On February 6th, 2023, the Commission also started a public consultation on the draft implementing regulation concerning – inter alia – the form, content and procedural details of notifications required by the FRS.Ī foreign subsidy in the context of the FRS is understood as a financial contribution which is provided directly or indirectly by a third country and confers a benefit and which is limited to one or more undertakings or industries.
The FSR does not apply to M&A transactions concluded, and contracts awarded, before July 12th, 2023.
The FSR applies to all foreign subsidies granted in the five years preceding July 12th, 2023, provided that they are still distortive of the internal market on that date, except for subsidies relevant for the notification obligations described below, for which only contributions granted in the last three years are considered. The FSR will apply starting from July 12th, 2023, and is particularly relevant for companies that intend to be part of a M&A transaction or participate in a public procurement procedure in an EU Member State. This is considered an essential news in the EU regulatory framework, considering that as of today, the European Union had no means to directly contrast distortion of the internal market caused by contributions originating from non-EU States. On January 12th, 2023, EU Regulation 2022/2560 on foreign subsidies distorting the internal market (the “ FSR”) entered into force, with the purpose of addressing distortions of the internal market caused, directly or indirectly, by foreign subsidies granted to companies active in the common market.
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