Busines – Photo by Romain Dancre on Unsplash
(BRUSSELS) – New foreign subsidies rules began to apply Wednesday, to address distortions caused by foreign subsidies will enable the EU to ensure a level playing field for all companies operating within the Single Market.
The CSR applies to all economic activities in the EU: it covers concentrations (mergers and acquisitions), public procurement procedures and all other market situations. It gives the Commission the power to investigate foreign subsidies granted by non-EU countries to companies carrying out economic activity in the EU and to remedy, if necessary, their distorting effects. Further information is available on the “frequently asked questions” page.
Since the CSR now applies, companies that reach the quantitative thresholds set have three months, i.e. until 12 October 2023, to notify the Commission of major concentrations involving financial contributions from public authorities from non-EU countries above a certain threshold, or financial contributions from public authorities from non-EU countries in the context of large-scale public procurement procedures. The notification forms can be found in the CSR Implementing Regulation, which was adopted on 10 July 2023. The Commission also published today new practical and technical information to guide companies through the notification process.
For all other market situations, the Commission can, from today, open investigations on its own initiative (ex-officio) if it suspects the existence of distorting foreign subsidies, or to request ad hoc notifications for smaller transactions.
If the Commission finds that there is a foreign subsidy which distorts the single market, it can impose structural or non-structural remedial measures on companies, or accept them as commitments, to remedy the distortion. It may also prohibit the carrying out of a concentration involving a distorting subsidy or the award of a public contract to a subsidized bidder who has benefited from a distorting subsidy.
The ESR was proposed by the Commission in May 2021 and approved by the European Parliament and the Council in June 2022. It entered into force in January 2023.
