EU Foreign Subsidies Regulation Anniversary: One Year of Enforcement
Enforcement Under Scrutiny
The European Union's Foreign Subsidies Regulation (FSR) marks its first anniversary. The FSR granted the European Commission (Commission) new powers to address distortive subsidies provided to companies operating within the EU by non-EU countries.
Defining Foreign Subsidies
What Constitutes a Foreign Subsidy?
A foreign subsidy exists when a non-EU country provides a financial contribution that confers an economic benefit upon a business. This contribution can be direct or indirect.
Enforcement of the FSR
The Commission's Role
The FSR empowers the Commission to review and potentially remedy foreign subsidies that distort competition within the EU. Companies receiving such subsidies may be required to notify the Commission, who then investigates and determines whether the subsidies are distortive.
Clearance Mechanism
New Tool for Non-EU Subsidies
The FSR introduced a clearance mechanism for non-EU subsidies granted to companies. This mechanism allows businesses to seek approval from the Commission before accepting subsidies. This process provides legal certainty and reduces the risk of future enforcement actions.
Conclusion
After one year of enforcement, the EU Foreign Subsidies Regulation continues to be a key tool in the European Commission's efforts to ensure a level playing field within the EU. The Regulation empowers the Commission to address distortive subsidies from non-EU countries and protect the integrity of the EU's internal market.
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