ERT Response to the consultation on the Foreign Subsidies Regulation draft Implementing Regulation

ERT supports the goal of the Foreign Subsidies Regulation (“FSR”) of creating a level playing field for all undertakings operating in the EU internal market by ensuring that companies do not use subsidies granted outside the EU (therefore, not subject to State aid rules) to obtain an unfair advantage in M&A activities or public procurement.

ERT recognises the challenges faced by the European Commission (“Commission”) in the design of the draft Implementing Regulation (“Draft IR”). The FSR aims to address distortive subsidies granted by third countries: its wording as well as the powers it entrusts the Commission with are intentionally very broad to capture all potential forms of distortions. At the same time, the Commission must achieve this goal within the bounds of the principle of proportionality, requiring public action to be limited to the least onerous option for citizens and companies to meet this goal, including in terms of compliance. Hence, if the scope of the Draft IR is too narrow, the Commission may fail to investigate detrimental foreign subsidies, but, if it is too wide, it could lead to an excessive and unworkable administrative burden for companies and the Commission itself.

We have identified some improvements which should help achieve the overall objectives of the FSR in a more proportionate manner. Download the document to read it in full.