STATE AID AND REQUIREMENTS FOR THE PROPER FUNCTIONING OF THE EU-UKRAINE ASSOCIATION AGREEMENT

The current concept of the EU internal market is considered more broadly and holistically. It includes not only economic integration but also consumer safety, labor policy, protection of social rights, and the environment. An important element of the effective functioning of the internal market is also the institution of state aid to economic entities, which provides for the possibility of attracting public investment and control over the efficiency of public resources. The provisions of the Association Agreement between Ukraine and the EU provide for the possibility of implementing, in the national legislation of Ukraine, the institution of state aid to economic entities on the model of the EU and contains specific requirements for Ukraine to transform this institution. The article considers the state of the state aid institute in the context of the implementation of the provisions of the Association Agreement. A general analysis of the concept of «state aid», the problems that most often arise and lead to distortions of competition in the market. The provisions of the legal institute of state aid and the compliance of the provisions of the Law of Ukraine «State Aid to Business Entities» with the provisions of the Association Agreement are determined. The compliance of subsidies with forms of state aid in the context of compatibility of state aid with the requirements of proper functioning of the Association Agreement and the possible impact of this institution on trade between the parties to the Agreement are analyzed. It is concluded that the implementation of EU rules on state aid in domestic legislation will promote competition and create a level playing field for businesses. At the same time, the introduction of a subsidy mechanism as a form of state aid provided to companies may be incompatible with the state aid institution and the requirements for the proper functioning of the Agreement and may adversely affect the development of trade with the EU.