What Is A Foreign Subsidy?

Regulation (EU) 2022/2560 on Foreign Subsidies (the "FSR") aims to address distortions caused by foreign subsidies in the single market. In this part of our FSR Insight Series, we explain the fundamental notion of what constitutes a "foreign subsidy" within the meaning of the FSR. You will find a basic definition in Article 3 FSR, with some further considerations in recitals 11 to 16 of the Regulation.

What does "foreign" mean?

Only interventions by third countries fall under the FSR. In this context, all countries that are not members of the European Union are considered "foreign". This includes members of the European Economic Area (i.e. Iceland, Liechtenstein and Norway) as well as the countries with which the EU has entered into specific trade agreements, such as Switzerland, the United Kingdom, the Balkan countries or Turkey. EU Member States are exempt from the FSR because state aid attributable to them is subject to the stricter rules under Articles 107 et