On Friday 9 January, the European Commission adopted guidelines designed to increase legal certainty in the implementation of Regulation 2022/2560, which sets out procedures for determining whether foreign subsidies granted to companies operating in the European Union distort the internal market and therefore remedying such distortions (see EUROPE 12984/1).
Where a company operating within the single market has received a foreign subsidy, the EU institution may examine whether this subsidy strengthens the competitive position of that company and whether it would alter its behaviour or the dynamics of the market segment in which the company operates to the detriment of competitors.
A non-exhaustive list of indicators that could be used for the survey is provided: - the scope, amount, type (direct subsidies, preferential loan) and conditions of the foreign subsidy; - the size of the beneficiary company and its position within the internal market; - characteristics of the business sector; - the legal context.
Before the final award of a public contract or concession worth more than €250 million, the Commission may ask a bidding company whether it has received a foreign subsidy in the last three years (‘prior notification’), particularly if the subject of the contract relates to a sector of activity of strategic importance to the EU. The European institution is required to assess whether the company has used the subsidy to finalise its bid and whether the bid submitted enjoys an undue advantage over other bids.
The guidelines exempt from this measure contracts for amounts below the thresholds of the ‘standard public procurement’ Directive (2014/24), foreign grants of less than €4 million and grants awarded in certain exceptional circumstances.
The Commission may also require, prior to a merger, the notification of foreign subsidies in excess of €50 million received over the previous three years by a company wishing to acquire another company in the EU with a revenue in excess of €500 million.
See the European Commission guidelines: https://aeur.eu/f/k7o (Original version in French by Mathieu Bion)