EU Regulation on Foreign Subsidies Enters into Force
On 28 November 2022, the EU adopted the Foreign Subsidies Regulation (FSR) which will allow the European Commission (the Commission) to screen non-EU government subsidies. The FSR entered into force on 12 January this year but its provisions will gradually start to apply as from mid-2023.
Targeting companies that receive financial contributions from governments outside the EU, the FSR introduces new notification regimes for both mergers and public tenders and equips the Commission with an arsenal of investigatory and remedial powers, including the powers to conduct dawn raids, impose fines and prohibit mergers and awards of tender contracts. Given its broad scope, the FSR is expected to have far-reaching implications for companies operating in the EU, not only companies from third countries but also EU-based companies that have received financial contributions from any non-EU government. It is time already now to keep track of such financial contributions since the new rules require records for the last five years.