The Foreign Subsidies Regulation (FSR) is the EU's response to foreign subsidies not tackled by the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...

(WTO) framework, notably from China. It aims to prevent subsidies that distort trading conditions. Starting on 12 July 2023, companies receiving distortive amounts of subsidies from non-EU countries can no longer take part in large company mergers that would affect the EU internal market. Furthermore, these companies can no longer obtain large public procurement contracts in the EU. The mergers affecting the internal market must be notified to the European Commission's competition branch ( DG COMP), whereas the large public contracts must be notified to the internal market directorate ( DG GROW). DG GROW can also itself initiate investigations of any kind of distortive subsidies, so-called ''ex-officio'' investigations. The Foreign Subsidies Regulation sits within a broader toolkit consisting of the EU subsidy ("

state aid State aid in the European Union is the name given to a subsidy or any other aid provided by a government that distorts competition. Under European Union competition law, the term has a legal meaning, being any measure that demonstrates any of the ...

") control, the

EU FDI screening framework The European Union's foreign direct investment screening framework is defined in its FDI screening Regulation. The Regulation applies in all member states directly. It does not currently harmonise the FDI screening procedures of the EU member s ...

, and the WTO Agreement on Subsidies and Countervailing Measures.

References

Foreign trade of the European Union Trade policy Competition law {{EU-law-stub