THE IMPLICATIONS OF THE NEW EU FOREIGN SUBSIDIES REGULATION AND ITS DRAFT IMPLEMENTING REGULATION FOR INVESTORS AND BENEFICIARIES
THE IMPLICATIONS OF THE NEW EU FOREIGN SUBSIDIES REGULATION AND ITS DRAFT IMPLEMENTING REGULATION FOR INVESTORS AND BENEFICIARIES

Summary/Abstract: This article examines the notification obligations according to the draft implementing regulation of the Foreign Subsidies Regulation (“FSR”), which was implemented by the European Parliament and the Council on January 12, 2023. The draft implementing regulation establishes an extensive notification system for mergers and acquisitions (M&A) cases and public procurement, including tenders. The article outlines the main notification obligations and the required data that must be submitted to the Commission under the FSR and its draft implementing regulation. The FSR came into effect on January 12, 2023, and will be applicable starting from July 12, 2023. As of October 12, 2023, companies are required to notify the Commission of mergers and participation in public procurement procedures when the relevant thresholds are met. The purpose of this article is to examine the FSR and its Draft Implementing Regulation, which aim to address potential distortions in the EU internal market caused by subsidies from third countries to companies operating within the EU. The analysis in this article is based on a review of the FSR and its Draft Implementing Regulation, and relevant legal sources. The article also considers the consultation period of the European Commission and feedback received from companies and stakeholders during the development of the draft implementing regulation. The methodology involves a detailed examination of the provisions, definitions, and notification requirements outlined in the FSR and its draft implementing regulation. The draft implementing regulation of the Foreign Subsidies Regulation presents new compliance and reporting requirements for companies operating within the EU, aiming to address potential distortions in the EU market caused by foreign subsidies. While the specific legal challenges can vary, companies and beneficiaries should be prepared for the new obligations and requirements. These include ensuring compliance, understanding the subsidy assessment criteria, cooperating with authorities during investigations, balancing transparency with the protection of confidential information, and potentially addressing legal challenges or disputes. The implementation of the Foreign Subsidies Regulation represents a significant step in regulating third country subsidies and promoting fair competition in the EU internal market.

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