2 Jan 2023

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Publication of the Regulation on foreign subsidies

On 23 December 2022, Regulation (EU) 2022/2560 of the European Parliament and of the Council on foreign subsidies distorting the internal market was published in the Official Journal.

The objective of this Regulation is to combat distortions caused by subsidies granted by third countries to companies operating within the EU market. Such foreign subsidies are currently not subject to Union state aid rules and impact competition within the Union including in the context of mergers and acquisitions as well as public procurement procedures.

The Commission has issued two statements stressing first of all its commitment to modernising rules on industrial subsidies to enhance the proper functioning of and to promote compliance with the WTO Agreement on Subsidies and Countervailing Measures (ASCM). Furthermore, in its second statement, the Commission has committed to clarifying the application of the Regulation in particular : (i) the existence of a distortion caused by a foreign subsidy on the internal market, (ii) the balancing test, and (iii) the assessment of a distortion in a public procurement procedure.

The Foreign Subsidies Regulation shall apply from 12 July 2023.

Commission’s explanatory video