The French Presidency of the EU Council submitted a first compromise text on distortive foreign subsidies to the Member States on 19 January. In parallel, the text is being discussed in the European Parliament’s Committee on International Trade (INTA) (see EUROPE 12877/16). In the document submitted to the EU Council, of which EUROPE has obtained a copy, France aligns itself overall with the European Commission’s proposal.
The French Presidency of the Council of the EU (FPEU) proposes to keep the thresholds proposed by the Commission (see EUROPE 12711/9) to identify a subsidy as distortive (€5 million over 3 years). It also agrees on the other thresholds above which companies must notify the Commission of a merger or bid to compete for a public contract.
The Commission’s proposal for a regulation provides that the Commission may adopt delegated acts to amend the thresholds above which notifications apply.
The EU Council Presidency clarifies this power of delegation, insisting that the Commission should use the experience of the first 5 years to assess whether or not the investigations lead to too few cases of distortive foreign subsidies. It can then raise or lower the thresholds accordingly.
In doing so, the Commission should, in the view of the FPEU take great care to consider the administrative burden on business and on the Commission.
It also adds that companies must be able to prove that a foreign subsidy considered distortive by the regulation does not, in its case, lead to distorted competition.
Use of the instrument
Regarding the Commission’s so-called “ex officio” tool for investigating suspected cases of distortive foreign subsidies irrespective of the thresholds, the proposed Regulation provides that the Commission may rely on “information from any source”. The Presidency adds that Member States, but also associations, legal entities or individuals must report to the Commission any case of potential distortive foreign subsidies. However, they point out that the Commission is not obliged to follow up on this report, i.e. to launch an investigation.
Clarifications to prevent companies from circumventing the regulation are also included in the compromise text.
Finally, France adds in black and white in the text that the decisions taken by the Commission under this regulation can potentially be challenged by the Court of Justice of the EU.
See the compromise proposal: https://bit.ly/3ub2hON (Original version in French by Léa Marchal)