On 5 May 2021, the European Commission proposed legislation that would revolutionize the rules on foreign subsidies in the EU. What the Commission has in mind is nothing less than an entirely new regulatory notification regime akin to the EU Merger Regulation and the control of State Aid. Under the proposed regime, the Commission would have broad powers to investigate subsidies granted by non-EU governments to companies engaging in economic activity in the EU. In line with the Commission’s 2020 White Paper on foreign subsidies, the proposed legislation would introduce an obligation for companies that have received foreign subsidies to notify M&A deals and bids submitted in public procurement procedures. In addition, the Commission would be empowered to investigate ex officio all other market situations on potentially distortive foreign subsidies.
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