Overview

The Foreign Subsidies Regulation (FSR) aims to combat the effects of potentially distortive subsidies granted by non-EU countries to companies operating in the EU.

The EU already has in place rules that screen subsidies granted within the EU (i.e., the EU State Aid regime), as well as rules combatting injurious subsidies granted to imports of foreign goods (i.e., the anti-subsidy trade defense regime). However, they were not considered sufficient to ensure a level playing field for companies participating in M&A transactions or in public procurement in the EU. The FSR aims at ensuring just that.

This new regime requires companies meeting certain thresholds to notify the European Commission before closing their transaction or report the subsidies received from non-EU countries to the contracting authority when responding to a public tender in the EU.

On its own initiative, the European Commission can also “call in” and review any M&A transactions ex officio if it finds sufficient evidence that a foreign subsidy distorts the EU market.

The FSR has significant implications for both EU and non-EU businesses engaged in large transactions or participating in EU public tenders. They will need to track internally on an ongoing basis all financial contributions received from non-EU countries and make any necessary filing where the relevant thresholds are met.

Stay Up To Date With Our Latest Insights

See how we use a multidisciplinary, integrated approach to meet our clients' needs.
Subscribe
Share