Event
The EU Foreign Subsidy Regulation: How Should Undertakings Operating from the US Navigate Through It?
Virtual
Dr. Adina Claici and Dr. Kai-Uwe Kühn of BRG’s European Competition Policy practice, alongside Brussels-based counsel Michel Struys and Dr. Falk Schöning, discussed the European Union’s Foreign Subsidies Regulation (FSR). They were joined by Dr. Harry Broadman and Kelly Ann Shaw, who provided a US-centric perspective, with US firms active in the European Union subject to new obligations beginning October 12, 2023.
While the principles governing foreign subsidies under the EU FSR do not differ from one region to another, the type of foreign subsidies involved may vary significantly from one country to another. The regulation gives far-reaching powers to the European Commission (EC) to tackle distortive effects of direct and indirect financial support granted by US public authorities, be they at a federal, state, or local level.
The scope is so broad that it will have serious implications for many company activities. From October 12 companies engaging in deals affecting European businesses or in European public procurement projects will need to notify the EC. Also, M&A agreements signed from July 12, 2023, may need to later be notified to the EC if the transaction has not closed by October 12. This imposes new and demanding upfront information obligations on companies, with no exception for US companies, which can be expected to account for a large proportion of notifying companies under the FSR.
EU national jurisdictions may also play a role, as companies may try to rely on the FSR to seek damages or other remedies against competitors that would have received public support from third countries.
This webinar focused on the main challenges US companies will face through the regulation (including what is in scope, notification contents for transactions, and procurements) and offered practical tips to address those. We covered key aspects including what constitutes a subsidy, quantifying the advantage, what is market distortion, tools available to the EC, and effective compliance. We also explored opportunities to challenge competitors through the FSR.