Regulatory & International Trade | RIT
Helping Businesses Clear Regulatory Hurdles in Europe
Regulatory & International Trade | RIT
Regulatory & International Trade | RIT
Helping Businesses Clear Regulatory Hurdles in Europe

Private Equity Firms Beware | Inflation Reduction Act Likely to Trigger FSR Obligations

One year after its entry into force on July 12, 2023, the Foreign Subsidies Regulation (FSR) continues to make headlines. The FSR allows he European Commission (EC) to investigate financial contributions granted by non-EU governments to companies active in the European Union and to impose measures to redress any uncovered distortive effects.

Contrary to expectations, the EC was quick to implement this new investigative tool to remedy the distortions caused by the allocation of foreign subsidies on the internal market. Read more in our previous post here.

In addition, it is highly likely that FSR-based controls will be strengthened in the coming years as national protectionism increases. For example, the Inflation Reduction Act (IRA), adopted by the USA in 2022 and introducing a nationwide support plan including production subsidies and tax incentives, is likely to subject US companies to FSR notification obligations and possibly to reinforced ex officio investigations by the EC.

Although the recent examples of FSR implementation have provided a better understanding of the EC’s priorities, many questions remain for economic operators, and even more so for private equity (PE) investors.

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Spotlight on the “Partner Countries” Exemption from Sanctions against Russia

From June 20, 2024, EU companies with a presence in Russia will no longer be able to rely on the “partner countries” exemption and will be required to obtain, or rely on, a licence to provide business services and/or software to their Russian entities.

Competent authorities of the EU Member States responsible for granting licences required pursuant to EU sanctions have taken markedly different approaches in implementing this change.

At the same time, UK sanctions against Russia never contained the “partner countries” exemption and UK companies providing business services to their Russian entities were always required to apply for a licence. In this article, we analyse how the German, French, Italian and the UK regimes are addressing this issue.

Click here to read our full article.

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German Authorities Take Action to Accelerate Export Control Procedures

The authorities responsible for export controls in Germany are currently focused on simplifying and accelerating their existing administrative procedures. Since fall 2023, they have enacted three packages of measures, which, among other things, significantly expand the catalog of general export authorizations (GAs). This offers companies substantial time and cost advantages, as the export projects covered by the GAs do not have to undergo individual licensing procedures anymore. The following provides an initial overview of the legislative amendments in this regard.

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Solar package I: Overview of the Main New Solar Regulation in Germany

The waiting has come to an end: after the German Federal Government adopted the first draft of the Solar Package I in August 2023 and a small selected part of Solar Package I already entered into force in December 2023, the German Parliament and the German Federal Council have now adopted the remaining (main) part of Solar Package I. The Solar Package I, which was significantly amended during the legislative process, contains a number of new regulations for solar energy in Germany, particularly in the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz – „EEG“) and in the Energy Industry Act (Energiewirtschaftsgesetz – „EnWG“). These new regulations are intended to facilitate and accelerate the expansion of solar energy in Germany and contain numerous changes for both ground-mounted and rooftop PV plants. Next to solar-related provisions, the Solar Package I also contains new regulations for the acceleration of grid connections as well as for the operation of electricity storage systems and introduces new or amended models for on-site electricity supply solutions.

To read the full article, please click [...]

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New UK Securitisation Framework | Regulators Publish Final Rules

On 30 April 2024, the FCA and the PRA published their respective policy statements (PS24/4 [1] by the FCA and PS7/24[2] by the PRA) in response to feedback received on their proposed draft rules on securitisations, which were presented in 2023 (CP23/17[3] and CP15/23[4]).

The new UK securitisation framework seeks to repeal and replace retained EU law in the UK, as part of the wider post-Brexit programme. Market participants will now need to read the FCA and PRA rules together with the Securitisation Regulations 2024[5] (as amended[6]), as these will comprise the new UK securitisation framework. Although the framework is new, the rules share many similarities with those of the EU Securitisation Regulation (2017/2402/EU) as currently adopted in the UK.

Changes will take effect from 1 November 2024, giving participants a six-month implementation period.

To read the full alert, please click [...]

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