The Working Group on State aid is responsible for the legislation contained in Annex XV and Protocols 26 - 27 of the EEA Agreement. Articles 61-64, plus 49 and 59 of the EEA Agreement covers State aid. Protocol 3 of the Surveillance and Court Agreement covers the powers of ESA in the field of State Aid.
The State aid rules under the EEA Agreement broadly correspond to those in the EU. State aid is public support to commercial activities, and it can be in many forms, including grants, loans, tax concessions etc. As a rule, State aid is prohibited to prevent market distortion and negative effects on trade. Exemptions are made where public interventions might be necessary for a well-functioning and equitable economy, in areas such as research and development, environmental protection, regional development etc. In such cases, aid might be considered compatible with the functioning of the internal market.
It is the EFTA Surveillance Authority (ESA) which enforces the State aid rules in the EEA EFTA countries, including assessing compatibility of aid with the functioning of the internal market. ESA also has the power to order repayment of unlawful aid. All State aid measures must be notified to and approved by ESA before their implementation.
The Working Group on State Aid meets regularly and actively follows EU initiatives within the field of State aid, including attending multilateral meetings with the European Commission and experts from EU Member States.
DG Competition (DG COMP) - State aid
EFTA Surveillance Authority - State aid