Speech
Statement from Minister Donohoe on launch of procurement process in relation to Apple state aid recovery
Published on
Last updated on
Published on
Last updated on
The Government is fully committed to ensuring that recovery of the Apple state aid takes place without delay and has committed significant resources to ensuring this is achieved, notwithstanding the appeal lodged in 2016.
The recovery amount will be paid into an escrow fund with final release when there has been a final determination in the European Courts over the validity of the European Commission’s Decision.
Given the scale and bespoke nature of such a fund, the precise terms are still being negotiated and are subject to confidential and commercially sensitive deliberations.
As part of the establishment of the escrow fund, an escrow agent/custodian will be appointed by Apple and the Minister for Finance and Public Expenditure and Reform (the Minister) to hold and administer the escrow fund.
The services of the escrow agent/custodian will be procured in accordance with the European Union (Award of Public Authority Contracts) Regulations 2016.
The Minister is appointing the NTMA as his agent to run this procurement process.
Further information will be published shortly in the Official Journal of the European Union.
Commencement of this procurement process represents a significant milestone and follows months of intensive discussions between Ireland, Apple and the European Commission on the recovery process.
Setting up of the escrow fund will also involve the appointment of one or more investment managers to manage the escrow fund. A separate competitive tender process will be run for these appointments in due course.
Irish officials are continuing their intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and remain in regular contact with the European Commission and Apple on all aspects of this process.
Commenting on the recovery process, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D. said:
“Work has long been on-going to ensure that the State complies with its recovery obligations. With the launch of this public procurement process for the appointment of an escrow agent/custodian, I welcome the significant progress being made and I look forward to the completion of the recovery process.
Due to the unprecedented quantum involved, and the complexities of the European Commission Decision, this is a novel and highly intricate process requiring time to implement. I welcome the continued understanding of the European Commission on this matter.”
ENDS
Queries
As the NTMA are running the procurement processes on the Minister’s behalf the following should be used for queries on this matter:
for press queries on the procurement contact martin.w.whelan@ntma.ie
for general queries in relation to the procurement contact Procurement@ntma.ie
Apple Recovery
Procurement of Third Party Service Providers
Notes for Editors
Mode of recovery
The recovery sums will be paid into an escrow fund pending the outcome of legal proceedings. Given the scale and bespoke nature of such a fund, the precise terms are still being negotiated and are subject to confidential and commercially sensitive considerations but will involve the appointment of independent third party service providers.
Procurement of third party service providers
as party of the establishment of the escrow fund, an escrow agent and custodian will be appointed by Apple and the Minister to hold the assets and administer the escrow fund.
Additionally, setting up of the escrow fund will also involve the appointment of one or more investment managers to manage the escrow fund.
Role of National Treasury Management Agency (NTMA)
Given the NTMA’s existing functions and expertise, the Minister is appointing the NTMA as his agent under section 28 of the National Treasury Management Agency (Amendment) Act 2000 to run the procurement processes on his behalf.
Role of Apple
The third party service providers will be jointly appointed by Apple and the Minister to service the escrow fund.
Escrow Agent and Custodian
The role of the escrow agent and custodian will be to hold and administer the escrow fund.
A contract notice will be published in the Official Journal of the European Union (OJEU) shortly regarding a proposed contract for the appointment of an escrow agent and custodian.
The competition for the appointment of an escrow agent and custodian is being run under the restricted procedure in accordance with Directive 2014/24/EU as implemented in Ireland by the European Union (Award of Public Authority Contracts) Regulations 2016.
The restricted procedure is a two-stage procedure, a pre-qualification stage open to all interested parties who wish to submit an expression of interest, and an award stage where candidates shortlisted at the pre-qualification stage are invited to submit tenders and are assessed against award criteria set out in the Request for Tender (RFT).
The first stage requires interested service providers to respond to the Call for Expressions of Interest in the manner and within the timeframe set out in the Call for Expressions of Interest issued by the NTMA and Apple.
The purpose of the pre-qualification stage is to assess the capability of each candidate to carry out the required services.
In the second stage shortlisted candidates will be invited to submit tenders and will be assessed against the award criteria set out in the RFT document.
As the procurement of the escrow agent and custodian is a formal process with strict requirements we will not be commenting any further on this process at this time.
Prospective candidates will be able to engage with the procurement process directly. Further details will be available in the Official Journal of the European Union (OJEU) over the coming days.
Size of Fund
The size of the escrow fund has yet to be confirmed, but it may be circa €13 – 15billion (including EU interest).
Type of assets under custody
The escrow fund will be denominated in Euro and will be invested in low risk assets (primarily fixed income instruments).
How Long will the assets be held in custody
The escrow fund will remain in place, pending the outcome of the applications by Ireland and by ASI and AOE for annulment of the European Commission Decision.
Investment Manager
The role of the investment manager(s) will be to manage the escrow fund.
An EU public procurement process will not be run for the appointment of one or more investment manager(s) as the investment management services arising fall within the scope of the exclusion in Article 10(e) of Directive 2014/24/EU (as implemented in Irish law by Regulation 10(1)(e)(i) of the European Union (Award of Public Authority Contracts) Regulations 2016).
However in order to secure value for money a competitive tender process will be undertaken (outside the scope of the EU public procurement rules). The exact terms of this tender process are currently being agreed between the Minister and Apple. No further information is available at this time.
Timeline
It is estimated that the EU procurement process for the escrow agent and custodian will take approximately 5 months. The competitive tender process for appointment of investment manager(s) is also expected to be finalised within this timeframe.
Although the formal deadline for recovery has now passed, it is not unusual or uncommon for Member States to require more time for recovery and the European Commission has acknowledged the complexity involved in this case.
The Government is fully committed to ensuring that recovery takes place without delay and have committed significant resources to this matter.
Irish officials are continuing their intensive work to ensure that the State complies with all its recovery obligations as soon as possible, and remain in regular contact with the European Commission and Apple on all aspects of this process.