Reply to the public consultation of the European Commission on the implementation of the Foreign Subsidies Regulation, 6 March, 2023
- In the context of the public consultation launched on 6 February 2023 by the European Commission (the “Commission”), the Association des Avocats pratiquant le droit de la concurrence (Association of Lawyers Practicing Competition Law, hereinafter, the “APDC”) welcomes the opportunity to comment on the Commission’s draft implementing regulation (“IR”) and its annexes aimed at providing procedural rules for the implementation of the EU’s foreign subsidies regulation (Regulation 2022/2560, the “FSR”), which shall apply from 12 July 2023 and will require new merger and procurement notifications to the Commission from 12 October 2023.
- The APDC notes that the FSR, which aims to regulate and take action outside the field of trade defense against subsidies granted by foreign authorities that may have an impact on the single market, is the first legislation of its kind in the world and is based on a unique mix of legal concepts stemming from State aid law, antitrust law and (international and EU) trade law. As a result, the scope and interpretation of these concepts (in particular the concept of financial contribution), which also play a key role in the draft IR, are not clearly defined today.
- The APDC fully understands the Union’s objective to level the playing field between companies that can only receive subsidies from EU Member States subject to the conditions laid out under EU State aid law and companies that may currently receive subsidies from non-EU Member States (and use such subsidies to distort competition in the single market) without any form of control. However, in light of the current uncertainty on the interpretation of the FSR, the APDC suggests that the contemplated IR should pursue the following objectives: