Foreign Subsidies Archives - Regulatory & International Trade

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

by Sabine Naugès and Stéphane Dionnet | Jun 11, 2024 | Foreign Subsidies, Public Procurement

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.

First Dawn Raid Carried Out by The European Commission | Another Investigative Tool Deployed Under the Foreign Subsidies Regulation

by Stéphane Dionnet, Sabine Naugès and Hendrik Viaene | Apr 26, 2024 | Foreign Investment, Foreign Subsidies, Public Procurement

Since the Foreign Subsidies Regulation (FSR) entered into force on July 12, 2023, the European Commission has increasingly started to wield the powers granted to it. It opened its first in-depth investigation into a public procurement process in Bulgaria in a case involving locomotives on February 16, 2024 (read more in our previous post here) which led to the withdrawal of the Chinese from the public tender. Subsequently on April 3, 2024, the Commission initiated two new in-depth investigations, again in a public procurement matter, this time concerning solar panels. On April 9, 2024, the Commission initiated its first ex officio investigation in the wind turbine sector.

Public Tenders Under the Foreign Subsidies Regulation: What We Have Learned So Far

by Sabine Naugès and Stéphane Dionnet | Mar 22, 2024 | Foreign Subsidies, Public Procurement, Transport & Logistics

The Foreign Subsidies Regulation (the FSR) sets out rules and procedures for investigating bids in the context of public procurement procedures (PPPs) if foreign financial contributions (FFCs) and tender value thresholds are exceeded. In the case of a mandatory notification, the European Commission (EC) will determine if foreign subsidies granted to the bidder would distort the internal market and whether or not a commitment to remedy any distortion would be necessary.