On Friday 26 July, the European Commission published an internal document clarifying certain aspects of the Regulation against unfair foreign subsidies (FSR). These are mainly the conditions that apply to foreign subsidies in order to be considered unfair. The authors of the document, which is intended to be provisional and non-binding, detail the principles of distorted competition in the internal market and the cases in which they apply.
Among other things, they specify the need for a link between a foreign subsidy received and economic activity in the single market. The case of an interest-free loan granted by a third country to a European entity active in the internal market constitutes, for example, an apparent connection between the subsidy and the activity in the internal market.
The link is less clear in other cases, such as a foreign subsidy granted to a subsidiary that is not yet active in the internal market, but whose purpose is precisely to develop an activity there. In such situations, the Commission can analyse the company’s practice to ensure that there is no cross-subsidisation leading to a competitive advantage.
The Commission document provides further explanations of the concepts of distortion of the internal market and distortion of competition.
The Commission specifies that it will develop these clarifications further with practice and concrete cases.
See the internal document: https://aeur.eu/f/d5d (Original version in French by Léa Marchal)