have been convicted of serious financial crimes, including, among others, financial fraud, corruption, non-payment of tax and social security obligations.

The Commission’s recommendation aims to provide a template to Member States, in line with EU laws, on how to prevent public support from being used in tax fraud, evasion, avoidance or money-laundering schemes, or terrorist financing. By coordinating restrictions on financial support, Member States can prevent mismatches and distortions within the Single Market.

The Commission has stated that Member States should inform the Commission of the measures that they will implement to comply with this recommendation, in line with the EU’s good governance principles. The Commission plans to publish a report on the impact of this recommendation within three years.