This regular alert covers key regulatory developments related to EU emergency responses, including in particular, to COVID-19, Russia's war of aggression on against Ukraine, and cyber threats. It does not purport to provide an exhaustive overview of developments.

This regular update expands from the previous COVID-19 Key EU Developments – Policy & Regulatory Updates (last issue No. 99).

LATEST KEY DEVELOPMENTS

Competition & State Aid

  • European Commission adopts rules for implementing the Foreign Subsidies Regulation
  • Executive Vice-President and Competition Commissioner Margrethe Vestager seeks to lead European Investment Bank
  • European Commission prolongs the possibility to grant operating aid to certain regional airports
  • European Commission approves further schemes under new Temporary Crisis and Transition Framework to support economy in context of Russia's invasion of Ukraine and accelerating green transition and reducing fuel dependencies

Trade / Export Controls

  • European Commission publishes Communication on 2023 Strategic Foresight Report
  • Council of the European Union adopts its negotiating position on proposed Critical Raw Materials Act
  • Council of the European Union authorizes Critical Minerals Agreement negotiations with US

Medicines and Medical Devices

  • EMA announces phasing out of extraordinary regulatory flexibilities for medicines during COVID-19 pandemic
  • ICMRA publishes statement on safety of COVID-19 vaccines

Cybersecurity, Privacy & Data Protection

  • European Commission welcomes political agreement on proposed Cybersecurity Regulation
  • European Court of Human Rights rules that Russia illegally used facial recognition technology to arrest protestor

COMPETITION & STATE AID

Competition

European Commission adopts rules for implementing the Foreign Subsidies Regulation (see here)

On 10 July 2023, the Commission adopted the Implementing Regulation* detailing the procedural aspects of implementing the Foreign Subsidies Regulation (FSR), which entered into force on 12 January 2023.

To recall, the FSR affords the European Commission with extensive new powers to counteract alleged distortive effects of foreign subsidies in the EU Single Market, which have fallen outside of the existing EU State aid, merger control and antitrust framework framework (see also Jones Day Alert, "EU Foreign Subsidies Regulation Filings Mandatory Starting in October 2023" of December 2022, here).

In proposing the FSR, the Commission argued that the COVID economic crisis had led to higher levels of subsidization worldwide. The Commission's Impact Assessment on the proposed FSR (see here) also contended that the problem of distortive foreign subsidies is becoming more pressing in the context of acquisitions, public procurement and other market situations.

The FSR, in particular, sets out notification obligations for companies:

  • Mandatory notification for concentrations. In mergers and acquisitions ("concentrations") facilitated by foreign subsidies, the acquirer must submit a prior notification to the Commission when:
    • the acquired company, one of the merging parties, or the joint venture is established in the EU and generates an EU turnover of at least €500 million; and
    • where the parties to the transaction were granted combined aggregate foreign financial contributions of at least €50 million over the past 3 years.
  • Mandatory public procurement notification. Bidders in public procurement procedures must disclose any foreign subsidies received by submitting a prior notification to the Commission when:
    • the estimated contract value is at least €250 million; and
    • the bid involves combined aggregate foreign financial contribution of at least €4 million per non-EU country over the past 3 years.

The Implementing Regulation notably sets out the information that notifying parties must include in the notification forms. According to the Commission, in particular, the Implementing Regulation seeks to address public consultation feedback on limiting the administrative burden related to notifications.

As concerns foreign financial contributions deemed as the most likely to distort the internal market under Article 5 FSR (e.g., contributions granted to ailing undertakings, directly facilitating a concentration, or unlimited guarantees for an undertaking's debts or liabilities):

  • For concentrations, companies must provide detailed information on all financial contributions of an individual amount of at least €1 million, granted to the parties to the transaction in the 3 years prior to the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest.
  • For public procurement procedures, companies must provide detailed information on all financial contributions of at least €1 million individually granted to the notifying party/parties in the 3 years prior to the notification.

Furthermore, the Implementing Regulation provides detailed rules on, e.g.:

  • the Commission's investigation process (including procedures for companies to follow for submitting commitments to address the Commission's potential concerns);
  • the parties' procedural rights on the protection of confidential information, access to files, and submission of observations; and
  • the calculation and suspension of time limits for providing information and submitting commitments.

Next steps. The FSR applied as from 12 July 2023. As of 12 October 2023, companies must notify concentrations and participation in public procurement procedures involving foreign financial contributions and meeting the relevant notification thresholds.

The Commission's technical Q&A document provides further details and guidance on applying the FSR.

* Commission Implementing Regulation (EU) 2023/1441 of 10 July 2023 on detailed arrangements for the conduct of proceedings by the Commission pursuant to Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market

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