MEPs on the European Parliament’s Committee on International Trade (INTA) adopted a series of compromise amendments on Monday 25 April on foreign subsidies that distort competition. This vote paves the way for the adoption of the report by Christophe Hansen (EPP, Luxembourg) (see EUROPE 12868/4). At the time of writing, the outcome of the vote on the whole report is not yet known.
In their compromise amendments, the various groups have agreed on the points that divided them only a few weeks ago. In general, they agreed to broaden and strengthen the scope of the regulation compared to what the European Commission had proposed in May 2021 (see EUROPE 12711/9).
For MEPs, a European company involved in a merger or acquisition, which has a turnover of more than €400 million and has received a financial contribution from a third country of more than €50 million in the last 3 years, must notify the Commission. The threshold proposed by the latter was €500 million of turnover.
In addition, companies who are candidates for public procurement tenders of over €200 million must notify the European Commission of any financial assistance received in the last 3 years. The Commission’s proposal was that this notification should apply to public procurement over €250 million.
MEPs would also like to see these different thresholds changed by means of a revision of the regulation, if a report shows that this is necessary. This report will have to be produced 2 years after the entry into force of the Regulation and every 3 years thereafter. The Commission planned to amend the thresholds, if necessary, by delegated act.
Secondly, MEPs in the INTA Committee have repeatedly amended the text to add more obligations for the Commission to act in cases of suspected or proven distortionary subsidies. In the case of distorted competition due to foreign subsidies, for example, the European Commission “must” impose remedial measures on the company concerned, according to the adopted amendments. This was not an obligation in the Commission’s proposal, which used the term “may”.
Similarly, where a company has received a distorting foreign subsidy and the Commission has to impose remedial measures on it, the Commission “may”, but is not obliged to, take into account in its decision the positive economic effects on the internal market that the company may have had.
These various amendments will represent the position of the members of the INTA Committee, once they have adopted the report as a whole. EUROPE will continue to follow this story. (Original version in French by Léa Marchal)