The Foreign Subsidies Regulation ("FSR") entered into force on 12 January 2023. This new legislation regulates the competitive distortions caused by foreign subsidies and attempts to ensure a level playing field for all companies operating in the EU.

Three new rules:

  • The obligation to notify to the Commission concentrations involving a financial contribution by a non-EU government where (i) the acquired company, one of the merging parties, or the joint venture generates an EU turnover of at least €500 million, and (ii) the foreign financial contribution involved is at least €50 million;

  • The obligation for companies to notify the participation in public procurement procedures, where (i) the estimated contract value is at least €250 million and (ii) the foreign financial contribution involved is at least €4 million per non-EU country;

  • For all other market situations, the Commission, on its own initiative, can conduct ex-officio investigations when it suspects distortive foreign subsidies. This includes the possibility to request ad-hoc notifications for concentrations and public procurement procedures below the required thresholds.

Therefore, for companies that may be involved in any of these scenarios in the near future, here are some key dates to keep in mind:

  • 12 July 2023 : the FSR will start to apply as of 12 July 2023. So, companies that concluded concentrations or are engaged in public procurement procedures before 12 July 2023, do not have to notify the Commission under the FSR. This also means that, as of this date, the Commission will be able to start ex-officio investigations;

  • 12 October 2023 : the obligation for companies to notify concentrations and public procurement procedures falling within the scope of the FSR will be effective as of 12 October 2023;

  • Mid-2023 : in the coming weeks, the Commission will publish a Draft Implementing Regulation for review and comments by stakeholders. This instrument will clarify the applicable rules and procedures, including forms for notification and calculation methods of time limits. As of that date, stakeholders who wish to respond will have 4 weeks to provide their feedback. The finalised text should be adopted by mid-2023.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.