Today, the European Commission released its Guidelines on the application of the Foreign Subsidies Regulation (FSR), providing important clarifications on how distortions of competition will be assessed.
Key Highlights
Key highlights include:
▪️ Assessment of distortions of competition: A two-step approach to determine whether foreign subsidies strengthen a company’s competitive position and alter market dynamics.
▪️ Public procurement procedures: How the Commission evaluates whether foreign subsidies lead to unduly advantageous bids.
▪️ Balancing test: Weighing negative effects of distortive subsidies against specific positive effects.
▪️ Call-in mechanism: Expanded powers for the Commission to request prior notification of certain concentrations and public procurement procedures, with new safe harbors introduced.
These Guidelines offer practical examples and evidence requirements, helping businesses navigate compliance under the FSR.
For companies operating internationally, understanding these rules is crucial to mitigate risks and ensure smooth transactions in the EU market.
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