The EU Foreign Subsidies Regulation (FSR) adopted in December 2022 creates a new instrument to prevent foreign subsidies from distorting the European Union (EU) internal market. It aims to fill a perceived regulatory gap left by EU State aid rules applying to subsidies granted by EU countries but not by foreign states. It started to apply on 12 July 2023 and its notification obligations kick in on 12 October 2023. Procedural details are laid down in the Implementing Regulation (IR) which entered into force on 13 July 2023.

Key things you need to know about the FSR and the IR:

  • The FSR creates an additional layer of deal conditionality for sizeable transactions besides potential foreign direct investment (FDI) and merger control clearance.
  • From 12 October 2023, when acquiring (including jointly) control of a company in the EU or participating in a public tender in the EU, companies – including EU ones – will have to notify the European Commission (Commission) of foreign financial contributions (FFCs) received from non-EU states if the relevant thresholds are met or if the Commission so requests. Notification is compulsory and suspensory. Failure to notify or to suspend closing pending clearance may lead to severe sanctions. Information requirements are far-reaching as they comprise FFCs irrespective of whether they have a link with the notified transaction or public procurement procedure.
  • Beyond notified transactions and public procurement procedures, the Commission may launch ex officio investigations where it suspects that a foreign subsidy may distort the internal market. The FSR can relate to any type of activity unless already governed by other legislation.
  • Where following an investigation (initiated either in relation to a notification or on an ex officio basis) the Commission determines that a foreign subsidy risks distorting the EU internal market, remedies could apply, and the Commission could even prohibit the transaction or the award of a public contract.

We have put together a brief overview for your reference. We would be happy to facilitate a discussion with our team to review what this regulation could mean for your company.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Christian Ahlborn Christian Ahlborn

For more than 20 years Christian Ahlborn has been advising multinational corporates, banks and other institutions on all aspects of global competition law, combining an in-depth understanding of the subject with a pragmatic approach.

Christian is qualified in England & Wales and in…

For more than 20 years Christian Ahlborn has been advising multinational corporates, banks and other institutions on all aspects of global competition law, combining an in-depth understanding of the subject with a pragmatic approach.

Christian is qualified in England & Wales and in Germany and is widely recognized as a market-leading competition lawyer. He is also a trained economist. Christian belongs to a small group of antitrust practitioners who can bring both a legal and economic perspective to a case.

Christian advises major corporates, banks and institutions on all areas of global competition law. He has a broad range of experience in EU competition law, particularly in relation to complex M&A, behavioral antitrust work, control of dominance issues and State aid control. He is well-known for extensive work on high-profile matters.

Christian’s experience spans many industry sectors, with particular experience in financial services, IT, fast-moving consumer goods and mining.

During his career Christian has been seconded to the European Commission’s Directorate-General for Competition and to the Bundeskartellamt. He is also well known on the Brussels market.

Read more about Christian AhlbornEmail
Show more Show less
Photo of Carole Maczkovics Carole Maczkovics

Carole Maczkovics is a market leader in State aid law, with a robust background in the economic regulation of network industries (energy and transport) and in public contracting (EU subsidies, public procurement, concessions).

Carole has a proven track record of advising public and…

Carole Maczkovics is a market leader in State aid law, with a robust background in the economic regulation of network industries (energy and transport) and in public contracting (EU subsidies, public procurement, concessions).

Carole has a proven track record of advising public and private entities in administrative and judicial proceedings on complex State aid and regulatory matters before the European Commission as well as before the Belgian and European courts. She also advises clients on the application of the EU Foreign Subsidy Regulation (FSR) and UK subsidy control regime.

Carole has published many articles on State aid law and on the FSR, and contributes to conferences and seminars on a regular basis. She is a professor at the Brussels School of Competition on the application of regulation and competition law (including State aid) in the railway sector. Carole further gives lectures to King’s College London LLM students and trainings on State aid law at EFE, in Paris. She also acts as Academic Director of the European State aid Law Institute (EStALI).

Recognized as a leading EU State aid practitioner by Chambers Europe, and as Thought Leader in Lexology Index: Competition – State aid, Carole is praised by clients as being “really knowledgeable, approachable and very structured,” and having “in-depth knowledge and experience in state aid matters.”

Read more about Carole MaczkovicsEmail
Show more Show less
Photo of James Marshall James Marshall

James Marshall advises on all aspects of competition law and foreign direct investment (FDI) screening, with a focus on merger and FDI control, investigations and enforcement, commercial counselling, and abuse of dominance. He has strong experience in the life sciences, energy & infrastructure…

James Marshall advises on all aspects of competition law and foreign direct investment (FDI) screening, with a focus on merger and FDI control, investigations and enforcement, commercial counselling, and abuse of dominance. He has strong experience in the life sciences, energy & infrastructure, digital and technology, financial services, and sports sectors.

James regularly leads cross-border teams to steer clients through both the merger control and FDI aspects of major global deals. Clients turn to James to help them navigate complex global transactions, and to find innovative solutions to antitrust enforcement and counselling matters.

Earlier in his career, James worked with the UK Competition and Markets Authority (CMA), where he helped develop the UK’s antitrust and regulated sector enforcement regimes. He also practiced for several years in the Asia-Pacific region and has experience advising on competition, regulatory, and public policy issues in Asia and the Middle East.

James is a former Chair of the Competition Section Advisory Committee of the Law Society of England and Wales. He is highly recommended by Legal 500 and is recognized as leading adviser by Who’s Who Legal. James is dual qualified in England and Wales, and the Republic of Ireland.

Read more about James MarshallEmail
Show more Show less
Photo of Melissa Van Schoorisse Melissa Van Schoorisse

Melissa Van Schoorisse focuses on a wide range of complex antitrust issues, including multi-jurisdictional merger control filings, international and Belgian cartel investigations, state aid matters, and general behavioural advice, counselling and compliance work.

She specializes in the wider music, media, and entertainment sector…

Melissa Van Schoorisse focuses on a wide range of complex antitrust issues, including multi-jurisdictional merger control filings, international and Belgian cartel investigations, state aid matters, and general behavioural advice, counselling and compliance work.

She specializes in the wider music, media, and entertainment sector as well as the transport, metals and mining, and the power generation and energy industry. In that context she has advised international and Belgian clients on the potential antitrust issues surrounding renewable or alternative energy sources, the consolidation of the Belgian energy sector, and the value of consumer data sets in merger control cases.

Melissa is well-regarded in the market, with clients praising her for being “very responsive, diligent”, “hands on” and giving “clear guidance.” “She is really good and knows the ins and outs of the BCA. She sees the big picture and the detail.” (Chambers Europe)

Prior to joining Covington, Melissa has gained extensive experience as an associate at two international law firms in Brussels, and as a secondee to the in-house competition team of a multinational oil and gas company in London, dealing with a wide array of vertical issues, cartel investigations, M&A transactions, and compliance training.

Read more about Melissa Van SchoorisseEmail
Show more Show less
Photo of Sibel Yilmaz Sibel Yilmaz

Sibel Yilmaz advises on all aspects of competition law, foreign investment and foreign subsidies screening, with a focus on the life sciences and technology and industrial sectors.

Sibel has particular expertise in the life sciences sector and provide strategic advice in regard to…

Sibel Yilmaz advises on all aspects of competition law, foreign investment and foreign subsidies screening, with a focus on the life sciences and technology and industrial sectors.

Sibel has particular expertise in the life sciences sector and provide strategic advice in regard to M&A, licensing and collaborations, regulatory strategies and general compliance. Sibel has also represented clients in several investigations relating to alleged excessive prices and other non-competitive practices in the life science sector. Sibel advises various clients in the technology sector, including in the gaming sector. She is also a Non Governmental Adviser to the Swedish Competition Authority within the frame work of its role in the ICN.

Sibel is ranked among the world’s top antitrust practitioners by Global Competition Review, who included her in their most recent 40 Under 40 survey, as well as Chambers Global. She is described as “a brilliant and promising lawyer, who is highly recommended for complex merger work” and “an exceptional talent”, “absolutely a tip for the top.”

Sibel obtained received her Master of Law from Stockholm University and a LL.M. in Law and Economics from the University of Rotterdam. She is admitted to practice in Belgium (e-list) and Sweden.

Read more about Sibel YilmazEmail
Show more Show less
Photo of Johan Ysewyn Johan Ysewyn

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients…

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients turn to Johan for clear, strategic guidance on merger control, cartel and monopolisation investigations, and other antitrust enforcement actions. His approach is pragmatic and solution-driven, combining deep legal insight with a commercial understanding of his clients’ business.

Leading directories consistently highlight Johan’s exceptional skill and client service: Chambers Global describes him as “an exceptional lawyer who is solution-oriented, has a remarkable ability to rapidly understand our business and has excellent reactivity.” Who’s Who Legal praises his “energy and insight into cartel proceedings,” while Legal 500 calls him “one of the best European competition lawyers” with “a unique understanding of the EC and a very helpful network of connections across Brussels.”

Johan represents clients before competition authorities and courts around the world, leveraging his in-depth knowledge of regulatory processes and strong working relationships with key decision-makers, particularly within the European Commission’s DG COMP, who designated him as one of their Non-Governmental Advisors to the International Competition Network. His advisory practice spans the evolving intersections of competition law with ESG, digital markets, and strategic compliance.  His experience covers a wide range of sectors, including telecommunications, technology, media, financial services, healthcare, consumer goods, retail, energy, and transport.

Johan has extensive experience in global merger control, having advised on numerous complex, cross-border transactions requiring coordination across multiple jurisdictions. His recent merger work includes representing Discovery in its landmark acquisition of Warner Bros. and advising Illumina on its acquisition of Grail—both recognised as award-winning deals in the competition community. Johan’s merger practice spans a wide range of sectors, from media and technology to healthcare and energy, and he is known for navigating the most challenging regulatory reviews with strategic foresight and precision.

Renowned for his expertise in global cartel enforcement, Johan has represented immunity applicants and defendants in major cases involving industries such as financial services, consumer goods, pharmaceuticals, chemicals, and energy. He also advised the European Payments Council in the first European Commission investigation into standardisation agreements in the e-payments sector. A recognised thought leader, Johan co-authors the European Cartel Digest and lectures on cartel law and economics at the Brussels School of Competition.

In addition, Johan is one of Europe’s foremost practitioners in EU State aid law, advising both governments and beneficiaries. His experience includes landmark cases involving leading banks and airlines such as Fortis, KBC, Dexia, Arco, Citadele, airBaltic, and Riga Airport.

Read more about Johan YsewynEmail
Show more Show less