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ARTICLE · 20 AUGUST 2024

EU Commission Expands Foreign Subsidies Guidance

Norton Rose Fulbright
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The EU Foreign Subsidies Regulation, or FSR, is intended to prevent or remedy distortions of the EU internal market caused by "foreign" – meaning non-EU – subsidies benefitting companies active in the EU.

GlobalGovernment, Public Sector
Jay Modrall
Jay Modrall
Alexandra Rogers
Alexandra Rogers

The EU Foreign Subsidies Regulation, or FSR, is intended to prevent or remedy distortions of the EU internal market caused by "foreign" – meaning non-EU – subsidies benefitting companies active in the EU. The FSR draws on EU merger control, State aid and trade law, but it also introduces new legal concepts and procedures not fully explained in the regulation or the July 2023 implementing regulation.

The FSR requires the Commission to issue guidance on certain issues by January 2026. Meanwhile, a Staff Working Document (the SWD) provides some helpful indications. The SWD discusses the concept of distortion in the internal market and the application of the so-called "balancing test." The SWD supplements guidance the Commission has provided in the form of Frequently Asked Questions published by DG COMP and DG GROW, as well as a helpful FSR Brief on early lessons from FSR enforcement.

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