Proposal for a Regulation on foreign subsidies distorting the internal market

Author (Corporate)
Series Details COM (2021) 223
Publication Date 05/05/2021
Content Type , ,

Summary:

Legislative initiative tabled by the European Commission on 5 May 2021, aimed at establishing a new instrument to address potential distortive effects of foreign subsidies in the European Union's Single Market.

Further information:

The draft law proposes the introduction of three tools, two notification-based and a general market investigation tool. In this context, the European Commission acquires the power to investigate financial contributions granted by public authorities of a non-EU Member State which benefit companies engaging in an economic activity in the European Union and redress their distortive effects, as relevant.

The proposed Regulation aims at closing the regulatory gap in the Single Market, whereby subsidies granted by non-EU governments currently go largely unchecked, while subsidies granted by Member States are subject to close scrutiny.

This initiative was tabled on 5 May 2021, following the adoption of a White Paper on levelling the playing field as regards foreign subsidies in June 2020 and a consultation process with stakeholders. It is seen as a key element of an updated EU Industrial Strategy which was published on the same day. The plenary of the European Parliament adopted a negotiating position on 4 May 2022. The Council of the European Union adopted its general approach on that same day. An informal agreement between the co-legislators on compromise text for this file was reached on 30 June.

Source Link https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2021:223:FIN
Alternative sources
  • https://ec.europa.eu/competition/international/overview/proposal_for_regulation.pdf
Related Links
Commentary and Analysis
White&Case: Alert, 07/05/2021: The European Commission adopts far-reaching proposals to control foreign subsidies https://www.whitecase.com/publications/alert/european-commission-adopts-far-reaching-proposals-control-foreign-subsidies#:~:text=A%20foreign%20subsidy%20shall%20be,economic%20activity%20in%20the%20EU.
Federation of German Industries (BDI): News, 20/07/2021: Protection of the single market: Commission wants to control third-country subsidies https://english.bdi.eu/article/news/protection-of-the-single-market-commission-wants-to-control-third-country-subsidies/
Linklaters: Blog, 07/09/2021: EU Foreign Subsidies and Antitrust: an ongoing quest towards certainty and clarity https://www.linklaters.com/en/insights/blogs/linkingcompetition/2021/eufsrs/eu-foreign-subsidies-regulation-series/eu-foreign-subsidies-and-antitrust_an-ongoing-quest-towards-certainty-and-clarity
Wolters Kluwer: Competition Law Blog, 16/11/2021: The EU Anti-Subsidy Regulation – Implications for M&A http://competitionlawblog.kluwercompetitionlaw.com/2021/11/16/the-eu-anti-subsidy-regulation-implications-for-ma/
Wolters Kluwer: Competition Law Blog, 10/05/2022: The EU Anti-Subsidy Regulation Enters Trilogue Negotiations – New Obligations for Multinationals Coming into Focus http://competitionlawblog.kluwercompetitionlaw.com/2022/05/10/the-eu-anti-subsidy-regulation-enters-trilogue-negotiations-new-obligations-for-multinationals-coming-into-focus/
Linklaters: Blog, 11/05/2022: The EU nears new rules to curb unfair competition from foreign subsidies https://www.linklaters.com/en/insights/blogs/linkingcompetition/2022/may/the-eu-nears-new-rules-to-curb-unfair-competition-from-overseas-subsidies
European Centre for International Political Economy (ECIPE): Blog, 13/05/2022: While We Look at the TTC Progress, a Risk May Rise Elsewhere https://ecipe.org/blog/ttc-progress-risk-may-rise-elsewhere/
EPRS: Briefing, June 2022: Distortive foreign subsidies regulation: A level playing-field for the single market https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2021)690700
CMS Law-Now: eAlerts, 24/06/2022: Regulation on foreign subsidies is heading for the finish line - European companies need to be prepared https://www.cms-lawnow.com/ealerts/2022/06/regulation-on-foreign-subsidies-is-heading-for-the-finish-line-european-companies

News
Reuters, 05/05/2021: With eye on China, EU drafts rules to curb state-backed foreign buyers https://www.reuters.com/world/china/eu-drafts-rules-curb-state-backed-foreign-buyers-2021-05-05/
Politico, 05/05/2021: EU launches proposal to tackle foreign subsidies https://www.politico.eu/article/commission-releases-its-proposal-to-tackle-foreign-subsidies/
Euronews, 26/04/2022: EU lawmakers back reining in subsidised foreign companies https://www.euronews.com/next/2022/04/26/eu-trade
EurActiv, 05/05/2022: EU starts negotiations on distortive foreign subsidies regulation https://www.euractiv.com/section/economy-jobs/news/eu-plan-to-curb-foreign-state-backed-buyers-picks-up-pace/

Official
EUR-LEX: SWD(2021)99: Staff Working Document accompanying the Proposal - Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:99:FIN
EUR-LEX: SWD(2021)100: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:100:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on Regulation on distortive foreign subsidies (2021/0114(COD)) https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2021/0114(COD)
European Parliament: Legislative Train Schedule: Regulation on distortive foreign subsidies https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-distortive-foreign-subsidies
European Commission: Competition Policy: Foreign Subsidies https://ec.europa.eu/competition-policy/international/foreign-subsidies_en
European Commission: Press Release, 05/05/2021: Commission proposes new Regulation to address distortions caused by foreign subsidies in the Single Market https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1982
European Commission: Questions and Answers: Proposal for new Regulation to address distortions caused by foreign subsidies in the Single Market (5 May 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_1984
European Commission: Statement by Executive Vice-President Margrethe Vestager on the Commission's proposal for a new Regulation to address distortions caused by foreign subsidies in the Single Market (5 May 2021) https://ec.europa.eu/commission/presscorner/detail/en/speech_21_2286
Finnish Government: Press Release, 17/06/2021: Government supports intervention in foreign subsidies that distort competition in the European Union, but insists on clear rules https://valtioneuvosto.fi/en/-//1410877/government-supports-intervention-in-foreign-subsidies-that-distort-competition-in-the-european-union-but-insists-on-clear-rules
EPP EP Group: News, 25/04/2022: Europe is open but not naive https://www.eppgroup.eu/newsroom/news/europe-is-open-but-not-naive
European Parliament: Press Release, 04/05/2022: New tool to protect internal market against distortive foreign subsidies https://www.europarl.europa.eu/news/en/press-room/20220429IPR28230/
Council of the European Union: Press Release, 04/05/2022: Regulating distortive foreign subsidies in the internal market: Council adopts position https://www.consilium.europa.eu/en/press/press-releases/2022/05/04/reglementer-les-subventions-etrangeres-generant-des-distorsions-sur-le-marche-interieur-le-conseil-adopte-sa-position/
Renew Europe EP Group: News, 04/05/2022: New rules against unfair foreign subsidies on the internal market https://www.reneweuropegroup.eu/news/2022-05-04/new-rules-against-unfair-foreign-subsidies-on-the-internal-market
S&D EP Group: Newsroom, 04/05/2022: High time to stop unfair competition by companies receiving distortive foreign subsidies https://www.socialistsanddemocrats.eu/newsroom/high-time-stop-unfair-competition-companies-receiving-distortive-foreign-subsidies
Council of the European Union: Press Release, 30/06/2022: Foreign subsidies distorting the internal market: provisional political agreement between the Council and the European Parliament https://www.consilium.europa.eu/en/press/press-releases/2022/06/30/foreign-subsidies-regulation-political-agreement/
European Parliament: Press Release, 30/06/2022: Agreement on foreign subsidies: ensuring equal competition in the EU https://www.europarl.europa.eu/news/en/press-room/20220627IPR33918/
European Commission: Press Release, 30/06/2022: Foreign Subsidies: Commission welcomes political agreement on Regulation on distortive foreign subsidies https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4190
European Commission: Press remarks by Executive Vice-President Vestager for the political agreement on the Foreign Subsidies Regulation (30/06/2022) https://ec.europa.eu/commission/presscorner/detail/en/statement_22_4254
EPP EP Group: Newsroom, 30/06/2022: You're welcome to Europe's market if you play by the rules https://www.eppgroup.eu/newsroom/news/you-re-welcome-to-europe-s-market-if-you-play-by-the-rules
S&D EP Group: Newsroom, 30/06/2022: Parliament and EU governments reach deal to clamp down on unfair foreign competition to better protect European companies and jobs https://www.socialistsanddemocrats.eu/newsroom/parliament-and-eu-governments-reach-deal-clamp-down-unfair-foreign-competition-better

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