On 12 January 2023, the Foreign Subsidies Regulation (‘FSR’) entered into force. This new set of rules for addressing distortions caused by foreign subsidies will allow the EU to remain open to trade and investment, while ensuring a level playing field for all companies operating in the Single Market. The Regulation is published in the Official Journal.
In recent years, foreign subsidies appear to have distorted the EU’s internal market, including by providing their recipients with an unfair advantage to acquire companies or obtain public procurement contracts in the EU to the detriment of fair competition.
The FSR addresses such distortions and closes a regulatory gap. Subsidies granted by non-EU governments go currently unchecked, while subsidies granted by Member States are subject to close scrutiny under EU State aid rules. The FSR includes new tools to effectively tackle foreign subsidies that cause distortions and undermine the level playing field in the internal market.
Who's in charge
The European Commission is the sole enforcer of the FSR. The Directorate-General for Competition (DG COMP) is responsible for enforcing the FSR as regards concentrations and to start ex officio procedures to tackle the distortions on the internal market caused by foreign subsidies outside public procurement procedures. For questions, emails can be sent to DG COMP's Foreign Subsidies Registry function email address, email@example.com
The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is responsible for enforcing the FSR as regards financial contributions in public procurement procedures and to start ex officio procedures to tackle the distortive effects of foreign subsidies in public procurement procedures. For questions on public procurement procedures, emails can be sent to DG GROW's function email firstname.lastname@example.org