28 Nov 2022

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Council gives approval to the Regulation on foreign subsidies

The Council has given final approval to the Regulation on foreign subsidies following the political agreement reached on 30 June with the European Parliament.

The objective of this Regulation is to combat distortions caused by subsidies granted by third countries to companies operating within the EU market. It lays down the procedural rules for investigating these subsidies in the context of large concentrations and bids in large public procurement procedures.

This Regulation is part of the instruments that guarantee a level playing field for all operators in the internal market, by combating foreign subsidies that were previously subject to virtually no control.

The Commission will have three tools at its disposal: two prior authorisation tools regarding large mergers and bids in large-scale public procurement procedures and a general market investigation tool for all other market situations.

With some exceptions, the Commission will be empowered to investigate foreign subsidies granted up to five years before the entry into force of the Regulation when these subsidies distort the internal market after the entry into force of the Regulation.

If the existence of a foreign subsidy and a distortion are established, the Commission will apply a balancing test to assess the positive and negative effects, as is the case under the state aid rules.