European Commission consults on draft regulation on foreign subsidies

 

European Commission consults on draft regulation on foreign subsidies

The European Commission has launched a consultation on a draft implementing regulation for the conduct of proceedings under Regulation 2022/2560 on foreign subsidies distorting the internal market (the Foreign Subsidies Regulation).

The Foreign Subsidies Regulation gives the Commission new powers to investigate and impose redress arising from financial contributions granted by third (non-EU) countries to companies engaged in economic activity in the EU. 

It imposes an obligation for companies to notify the Commission of certain concentrations and involvement in public procurement procedures which have foreign financial contribution elements.

The new rules will require merging companies to notify their mergers from 12 October, 2023 provided one of the parties has a turnover of at least EUR500 million and the transaction involves a foreign financial contribution of at least EUR50 million.

Companies will also be obliged to notify their participation in public procurement tenders in cases where the estimated contract value exceeds EUR250 million and the bid involves a foreign financial contribution of at least EUR4 million.

The draft regulations set out the procedural requirements of the new regime. It is hoped that guidance on how the Commission will approach issues of substance will be available soon. The approach in the proposed notification form appears to shift the burden to companies to establish the absence of a subsidy or its distortive effects.

The Regulation will be effective from 12 July 2023 when the Commission will be able to start its own investigations.

The notification obligation for companies will be effective as of 12 October 2023.

The Commission invites responses to the consultation by 6 March 2023.

 

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_591