Council Of State Suspends Awarding Decision For Failure To Comply With The Foreign Subsidies Regulation (Regulation (EU) 2022/2560)

In a judgmentof 31 August 2026, the Council of State ruled for the first time on the application of Regulation (EU) 2022/2560, also known as the Foreign Subsidies Regulation (the “FSR”), to the award of a concession. The Council of State held that failure to comply with the obligations arising under the FSR renders the awarding procedure irregular and the awarding decision unlawful. For the first time, the judgment demonstrates how the FSR operates within awarding procedures and will undoubtedly heighten awareness of the FSR among both contracting authorities and tenderers.

1. The FSR in short

In 2023, the European Union introduced the Foreign Subsidies Regulation. Its purpose is to curb the distortive effects of foreign subsidies on the European internal market, including in the context of public procurement and concessions.

The FSR determines the circumstances in which foreign financial contributions must be notified to the European Commission in connection with the award of a public contract or concession. Articles 28 and 29 of the FSR provide that, where the value of the contract is 250 million EUR or more, candidates or tenderers must:

• either notify financial contributions where they meet the criteria set out in Article 28(1)(b) FSR. This provision concerns cases in which the undertaking has received foreign financial contributions of 4 million EUR or more per third country during the previous three years; or
• submit a declaration listing all foreign financial contributions received and confirming that those contributions do not meet the criteria described above.

The contracting authority must then submit the information received to the European Commission for analysis. The contracting authority is not allowed to decide on the awarding of the contract whilst that analysis is ongoing.

If the required notification or declaration is missing, the contracting authority must request the candidate or tenderer to provide it within ten working days (Article 29(3) FSR).

2. The concession at issue

The Council of State’s judgment of 31 August 2026 concerns the award of a concession for the operation of the casino in Brussels.

The City of Brussels launched a procurement procedure for a concession for services concerning the operation of a Class I gaming establishment (casino) within the territory of the City of Brussels. The concession has a duration of 15 years and was estimated to generate revenue of 750 million EUR over that period.

In addition to operating the casino, the holder of the concession would also be responsible for operating the various catering services located on the premises covered by the concession and for organising events at the site.

The contract constitutes a concession for services within the meaning of the Belgian Concessions Act of 17 June 2016.

Six tenderers submitted an offer, including Casinos Austria International Belgium and E.C.K. After the concession was awarded to E.C.K. on 17 July 2026, Casinos Austria International Belgium, the incumbent operator, requested the suspension under the extreme urgency procedure before the Council of State.

The Council of State granted the request for suspension and found several of the arguments to be serious. One of those arguments concerned the failure to apply the FSR, as discussed below. The other arguments addressed in the judgment are not further detailed in this contribution.

3. The Council of State’s assessment of the application of the FSR

In its judgment, the Council of State first sets out and confirms the obligations arising under the FSR:

• First, the Council of State holds that, under Article 29(6) FSR, a contracting authority must confirm in the contract notice that tenderers are subject to the obligations laid down in Article 29 FSR.

• The Council further holds that, pursuant to Article 29(1) FSR, tenderers must notify foreign financial contributions where those contributions meet the conditions in Article 28(1)(b) FSR, namely contributions representing 4 million EUR or more per third country over the preceding three years. It also confirms the separate obligation for tenderers that have not received such contributions to submit a declaration listing all contributions they have received and confirming that they are not subject to the notification requirement.
• The Council of State also confirms the contracting authority’s obligation to forward the notifications and declarations it has received to the European Commission “without delay”. Under the FSR, only the European Commission is competent to examine those notifications and declarations and to determine whether any foreign financial contributions enabled a tenderer to submit an unduly advantageous tender that distorts the awarding procedure. The Commission exercises its powers of preliminary review, investigation and decision-making in accordance with Articles 30 and 31 FSR.

Applying those principles to the award of the concession for the operation of the casino in Brussels, the Council of State held as follows:

• The value of a concession corresponds to the revenue that the contractor will generate from operating the concession over its full term. It was undisputed that the value of the concession for the operation of the Brussels casino, calculated on that basis, was estimated at 750 million EUR. The 250 million EUR threshold relevant to the application of the FSR was therefore exceeded. The Council rightly rejected the City of Brussels’ argument that the FSR applies only where foreign financial contributions also exceed the FSR threshold. The mere fact that the estimated value of the concession is equal to or greater than 250 million EUR is sufficient for economic operators to be subject to either a mandatory notification or a declaration under Chapter IV FSR.

• The applicability of the FSR automatically entails an obligation for each tenderer to include the notification or declaration required by the FSR with its tender. This is an autonomous legal obligation that does not depend on whether the contracting authority mentioned it in the procurement documents.

• The City of Brussels could not maintain that the FSR imposes obligations only on tenderers. The Council of State confirmed that the contracting authority must, first, mention the applicability of the FSR in the contract notice and, second, submit the notifications and declarations received to the European Commission for review without delay.

• Where a contracting authority finds that the notification or declaration required by the FSR is missing and it is not supplied within ten working days following a request for regularisation, the authority must declare the tender substantially irregular and exclude it from the procedure. On this point, the Council of State confirms an unequivocal obligation on the contracting authority to declare the tender irregular and exclude it.

• The City of Brussels also sought to argue that the FSR obligations could still be complied with after the awarding decision and before conclusion of the contract. The Council of State held that this argument was contrary to the wording of the FSR. It further confirmed that the contracting authority is responsible for ensuring compliance with the FSR obligations and thereby enabling the European Commission to exercise its investigative powers.
• The Council of State could not and would not rule on the regularity of tenders not accompanied by a notification or declaration within the meaning of the FSR. It could only find that the awarding decision had been taken in breach of Articles 28 and 29 FSR.

The Council of State thus concluded that failure to comply with Articles 28 and 29 FSR affects the regularity of the awarding procedure and, consequently, the lawfulness of the awarding decision. Indeed, if a tenderer fails to submit a notification or declaration and does not remedy that omission, its tender must be deemed irregular.

In this specific case, the Council of State found that not all tenderers had complied with the obligations under Articles 28 and 29 FSR. Nor had the City of Brussels used the regularisation mechanism provided for in Article 29(3) FSR by allowing the missing documents to be supplied within ten working days. Furthermore, the only declaration received, submitted by the applicant in the proceedings before the Council of State, had not been forwarded to the European Commission.

In its judgment of 31 August 2026, the Council of State emphasised that the European Commission has exclusive competence to assess whether foreign financial contributions distort the internal market.

Article 32 FSR provides that the contracting authority may not award the contract or concession while the investigation procedure prescribed by the FSR is still pending before the European Commission. This obligation was not complied with either.

By awarding the concession without following the procedure prescribed by the FSR and without enabling the European Commission to exercise its investigative powers, the City of Brussels infringed the FSR, according to the Council of State. The Council therefore held the awarding decision to be unlawful.

4. Key takeaways for contracting authorities and tenderers

The judgment clearly confirms that the FSR not only imposes obligations on tenderers, but also lays down specific procedural obligations for contracting authorities.

In summary, for contracts with an estimated value of 250 million EUR or more:

For contracting authorities:

• the obligation to mention the applicability of the FSR in the contract notice;

• the possibility, within ten working days after receipt of the tenders, to request missing notifications or declarations from tenderers; and

• the obligation to submit the documents received to the European Commission for assessment and await its position before continuing the award procedure.

For tenderers:

• the obligation either to notify financial contributions meeting the criteria set out in Article 28(1)(b) FSR or to submit a declaration concerning foreign financial contributions that do not meet those criteria; and
• where a regularisation request is made, the obligation to supply the required documents in due time.

Failure to comply with these obligations leads, respectively, to the irregularity of the procedure and the unlawfulness of the awarding decision, and to the irregularity and exclusion of a tender that does not comply with the FSR.

The number of cases in which the FSR applies remains limited, given the applicable threshold of 250 million EUR. Where the FSR does apply, however, it entails very specific obligations for contracting authorities and tenderers that are decisive for the lawfulness of the awarding decision. The Council of State unequivocally confirms this in the judgment discussed here.