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Regulating distortive foreign subsidies in the internal market: Council adopts position

05.05.2022

Regulating distortive foreign subsidies in the internal market: Council adopts position

Source: Council of the European Union

To ensure a level playing field for all companies operating in the internal market, member states today agreed a negotiating mandate for the regulation on foreign subsidies distorting the internal market.

The regulation aims to address the distortions created by subsidies granted by non-EU countries to companies operating in the EU’s single market. It establishes a comprehensive framework for the Commission to investigate any economic activity benefiting from a third-country subsidy on the internal market and to set up a specific framework for subsidies granted by third countries in the context of large concentrations and large public procurement procedures.

Balancing test. As is the case under the EU state aid control framework, if the Commission finds that a foreign subsidy exists and that it distorts competition, it will perform a balancing test. This is a tool to assess the balance between the positive and negative effects of a foreign subsidy.

The Council text clarifies the criteria and procedures for applying this test, including through the publication of guidance.

To know more: HERE