European Commission considers simplifying rules on foreign investment support while maintaining competition protection
Brussels, July 14 (KUNA) -- The European Commission announced on Tuesday that it intends to introduce targeted amendments to the Foreign Subsidies Regulation in order to streamline administrative procedures and reduce the burden on companies while maintaining the effectiveness of the rules in safeguarding fair competition within the Single European Market.
In a statement, the Commission said that the first review of the implementation of the regulation, which entered into force in 2023, concluded that the current framework is “fit for purpose” in addressing distortions caused by foreign subsidies in the internal market and ensuring a level playing field for companies.
It explained that the review, based on three years of application, showed that the regulation had enabled the Commission to monitor and address foreign subsidies that could affect competition before the completion of mergers and acquisitions or the award of high-value public procurement contracts, as well as to use its powers to investigate on its own initiative in cases requiring such action.
The Commission added that consultations with stakeholders confirmed the importance of the regulation but also highlighted concerns regarding the complexity and length of certain procedures, as well as the reporting burdens associated with foreign financial contributions.
In light of this, the Commission plans to propose amendments that include raising the current minimum threshold of EU revenues at 500 million euros (approximately 570 million US dollars), which triggers mandatory notification of mergers and acquisitions, thereby allowing authorities to focus on larger transactions. The Commission is also considering introducing a simplified notification mechanism in certain cases, raising the thresholds for reporting foreign financial contributions, and adding new exemptions from reporting requirements for contributions unlikely to distort competition in the internal market.
In the area of public procurement, the Commission intends to simplify notification and disclosure forms, review the rules for requesting exemptions from providing certain information related to foreign financial contributions, and clarify the rights and obligations of companies and contracting authorities, particularly concerning the handling of confidential information.
Quoting Commissioner for Economic and Industrial Strategy Stéphane Séjourné, the Commission stated that “the review confirms that the regulation is fulfilling its purpose by protecting the integrity of the internal market from distortions caused by foreign subsidies while maintaining a level playing field for companies across the European Union.”
Séjourné added that “Europe will remain open to investment, but this openness must be coupled with fair competition,” emphasizing that the Commission “will continue to listen to calls to simplify procedures and raise awareness of the regulation, while ensuring it remains a strong and effective tool for protecting the European market.”
The Commission noted that it will publish the draft amendments next autumn for public consultations with stakeholders, with the final version of the amendments expected to be adopted in 2027. (End) A.R.N. / M.A.H.A.
