This regular alert covers key regulatory EU developments related to the COVID-19 situation. It does not purport to provide an exhaustive overview of developments and contains no analysis or opinion.

LATEST KEY DEVELOPMENTS

Competition & State Aid

  • European Commission publishes proposed Regulation on foreign subsidies distorting the internal market
  • EU approves new and amended Member State measures to support the economy

Trade / Export Controls

  • European Commission publishes proposed Regulation on foreign subsidies distorting the internal market
  • European Commission releases Communication on New Industrial Strategy
  • EU-India Leaders' Meeting discusses investing in EU-India Strategic Partnership
  • European Parliament to debate on IP waiver for COVID vaccines and vote on report on post- COVID trade

Medicines and Medical Devices

  • WHO and ICRMA issue Joint Statement on clinical data transparency
  • European Medicines Agency starts rolling review of the GlaxoSmithKline COVID-19 vaccine
  • European Commission adopts EU Strategy on COVID-19 therapeutics

Cybersecurity, Privacy & Data Protection

  • WHO and ICRMA issue Joint Statement on clinical data transparency

COMPETITION & STATE AID

European Commission publishes proposed Regulation on foreign subsidies distorting the internal market (see here)

On 5 May 2021, the Commission published a proposed Regulation on foreign subsidies distorting the internal market. This novel instrument would afford the Commission with extensive new powers to counteract alleged distortive effects of foreign subsidies in the EU Single Market (Jones Day Alert, "European Commission publishes proposal to counter foreign subsidies distorting the Single Market," May 2021, see here).

The Commission argues in its proposal that the COVID economic crisis is leading to higher levels of subsidization worldwide. The Commission's Impact Assessment on the proposed Regulation (see here) claims that the problem of distortive foreign subsidies is becoming more pressing in the context of acquisitions, public procurement and other market situations.

The Impact Assessment, in particular, contends that a wave of acquisitions may also come in the wake of the deflated value of certain EU companies as a result of the COVID crisis. Some non-EU companies are also reported as considering diversifying or localizing parts of their supply chains due to the disruptions to the global production chains.

The proposed Regulation seeks to address possible distortions that fall outside the current EU State aid, merger control and antitrust framework. As concerns competition and State aid rules, at present, there are no specific EU provisions to address the potentially distortive effects of foreign subsidies on the internal market. The Commission believes that there are challenges to finding a multilateral solution to subsidies within a reasonable and are therefore moving forward with this proposal.

The proposed Regulation combines elements from EU rules on merger control, State aid, trade defense, and public procurement. It proposes three tools, i.e.:

  • Mandatory merger notification system. In mergers and acquisitions facilitated by foreign subsidies, the acquirer would need to submit a prior notification to the Commission when:
  • The EU turnover of the EU company to be acquired, or of at least one of the EU merging parties, is at least €500 million; and
  • the foreign subsidy amounts to at least €50 million.
  • Public procurement. In public procurement procedures, bidders would be required to disclose any foreign subsidies received by submitting a prior notification to the contracting authority when:
  • the estimated value of the procurement is at least €250 million; and
  • any foreign subsidies have been received three years prior to the notification.
  • Ex officio review of foreign subsidies. A general tool is proposed to review foreign subsidies that would allow the Commission to investigate any market situation, including mergers and acquisitions or public procurement procedures not meeting the thresholds under the above two tools. The Commission could start such an investigation on its own initiative and would have the power to request ad hoc notifications.

The European Parliament and the Member States will now review the Commission's proposal in view of adopting a final text of the Regulation.

The proposed Regulation is also open to comments 5 July 2021.

For further details on the proposed Regulation, see below Section on Trade / Export Controls.

EU approves new and amended Member State measures to support the economy (see here and here)

Since the onset of the coronavirus outbreak, the European Commission has adopted a significant number of State aid measures under Article 107(2)b, Article 107(3)b and under the Temporary Framework.

The most recent measures adopted to support the economy and companies affected by coronavirus outbreak include:

  • increase in budget of €213 million for Italian scheme to support trade fairs sector affected by the coronavirus outbreak
  • second modification of Belgian scheme to support companies in Flanders affected by the coronavirus outbreak – the modification includes a budget increase from 440 million to €634 million
  • €13 million Latvian scheme to support pig farmers affected by the coronavirus outbreak
  • €3.6 million Slovenian scheme to support pig breeders affected by the coronavirus outbreak
  • €8.8 million Estonian scheme to support organizers of cultural events in context of the coronavirus outbreak
  • €22 million Portuguese scheme to support micro, small and medium- sized enterprises in the region of Madeira in context of the coronavirus outbreak
  • €47 million per month Danish scheme to compensate companies for damages suffered due to the coronavirus outbreak
  • €1.9 billion Czech scheme to support companies in the context of the coronavirus outbreak
  • €11.6 million Czech scheme to support travel agencies in the context of coronavirus outbreak

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