Customer success! Change in the unfavourable position of PARP regarding the status of cooperative banks as SMEs

The Firm’s client was one of the beneficiaries of EU funds under Measures 2.2 and 2.21 of POWER intended for the SME sector, in which the Polish Agency for Enterprise Development was the institution providing co-financing.

As part of the projects, cooperative banks participated in the training and counselling provided.

Unexpectedly, after the completion of the projects, PARP sent a position paper to the beneficiaries of the projects stating that the cooperative banks did not meet the conditions for participation in the projects as non-SMEs.

According to PARP, among others, “The cooperative bank, as a bank, has a market position and economic strength that exceeds that of an SME“.

Consequently, PARP considered the expenses incurred to support cooperative banks under the projects as ineligible and called for their reimbursement.

The Law Firm’s team comprehensively supported the Client in the development of arguments and presentation of positions to PARP, including, inter alia, preparing legal opinions on the status of cooperative banks.

The co-operative banks themselves and the National Association of Co-operative Banks also commented on the case.

As a result of the action taken, PARP withdrewits position on the withdrawal of the status of micro, small or medium enterprise (SME) from cooperative banks.

Thus, cooperative banks can continue to benefit from European funds for their activities as before:

“Based on the facts described above and the opinions obtained, PARP accepts as correct the determination of the status of a cooperative bank as an SME, made on the basis of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014.

recognising certain types of aid as compatible with the internal market in application of Articles 107 and 108 of the Treaty 1, thus recognising the eligibility of cooperative banks‘ support in projects implemented measures 2.2 and 2.21 of the OP WER“.

The cooperative banks themselves also informed about the case:

PARP’s revised position on the eligibility of cooperative banks as SMEs (kzbs.pl).