Levelling the playing field or just greater complexity—the implications of the EU Foreign Subsidies Regulation

Article summary

Competition analysis: The EU's State aid rules are premised on the notion that national governments should not pick winners or else artificially influence the EU's internal market through selective subsidies. However, the State aid rules have previously not applied to companies operating in the EU bloc which receive (or have received) any subsidies from foreign (ie, non-EU) governments. Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market (FSR), which came into force on 12 January 2023, has brought in a new set of rules which are intended to close this regulatory gap. Going forward, companies in receipt of so-called foreign financial contributions (FFCs) will, in certain circumstances, be subject to scrutiny by the European Commission (the Commission). In this article, Marta Isabel Garcia, Bryony Roy and Will Spens of Stephenson Harwood consider what FSR has introduced and the relevant thresholds, the FSR notification process...