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The EU Foreign Subsidies Regulation:

Substantive Assessment Issues and Open Questions

Morris Schonberg


Keywords: foreign subsidies, WTO, distortion, balancing, redressive measures

The EU Institutions have now reached political agreement in relation to the Foreign Subsidies Regulation, a potentially far-reaching instrument that effectively creates a new subsidy control regime for non-EU subsidies affecting the EU's internal market. This article addresses the key substantive assessments that the European Commission will need to consider when investigating foreign subsidies under the Regulation, namely: (i) the existence of a ‘foreign subsidy’; (ii) whether the subsidy causes a ‘distortion’ in the internal market; (iii) whether the negative effects in the internal market may be balanced by any positive effects of the subsidy; and (iv) the determination of redressive measures or commitments required to address the distortions. It identifies a number of significant open issues and questions that could have a substantial effect on how the Regulation operates and ultimately, its impact in practice on competitive conditions within the internal market.
Keywords: foreign subsidies; WTO; distortion; balancing; redressive measures

Morris Schonberg, Senior Associate, Herbert Smith Freehills LLP, Brussels and PhD Candidate, London School of Economics and Political Science. I would also like to thank Kian O'Connell, Luca Donatella, Maria Vasileiadi and Martin Toskov for their research assistance. All views and any errors are mine alone. The text of this article was finalised in July 2022. For correspondence: <>.


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