Foreign Subsidies Control

Following introduction of the Foreign Subsidies Regulation as of 12 January 2023 (applicable as of 12 July 2023), the EU is extending state aid control to the support of businesses provided by non-EU governments worldwide. We support companies in navigating the new legal situation and assessing the associated business risks.

By the introduction of three new tools, companies operating in the EU might be required to report foreign subsidies from third countries in certain situations. First, larger M&A transactions might be subject to an additional review procedure akin to EU merger control and even be notifiable due to the existence of foreign subsidies. Secondly, participating in public procurement can require reporting foreign subsidies. Thirdly, the European Commission is empowered to initiate ex-officio investigations into individual cases of distortive subsidies from third countries.

In addition, the Foreign Subsidies Regulation serves as a trade defence instrument and creates opportunities for companies to lodge informal complaints against distortive subsidies from third countries (and their recipients). On the other hand, globally operating companies might face obstacles in monitoring and reporting all foreign subsidies in order to comply with the regulation, even those headquartered in the EU.