The Foreign Subsidies Regulation is now in force – what you need to know

The European Commission’s (Commission) general investigative powers under the Foreign Subsidies Regulation (FSR) came into force on 12 July 2023, following publication of the Implementing Regulation on 10 July 2023. The notification requirements for concentrations and public procurement procedures will apply from 12 October 2023. M&A transactions entered into on or after 12 July 2023 that meet the thresholds for notification will need to be notified to the Commission if the transactions have not completed by 12 October 2023.

As a recap, the FSR has been designed to allow the Commission to review financial contributions by non-EU countries (referred to as “third countries” under the FSR) to businesses (referred to as “foreign financial contributions” under the FSR) to determine whether they are likely to distort markets within the EU. The FSR gives the Commission three tools to review these contributions:

1. a mandatory notification tool for M&A transactions;
2. a mandatory notification tool for EU public procurement processes; and
3. a general ex officio investigative tool.

The FSR affects companies operating globally and requires a proactive approach to ensure compliance. Read our full briefing to understand the key principles of the FSR (including an in-depth overview of what foreign financial contributions entail), the breadth of the new regime it introduces and how your business may be affected.

Should you have any questions about the FSR, or should you require any assistance to ensure that your business is “FSR ready”, please get in touch with your usual Eversheds Sutherland contact or a member of our global team listed below.