Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market

CHAPTER 1

GENERAL PROVISIONS

Article 1

Subject matter and scope

Article 2

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘an undertaking’, in the context of public procurement procedures, means ‘economic operator’ as defined in Article 1, point (14) of Directive 2009/81/EC, Article 5, point (2) of Directive 2014/23/EU, Article 2(1), point (10) of Directive 2014/24/EU and Article 2, point (6) of Directive 2014/25/EU;

(2) ‘contract’, in the context of public procurement procedures and unless otherwise specified, means a public contract as defined in Article 2(1), point (5) of Directive 2014/24/EU, ‘contracts’ as defined in Article 1, point (2) of Directive 2009/81/EC and ‘supply, works and service contracts’ as defined in Article 2, point (1) of Directive 2014/25/EU, as well as ‘concessions’ as defined in Article 5, point (1) of Directive 2014/23/EU;

(3) ‘a public procurement procedure’ means: (a) any type of award procedure covered by Directive 2014/24/EU for the conclusion of a public contract or Directive 2014/25/EU for the conclusion of a supply, works and service contract; (b) a procedure for the award of a works or a service concession covered by Directive 2014/23/EU; (c) procedures for awarding contracts falling under Directive 2009/81/EC, unless exempted by Member States on the basis of Article 346 TFEU; (d) procedures for the award of contracts referred to in Article 10(4), point (a) of Directive 2014/23/EU, Article 9(1), point (a) of Directive 2014/24/EU or Article 20(1), point (a) of Directive 2014/25/EU;

(4) ‘contracting authority’ in the context of public procurement procedures, means contracting authority as defined in Article 1, point (17) of Directive 2009/81/EC, Article 6 of Directive 2014/23/EU, Article 2(1), point (1) of Directive 2014/24/EU and Article 3 of Directive 2014/25/EU;

(5) ‘contracting entity’ in the context of public procurement procedures, means contracting entity as defined in Article 1, point (17) of Directive 2009/81/EC, Article 7 of Directive 2014/23/EU and Article 4 of Directive 2014/25/EU;

(6) ‘a multi-stage procedure’ means a public procurement procedure in accordance with Articles 28 to 32 of Directive 2014/24/EU and Articles 46 to 52 of Directive 2014/25/EU, either the restricted procedure, a competitive procedure with negotiation, a negotiated procedure without prior publication, a competitive dialogue or an innovation partnership, or a similar procedure according to Directive 2014/23/EU.

Article 3

Existence of a foreign subsidy

For the purposes of this Regulation, a financial contribution shall include, inter alia:

(a) the transfer of funds or liabilities, such as capital injections, grants, loans, loan guarantees, fiscal incentives, the setting off of operating losses, compensation for financial burdens imposed by public authorities, debt forgiveness, debt to equity swaps or rescheduling;

(b) the foregoing of revenue that is otherwise due, such as tax exemptions or the granting of special or exclusive rights without adequate remuneration; or

(c) the provision of goods or services or the purchase of goods or services.

A financial contribution provided by a third country shall include a financial contribution provided by:

(a) the central government and public authorities at all other levels;

(b) a foreign public entity whose actions can be attributed to the third country, taking into account elements such as the characteristics of the entity and the legal and economic environment prevailing in the State in which the entity operates, including the government’s role in the economy; or

(c) a private entity whose actions can be attributed to the third country, taking into account all relevant circumstances.

Article 4

Distortions in the internal market

A distortion in the internal market shall be deemed to exist where a foreign subsidy is liable to improve the competitive position of an undertaking in the internal market and where, in doing so, that foreign subsidy actually or potentially negatively affects competition in the internal market. A distortion in the internal market shall be determined on the basis of indicators, which can include, in particular, the following:

(a) the amount of the foreign subsidy;

(b) the nature of the foreign subsidy;

(c) the situation of the undertaking, including its size and the markets or sectors concerned;

(d) the level and evolution of economic activity of the undertaking on the internal market;

(e) the purpose and conditions attached to the foreign subsidy as well as its use on the internal market.

Article 5

Categories of foreign subsidies most likely to distort the internal market

A foreign subsidy is most likely to distort the internal market where it falls under one of the following categories:

(a) a foreign subsidy granted to an ailing undertaking, namely an undertaking which will likely go out of business in the short or medium term in the absence of any subsidy, unless there is a restructuring plan that is capable of leading to the long-term viability of that undertaking and that plan includes a significant own contribution by the undertaking;

(b) a foreign subsidy in the form of an unlimited guarantee for the debts or liabilities of the undertaking, namely without any limitation as to the amount or the duration of such guarantee;

(c) an export financing measure that is not in line with the OECD Arrangement on officially supported export credits;

(d) a foreign subsidy directly facilitating a concentration;

(e) a foreign subsidy enabling an undertaking to submit an unduly advantageous tender on the basis of which the undertaking could be awarded the relevant contract.

Article 6

Balancing test

Article 7

Commitments and redressive measures

Commitments or redressive measures may consist, inter alia, of the following:

(a) offering access under fair, reasonable, and non-discriminatory conditions to infrastructure, including research facilities, production capabilities or essential facilities, that were acquired or supported by the foreign subsidies distorting the internal market unless such access is already provided for by Union legislation;

(b) reducing capacity or market presence, including by means of a temporary restriction on commercial activity;

(c) refraining from certain investments;

(d) the licensing on fair, reasonable and non-discriminatory terms of assets acquired or developed with the help of foreign subsidies;

(e) the publication of results of research and development;

(f) the divestment of certain assets;

(g) requiring the undertakings to dissolve the concentration concerned;

(h) the repayment of the foreign subsidy, including an appropriate interest rate, calculated in accordance with the method set out in Commission Regulation (EC) No 794/2004 (¹);

(i) requiring the undertakings concerned to adapt their governance structure.

Article 8

Information on future concentrations and public procurement procedures

In decisions adopted pursuant to Articles 11, 25 and 31, and where proportionate and necessary, the undertaking under investigation may be required to inform the Commission, for a limited period of time, of its participation in concentrations or public procurement procedures. That requirement is without prejudice to notification obligations pursuant to Articles 21 and 29.

CHAPTER 2

EX OFFICIO REVIEW AND GENERAL PROVISIONS FOR THE REVIEW OF FOREIGN SUBSIDIES

Article 9

Ex officio review of foreign subsidies

Such reviews shall not result in the cancellation of the decision awarding a contract or in a termination of a contract.

Article 10

Preliminary review

Where the Commission considers that the information referred to in Article 9 indicates the possibility that a foreign subsidy distorting the internal market exists, the Commission shall seek all the information it considers necessary to assess, on a preliminary basis, whether the financial contribution under examination constitutes a foreign subsidy and whether it distorts the internal market. To that end, the Commission may, in particular:

(a) request information in accordance with Article 13; and

(b) conduct inspections within and outside the Union in accordance with Article 14 or Article 15.

Where the Commission, based on the preliminary review, has sufficient indications that an undertaking has been granted a foreign subsidy that distorts the internal market, it shall:

(a) adopt a decision to initiate an in-depth investigation (‘decision to initiate the in-depth investigation’) which summarises the relevant issues of fact and law and includes the preliminary assessment of the existence of a foreign subsidy and of the actual or potential distortion in the internal market;

(b) inform the undertaking under investigation;

(c) inform Member States and, where the in-depth investigation is initiated in relation to a public procurement procedure, the contracting authority or contracting entity concerned; and

(d) publish a notice in the Official Journal of the European Union inviting the submission of views in writing within a period of time prescribed by the Commission.

Article 11

In-depth investigation

The Commission shall adopt an implementing act in the form of a decision to raise no objection (‘no objection decision’) where it finds that:

(a) the preliminary assessment as set out in its decision to initiate the in-depth investigation is not confirmed; or

(b) a distortion in the internal market is outweighed by positive effects within the meaning of Article 6.

That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2).

Article 12

Interim measures

To preserve competition in the internal market and prevent irreparable damage, the Commission may adopt an implementing act in the form of a decision ordering interim measures, where:

(a) there are sufficient indications that a financial contribution constitutes a foreign subsidy and distorts the internal market; and

(b) there is a risk of serious and irreparable damage to competition on the internal market.

That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2).

Article 13

Requests for information

A request for information pursuant to paragraph 2 or 3 shall:

(a) state its legal basis and its purpose, specify what information is required and set an appropriate time limit within which the information is to be provided;

(b) contain a statement that if the information supplied is incorrect, incomplete or misleading, the fines or periodic penalty payments provided for in Article 17 could be imposed;

(c) contain a statement that, pursuant to Article 16, a lack of cooperation allows the Commission to take a decision on the basis of the facts that are available to it.

The Commission may interview a natural or legal person who consents to be interviewed for the purpose of collecting information relating to the subject matter of an investigation. Where an interview is not conducted on the premises of the Commission or by telephone or other electronic means, prior to the interview the Commission shall:

(a) inform the Member State in whose territory the interview is to take place; or

(b) obtain the agreement of the third country in whose territory the interview is to take place.

Article 14

Inspections within the Union

Where the Commission undertakes such an inspection, the officials authorised by the Commission to conduct an inspection shall be empowered to:

(a) enter any premises, land and means of transport of the undertaking or association of undertakings;

(b) examine books and other business records, irrespective of the medium on which they are stored,access any information which is accessible to the entity subject to the inspection and take, or request copies or extracts from, those books or records;

(c) ask any representative or member of staff of the undertaking or association of undertakings for explanations of facts or documents relating to the subject-matter and purpose of the inspection and to record the answers;

(d) seal any business premises and books or records for the period of time of, and to the extent necessary for, the inspection.

The undertaking or association of undertakings shall submit to inspections ordered by decision of the Commission. The officials and other accompanying persons authorised by the Commission to conduct an inspection shall exercise their powers upon production of a Commission decision:

(a) specifying the subject matter and purpose of the inspection;

(b) containing a statement that, pursuant to Article 16, a lack of cooperation allows the Commission to take a decision on the basis of the facts that are available to it;

(c) referring to the possibility to impose fines or periodic penalty payments provided for in Article 17; and

(d) stating the right to have the decision reviewed by the Court of Justice pursuant to Article 263 TFEU.

Article 15

Inspection outside the Union

In order to carry out the duties assigned to it by this Regulation, the Commission may conduct inspections in the territory of a third country, provided that the government of that third country has been officially notified and raises no objection to the inspection. The Commission may also ask the undertaking or association of undertakings to give its consent to the inspection. Article 14(1), (2), and (3), points (a) and (b) shall apply mutatis mutandis.

Article 16

Non-cooperation

The Commission may take a decision pursuant to Article 10, Article 11, Article 25(3), point (c) or Article 31(2), on the basis of the facts available, where an undertaking under investigation or a third country that granted the foreign subsidy:

(a) provides incomplete, incorrect or misleading information in response to a request for information under Article 13;

(b) fails to provide the information requested within the time limit prescribed by the Commission;

(c) refuses to submit to the Commission’s inspection within or outside the Union ordered under Article 14 or Article 15; or

(d) otherwise impedes the preliminary review or the in-depth investigation.

Article 17

Fines and periodic penalty payments

The Commission may, by decision, impose fines or periodic penalty payments where an undertaking or an association of undertakings, intentionally or negligently:

(a) supplies incomplete, incorrect or misleading information in response to a request for information under Article 13, or does not supply the information within the prescribed time limit;

(b) produces the required books or other records related to the business in incomplete form during inspections under Article 14;

(c) in response to a question asked in accordance with Article 14(2), point (c): (i) gives an incorrect or misleading answer; (ii) fails to rectify within a time-limit set by the Commission an incorrect, incomplete or misleading answer given by a member of staff; or (iii) fails or refuses to provide a complete answer on facts relating to the subject-matter and purpose of an inspection ordered by a decision adopted pursuant to Article 14(3);

(d) refuses to submit to inspections ordered under Article 14 or has broken seals affixed in accordance with Article 14(2), point (d); or

(e) fails to comply with the conditions for access to the file or the terms of disclosure imposed by the Commission pursuant to Article 42(4).

Where an undertaking does not comply with a decision with commitments pursuant to Article 11(3), a decision ordering interim measures pursuant to Article 12 or a decision with redressive measures pursuant to Article 11(2), the Commission may, by decision, impose:

(a) fines not exceeding 10 % of the aggregate turnover of the undertaking concerned in the preceding financial year; or

(b) periodic penalty payments not exceeding 5 % of the average daily aggregate turnover of the undertaking concerned in the preceding financial year for each day of non-compliance, starting from the day of the Commission decision imposing such penalty payments, until the Commission finds that the undertaking concerned complies with the decision.

The Commission may also impose such fines or periodic penalty payments where an undertaking does not comply with a decision adopted pursuant to Article 11, 25 or 31, which obliged the undertaking to inform the Commission of its future participation in concentrations or public procurement procedures pursuant to Article 8.

Article 18

Revocation

The Commission may revoke a decision taken pursuant to Article 11(2), (3) or (4), Article 25(3), and Article 31(1), (2) or (3), and adopt a new implementing act in the form of a decision in any of the following cases where:

(a) the undertaking to which the initial decision was addressed acts contrary to its commitments or the redressive measures imposed;

(b) the initial decision was based on incomplete, incorrect or misleading information;

(c) commitments or redressive measures are not effective.

That implementing act shall be adopted in accordance with the advisory procedure referred to in Article 48(2).

CHAPTER 3

CONCENTRATIONS

Article 19

Distortions in the internal market caused by foreign subsidies in concentrations

When assessing whether a foreign subsidy in a concentration distorts the internal market within the meaning of Article 4 or 5, that assessment shall be limited to the concentration concerned. Only foreign subsidies granted in the three years prior to the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest shall be considered in the assessment.

Article 20

Concentrations and notification thresholds

For the purposes of this Regulation, a concentration shall be deemed to arise where a change of control on a lasting basis results from either of the following:

(a) the merger of two or more previously independent undertakings or parts of undertakings;

(b) the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings.

For the purposes of this Regulation, a notifiable concentration shall be deemed to arise where, in a concentration:

(a) at least one of the merging undertakings, the acquired undertaking or the joint venture is established in the Union and generates an aggregate turnover in the Union of at least EUR 500 million; and