Foreign Subsidies Regulation: Additional Hurdle For Irish Dealmakers

Irish dealmakers involved in transactions where any of the parties are beneficiaries of foreign subsidies may be subject to an additional mandatory notification requirement under the new EU Foreign Subsidies Regulation ("FSR") where the thresholds are met. This new requirement to notify the European Commission ("EC") in such instances will go live on 12 October 2023. This additional burden will sit alongside existing merger control or foreign investment notification requirements and further impact completion timelines.

Scope of FSR

While support by Member States is assessed under existing EU state aid rules, the EC has long perceived a "regulatory gap" given the absence of a comparable regime to review financial contributions by non-EU countries that have distortive effects. The FSR has therefore been introduced to address the distortive effects that non-EU subsidies may have on the EU internal market.