Insights from The Courts Service Annual Report 2022

The Foreign Subsidies Regulation (“FSR”) introduces a notification obligation for certain transactions and public tenders in all economic sectors, commencing 12 October 2023. EU companies who receive financial aid from non-EU entities are mandated to notify the European Commission of the foreign subsidy, and to obtain approval prior to the completion of the transaction (or award in the case of a public tender).


The procedural measures are intended to address potential distortions in the EU internal market which may be caused by foreign subsidies. While existing EU State aid rules govern the distortion in the internal market on account of subsidies obtained within Member States, the FSR was enacted to fill in the gap caused by financial contributions from non-EU countries to companies active in the EU, and to ensure that foreign subsidies do not give undue advantage to any company within the EU.

Which Mergers and Acquisitions are caught?

From 12 October 2023, the mandatory notification requirement applies to mergers, acquisitions, and/or joint ventures as follows:

  1. At least one of the merging entities, the acquired company or the joint venture is established in the EU and generates an aggregate turnover in the EU of at least € 500 million; and
  2. The entities were granted combined aggregate financial contributions of more than € 50 million from third countries in the three years prior to the conclusion of the agreement, the announcement of the public bid, or acquisition of controlling interest.

In addition, notification of foreign subsidies in public tenders applies to the following:

  1. The estimated value of the public tender, or a specific procurement under the dynamic purchasing system, is at least €250 million, or when the procurement is divided into lots, the total value of the lots for which the bidder is bidding is at least €125 million; and
  2. The economic operator, including subsidiaries, holdings companies, among others, was granted aggregate financial subsidies by a third country of €4 million or more within three years prior.

Foreign subsidies include capital injections, grants, loans, among others, and measures that relate to tax, such as exemptions or additional rights.

The notification requirement for certain transactions and public tenders applies from 12 October 2023. However, transactions signed on or after 12 July 2023, but which have not yet been implemented by 12 October 2023, are also covered by the notification requirements under the FSR.


Qualifying transactions and public tenders must be notified to the European Commission after the conclusion of the agreement, bid, or acquisition or a controlling interest but before its implementation. The European Commission has provided notification forms covering these transactions. The notification forms require certain information and supporting documents that relate to the parties, transactions, aid, and other information to help the European Commission assess the nature of the financial subsidy. Parties are encouraged to undergo pre-notification discussions with the European Commission prior to the notification.


Parties to qualifying transactions and public tenders are now under an obligation to gather all pertinent information about financial subsidies received from non-EU entities, and to notify the European Commission of the foreign subsidy. The timeline for completion of deals should also now reflect these additional notification requirements, where relevant.

For more information, please contact us at or your usual contact at Vincent & Beatty LLP.


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