Justyna Smela Wolski

European State Aid Law Quarterly, Volume 21 (2022), Issue 2, Page 153 - 172

This article explores the possible legal bases of the Proposal for a Regulation on Foreign Subsidies, which, at first glance, displays elements of competition, internal market, and common commercial policy. It is argued, in particular, that the Proposal does not fulfil the requirements regarding the use of Article 114 TFEU established in the Court’s case law despite its self-proclaimed goal of removing ‘distortions within the internal market’. Firstly, it is disputed that foreign subsidies can fall within the scope of a Member State’s competence. Secondly, even if the former reasoning were proved to be wrong, it is difficult to hold that the goal of the Regulation is to harmonize in order to prevent future obstacles to trade between Member States. In any case, should a general basis be needed due to the effects of the Regulation on the internal market, Article 352 TFEU would be a more plausible option, insofar as it applies to non-harmonisable areas and to the creation of new legal forms, such as foreign subsidies, which are at the crossroads of the notion of State aid of Article 107 TFEU and the notion of subsidy of the Anti-Subsidy Regulation. Nevertheless, it is concluded that the entirety of the Proposal could be based on Article 207 TFEU if a teleological and wide interpretation of the common commercial policy, such as that of Opinion 1/78, is followed. Notably, it is argued that the restoration of effective competition within the internal market is not a goal in itself, but rather a consequence of remediating undesirable trade-related behaviours of third countries. Finally, the role that the Regulation, if adopted, will play in Moldova and Ukraine is studied. Keywords: foreign subsidies; common commercial policy; trade; competition; internal market; legal basis

Andreas Haak, Barbara Thiemann

European State Aid Law Quarterly, Volume 21 (2022), Issue 1, Page 20 - 30

In her 2021 State of the European Union Address, European Commission President Ursula von der Leyen stressed ‘the importance of investing in our European tech sovereignty’ and continued by appealing that ‘[w]e have to double down to shape our digital transformation according to our own rules’. Availability of semiconductors (also referred to as microchips or simply as chips) is essential for industry and national security alike. Without microchips there is no tech sovereignty. Given the currently fragile state of global supply chains, expanding fabrication capacity within the EU is high on the political agenda. At the same time, ensuring fair competition is of paramount importance. While tech sovereignty must be matched by sufficient State funding, it still needs to be awarded in compliance with EU State aid rules. These rules must not work as an impediment to tech sovereignty. Furthermore, the rules of the game must be the same for everyone. This regulatory objective is most evident in the draft Distortive Foreign Subsidies Regulation. Keywords: twin transition; ICPEI; supply chain; sovereignty; EU Chips Act; foreign subsidies

Wolfgang Weiß

European State Aid Law Quarterly, Volume 21 (2022), Issue 2, Page 132 - 142

In May 2021 the European Commission tabled a draft Third Country Subsidies Regulation which stands between trade and competition policy. This new instrument establishes a review of third country subsidies with a view to addressing the competition distortion resulting from foreign subsidies granted to undertakings economically active in the EU internal market. As the new tool complements EU State aid scrutiny with a view to foreign subsidies, the present contribution compares the general procedures and provisions of the new regulation with EU State aid law. It will be shown that despite many similarities with State aid law, considerable differences remain which can be explained by looking at the different procedural and substantive context. Keywords: third country subsidies; ex officio review; Commission discretion; procedural powers; rights of defence

Raymond Luja

European State Aid Law Quarterly, Volume 20 (2021), Issue 2, Page 187 - 199

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.

Georgiana Pop, Ana Amador

European State Aid Law Quarterly, Volume 19 (2020), Issue 2, Page 127 - 136

All countries across the globe are speeding up economic measures to tackle the impact of the coronavirus pandemic. Many of these measures, which have adopted different forms, fundamentally aim at providing liquidity to companies and reducing the pressure on cash-flows of most affected sectors. Even if subsidies and State aid can provide immediate support to ailing companies in extraordinary circumstances, governments should not forget the disruptive effects that subsidies can bring on competition and international trade in the longer run. Keywords: COVID-19, coronavirus, subsidies, design, general measures, EU Temporary Framework

Jürgen Kühling, Philipp Reinhold, Thomas Weck

European State Aid Law Quarterly, Volume 19 (2020), Issue 4, Page 403 - 417

Globalisation has contributed to an increasing number of companies from third countries, such as China, operating in the EU. In the system of a ‘socialist market economy with Chinese characteristics’, however, the Chinese State intervenes in the economy in a variety of ways, including the provision of subsidies. The growing importance of China in the global economy has led to fears that such interventions are increasingly having a negative effect on the competitiveness of European companies. Although companies in the EU receive State support as well, the provision of this support is subject to European State aid control which does not apply to aid granted by foreign States. This creates an imbalance in relation to unregulated government support in China, but also in other countries. The effects of foreign subsidies on competition are not currently addressed by other means of European competition law. European trade rules do indeed provide instruments for reacting to ‘unfair’ trade practices. However, they do not guarantee comprehensive protection of competition in the EU internal market. Moreover, current proposals to reform existing European competition and trade law sometimes go beyond the goal of a level playing field and lead to protectionism and, at worst, damage to effective competition as a central element of the internal market. According to the authors of this article, a targeted new instrument is needed instead. This new ‘Third-Country State Aid Instrument’ (TCSI) should focus on filling the existing gaps and should lead to an equal treatment in relation to Member State measures under European State aid law. Keywords: China; State capitalism; anti-subsidy rules; third-country subsidies; White Paper

Kiran Desai

European State Aid Law Quarterly, Volume 19 (2020), Issue 4, Page 536 - 542

Birgit Haslinger, Elisabeth Hoffberger-Pippan

European State Aid Law Quarterly, Volume 19 (2020), Issue 3, Page 384 - 388

Yevhen Dudnyk

European State Aid Law Quarterly, Volume 18 (2019), Issue 2, Page 216 - 219

Thomas Gourdeau

European State Aid Law Quarterly, Volume 18 (2019), Issue 3, Page 432 - 434