Foreign subsidies and financial contributions: much fine-tuning ahead

Abstract

The Foreign Subsidies Regulation, which came into force on 12 January 2023, constitutes the missing piece to protecting the internal market from the distortive effects of public intervention and bridges a glaring regulatory gap. However, although tackling distortions of competition caused by non-EU countries’ public intervention has always been widely recognized as a worthy objective, the complexities and administrative burden deriving from Commission-designed tools have been broadly and harshly criticized. Even though more conceptually interesting topics are on the table, the present contribution focuses on the issue that seems to be the most controversial in the current phase: the quantity and type of information required in the notification process with regard to foreign subsidies/financial contributions received by the notifying undertaking in the previous three years. Indeed, the Commission requires all foreign financial contributions to be listed (with few exceptions) in the context of concentrations and public procurement procedures. Therefore, after a brief overview of the Foreign Subsidies Regulation, the contribution analyses the rationale and related risks of the Commission’s choice to require the notification of foreign financial contributions rather than foreign subsidies, it evaluates the possible alternative paths proposed during the public consultation and it concludes by proposing a reasonably balanced solution.