On 5 May 2021, the European Commission ("Commission") published a proposed Regulation, along with an impact assessment report, aiming to address potential distortions caused by foreign subsidies in the Single Market ("Proposed Regulation"). This Proposed Regulation will create substantial new obligations for companies if adopted in its current form.

There are three new obligations in particular to be aware of:

  1. The Commission will have the ability to initiate ex officio reviews of foreign subsidies in the preceding 10 years, meaning companies may have to comply with requests for information (RFIs) and be subject to inspections. In addition, the Commission may conduct inspections both in the EU and outside the EU (subject to certain conditions).

  2. Companies may have to notify the Commission of any transaction financed by foreign subsidies. This filing obligation is in addition to any applicable merger filing requirements at the EU level or at the national level (see proposed thresholds below).

  3. Any company wanting to participate in any public procurement in the EU with a value greater than EUR 250 million will have to notify the Commission prior to submitting its tender offer and to provide a substantial amount of information about all foreign financial contributions received in the past three years. The Commission can also intervene in procurement processes with a value below these thresholds on an ex officio basis.
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