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The Foreign Subsidies Regulation:

Countering State Aid Beyond the European Union

Raymond Luja

DOI https://doi.org/10.21552/estal/2021/2/3

Keywords: foreign subsidies, common commercial policy, redressive measures, mergers, public procurement


The European Commission proposed a Regulation to deal with the effects of foreign subsidies on the internal market. Undertakings involved in large mergers, acquisitions and upcoming joint ventures or those in the lead of submitting a tender may have to notify foreign subsidies directly or indirectly received in future. The proposal also allows the Commission to launch investigations into other foreign subsidies that distort the internal market. This contribution discusses both the material and formal framework as proposed and takes a first look at parallels and differences with the State aid regime governing intra-EU government subsidies, including guarantees and special tax treatment. The author recommends, inter alia, to clarify the concepts of ‘undertaking’ and ‘interim measures’, to limit notification to selective subsidies in the context of tenders, and to restrict the retroactive effect of the notification requirement in light of the administrative burden involved. Further suggestions to increase consistency and legal certainty have been included as well. As the new obligations imposed on undertakings may affect future public procurement procedures and concentrations, they should be given sufficient attention in time in order not to delay such procedures and to avoid fines or redressive measures.
Keywords: foreign subsidies; common commercial policy; redressive measures; mergers; public procurement.

Prof Dr Raymond Luja, Professor of Comparative Tax Law at Maastricht University, the Netherlands, and of counsel to Loyens & Loeff N.V. as a specialist in fiscal State aid. For correspondence: <mailto:raymond.luja@maastrichtuniversity.nl>.

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