Foreign subsidies control

Under the Foreign Subsidies Regulation, 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.

Somewhat surprisingly, Norwegian subsidies are also to be considered as “foreign” in the meaning of the regulation. Thus, the regulation affects Norwegian companies doing business in the EU, in particular larger corporations and those that form part of a multi-national group.  

The regulation comprises three tools, which can require companies operating in the EU 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.