Knowledge

The new Regulation on Foreign Subsidies Distorting the Internal Market (“FSR”) allows the Commission to investigate financial contributions that are granted directly or indirectly by third countries to the European Union (“EU”) to companies carrying out an economic activity in the EU and correct, if necessary, the effects of distortion caused by said contributions. In particular, this new instrument complements EU state aid rules aimed at combating distortions in the internal market caused by subsidies granted by Member States.

With the application of this regulation:

• Concentrations that meet the cumulative conditions set out in the FSR are subject to the legal obligation of prior notification to the Commission and are subject to the obligation of non-implementation until a final non-opposition decision is issued. The definition of “concentrations” includes mergers, acquisitions of sole or joint control and full-function joint ventures.
• Notifications are made according to a specific form, follow a specific procedure and are preferably carried out electronically. They must be preceded by a request to allocate the Commission team to the process and addressed to the Commission's Foreign Subsidies Register.
• The European Commission may, through the ex officio analysis procedure, examine foreign subsidies that it suspects are distorting or are likely to distort the internal market and which have not been notified.

Find out more in the Informative Note prepared by TELLES European and Competition Law and Corporate, Transactional and Private Equity teams.