A draft implementing regulation for the Foreign Subsidies Regulation (FSR) will be published in December for public consultation, the European Commission (EC) official responsible for the issue said in Rome today (23 September).
Christof Schoser, head of Taskforce Third Country Subsidies at the EC's DG Comp, was speaking during a panel on the FSR held during the Lear Competition Festival in Rome.
He said that final sign off on the FSR by the European Parliament was anticipated in November or December.
Fellow panellists Elisabetta Righini, a partner with Latham & Watkins, and Sebastian Krujatz, the co-founder of Data + Law and former director of Singaporean state fund Temasek, raised concerns about the potential negative impact of the nascent law on companies and funds making notifications, given the broad definition of financial contributions under the FSR.
The FSR toolkit will mean deals where the buyer, one of the merging parties, or a JV generates EU turnover of EUR 500m or more and which ‘involves a foreign financial contribution’ of at least EUR 50m, will be subject to obligatory notification to the EC.
Companies will have to notify the EC of tenders in public procurements procedures where the estimated contract value is at least EUR 250m and the bid involves a foreign financial contribution of at least EUR 4m per third country.
In addition, the FSR empowers the Brussels-based agency to investigate, on its own initiative, all other market situations and to request an ad-hoc notification for smaller concentrations and public procurement procedures, if it suspects that a distortive foreign subsidy may be involved.
Schoser acknowledged that the scope of the FSR “casts a very wide net”, though he said the “margin of discretion” for what would need to be included on notification forms would be clearer when the draft implementing regulation is published.
“It will be difficult to narrow down [the data on the notification forms] from the beginning”, however, since that would “increase the chances for companies to circumvent it”.
Asked if the EC had been approached by foreign countries with queries about the FSR, Schoser revealed that “Canada and Singapore have approached us”, but did not expand on what precisely they had asked the EC.
Schoser said that the resourcing and staffing for enforcement of the FSR has yet to be determined, though he flagged the broader difficulties with budget discussions since DG Comp has a number of priorities, such as energy and the emergency Ukraine state aid scheme.
On the sidelines of the conference, Schoser said that more clarity on the budget for the FSR might emerge in the Autumn.