Ireland and Apple set up State Aid Recovery Fund

The Irish Finance Minister Paschal Donohoe has confirmed that the Escrow Framework Deed was signed by Ireland and Apple on Tuesday the 24th May. The deed sets out the detailed legal agreement regarding the recovery of €13bn of assessed back taxes by the European Commission in its State aid decision of August 2016. The signing of the Escrow Framework Deed activates the recovery process and, as a consequence, the assessed back taxes will be paid in tranches into the Escrow Fund, with full recovery expected to be effectuated by September 2018.

This is the largest ever fund to be established in the European Union for purposes of recovery of State aid as assessed back taxes by the European Commission. The London branch of Bank of New York Mellon was selected as provider of escrow agency and custodian services whilst Amundi, BlackRock Investment Management (UK) Limited and Goldman Sachs Asset Management International for the investment management services. The funds will be invested by these international asset managers to ensure a financial return for Apple in the event of successful outcome of the EU court litigation.

The case is under appeal at the General Court from both the Irish Government as addressee of the Commission decision, and Apple, as alleged State aid beneficiary. A telephone conversation also took place last week between Margrethe Vestager, the EU Competition Commissioner who is responsible for the Apple case at political level, and the Irish Finance minister.

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