On Friday, 16 February, the European Commission announced that it was opening its first in-depth investigation under its regulation on unfair foreign subsidies. It is targeting a state-owned Chinese company that manufactures trains and that took part in a Bulgarian public tender for the provision of 20 electric trains. The value of this public contract is estimated to be €610 million.
The Chinese company ‘CRRC Qingdao Sifang Locomotive Co., Ltd.’, notified the European Commission on 22 January that it was participating in the public tender, in accordance with the terms of the Foreign Subsidies Regulation.
In force since 12 July 2023, this regulation requires companies that participate in a public tender where the value of the contract exceeds €250 million and that have received a foreign financial contribution of at least €4 million to notify the European Commission that they are participating in the tender (see EUROPE 13219/5).
Following a preliminary review, the European Commission believes that the Chinese company’s participation is likely to put other bidders at a disadvantage. According to the procedure provided for in the regulation, the European Commission has 110 working days starting from the [date of] notification (22 January) to deliver its decision, i.e. until 2 July.
It will have three options: accept the commitments that the company has proposed to remedy the problem, prohibit the public contract from being awarded to this company, or decide not to oppose the company’s participation [in the tender].
“Ensuring that our EU Single Market is not distorted by foreign subsidies to the detriment of competitive firms that play fair is vital for our competitiveness and economic security,” declared European Commissioner for the Internal Market Thierry Breton when announcing the opening of the investigation. (Original version in French by Léa Marchal)