EU Foreign Subsidies Regulation: Publication Of Draft Implementing Rules

On February 6, 2023, the European Commission (EC) published a draft Implementing Regulation (the Implementing Regulation) setting out rules and procedures for the application of the Foreign Subsidies Regulation (FSR).¹ The FSR, which entered into force last month and will start applying on July 12, 2023, allows the EC to investigate financial contributions granted by non-EU countries to companies operating in the EU and redress their distortive effects (see our client alert). Noncompliance can trigger fines of up to 10% of the groupwide aggregate turnover (aside from reputational risks).

The Implementing Regulation clarifies important aspects relating to the FSR's application regarding, among other things, the EC's powers of investigation, deadlines and the calculation of time limits, commitments and redressive measures, access to file, confidentiality, and the parties' rights of defense. It also provides important guidance on FSR notifications within the