Regulation on distortive foreign subsidies

Reference is made to the European Commission's proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market (COM(2021) 233 final). The proposed Regulation addresses distortions on the internal market caused by foreign subsidies that fall outside the EU state aid, merger control and antitrust rules.

AFEP, the French association of large companies, welcomes the adoption of the proposal for a regulation on foreign subsidies distorting the internal market. With a view to contributing to the early stage of the legislative process, AFEP shares a set of preliminary comments on the proposed regulation in the position paper in attachment.

Please see attached a submission on behalf of the Merger Streamlining Group (the “Group”). The Group's membership consists of multinational firms with a common interest in promoting the efficient and effective review of international merger transactions.

The American Chamber of Commerce to the EU (AmCham EU) welcomes the opportunity to provide feedback on the Proposal for a Regulation on foreign subsidies distorting the internal market. As an association we strive to facilitate business relations between the US and the EU. We represent American companies committed to and invested in Europe, advocating for their fair treatment across the EU single market.

CPME, the Confederation of Small and Medium-Sized Enterprises, is an inter-branch employers’ organisation which defends the interests of French small and medium-sized enterprises in all sectors: Industry, services, commerce, crafts, liberal professions and the social and solidarity-based economy.

Filed in French · English published by the European Commission

FORATOM, the trade association representing the interest of the nuclear industry in the EU, welcomes the opportunity to participate in the public consultation related to the EC Proposal for a regulation (COM(2021)223) on foreign subsidies distorting the internal market. FORATOM also welcomes the EC initiative which is very ambitious in trying to restore a level playing field for EU companies.

FNTP welcomes the Commission’s initiative to address unfair competition from third-country companies operating in the internal market. Among the positive points to be noted, the FNTP notes that the Commission would have exclusive competence to ensure uniform application of the Regulation in the EU.

Filed in French · English published by the European Commission

EUROFER welcomes the opportunity to comment on the Proposal on foreign subsidies distorting the internal market and calls the institutions to make of this a comprehensive and broadly covering tool which goes beyond concentrations and public procurement.

Please find enclosed WB6 CIF’s Contribution to the Commission’s Proposal for a Regulation on Foreign Subsidies Distorting the Internal Market. WB6 CIF previously contributed to the public consultation on the Commission’s White Paper on Levelling the Playing Field as regards Foreign Subsidies. WB6 CIF continues to be interested in this topic given its importance for the businesses in the WB that WB6 CIF represents.

The Korea Business Association Europe(KBA Europe), representing over 300 Korean companies in Europe, welcomes this feedback opportunity regarding European Commission’s proposal on the Foreign Subsidies Regulation. In this feedback, the KBA Europe would like to point out several issues for further discussion. Please find attached our detailed position paper.

The Commission's Proposal for a regulation regarding foreign subsidies is promising but requires substantial clarifications and revisions before it can become an effective tool for addressing the foreign subsidies distorting the EU internal market.

EurECCA welcomes the proposed new regulation to address distortions caused by foreign subsidies. While European airlines and their employees are already suffering from unfair competition from non-EU airlines, this situation of unfair competition is becoming more and more untenable since the Covid-19 health crisis.

The China Chamber of Commerce to the EU (CCCEU) is a non-governmental organisation founded in Brussels in 2018 by Chinese invested corporations based in Europe. The CCCEU speaks on behalf of about 1,000 Chinese enterprises in the EU.

The Mechanical Engineering Industry Association (VDMA) represents over 3.300 mechanical engineering companies in Germany and Europe. The industry stands for innovation, export orientation, medium-sized businesses and employs around 4 million people in Europe, of which more than 1 million are employed in Germany alone.

Under the EU State Aid regime, the administrative burden on notification falls on EU Member States. Under the Proposed Regulation, administrative burden of notification for concentrations falls on companies, creating new obligations that risk delaying merger and acquisition procedures and disincentivising investments in the EU.

The Airline Coordination Platform welcomes the proposed new regulation to address distortions caused by foreign subsidies and emphasizes the timeliness of such a regulation, particularly in the wake of the COVID-19 pandemic that hit the EU aviation industry hard and as a result put EU airlines in a vulnerable situation, more exposed to foreign investments.

We welcome the proposed Regulation which we believe is a timely and much-needed EU tool to address distortive behaviours affecting competition in the internal market. To ensure better clarity and effectiveness of the Regulation, we would suggest the following amendments: 1) Article 2 on Existence of a foreign subsidy It should be stated explicitly that the Regulation applies equally to all foreign subsidies granted…

Community of European Railway and Infrastructure Companies (CER) would like to thank the European Commission for the opportunity to respond to this public consultation on Proposal for Regulation on foreign subsidies distorting the internal market. Please find CER reply to the public consultation attached.

ESMIG welcomes the proposal for a Regulation on foreign subsidies distorting the internal market. ESMIG members are confronted to this situation in the specific context of public procurements for the national rollouts and solutions of smart meters in the European Union.

E4FC welcomes the proposed new regulation to address distortions caused by foreign subsidies and emphasizes the timeliness of such a regulation, in view of the current weakened state of the European airline industry that exposes the sector to direct or indirect takeovers. European airlines and its employees have been affected by unfair competition from state-subsidised third country airlines for years.

The Austrian Trade Union Confederation welcomes in principle the Commission’s intentions to strengthen the protection against unfair subsidies from third countries. Third country subsidies to companies operating in the EU have in part also led to serious market distortions in the EU’s internal market.

Filed in German · English published by the European Commission

We are of the view that the key defined term of foreign subsidies under the Proposal is too broad and ambiguous, making the discretion of the agency too wide, capturing overbroad and unnecessarily scope of activities even beyond the legislative purpose, and would likely create regulatory tools that are inconsistent with those applicable to “pure” EU undertakings, thereby discriminating undertakings originated from…

FEPORT represents 1225 private port companies and terminals performing cargo handling and logistics related operations in European sea ports. FEPORT subscribes to the White Paper findings and is supportive of a proposal aimed at addressing those distortions that fall outside the EU State aid, merger control and antitrust rules, and the detrimental effects of distortive foreign subsidies in the cases of…

DIGITALEUROPE welcomes efforts by the European Commission to address the distortion caused by foreign subsidies in the Single Market, which may provide certain businesses an unfair competitive advantage in the global market. Any new instrument should be focused on identifying, assessing, and mitigating distortion caused specifically by subsidies while remaining proportionate, fair and non-discriminatory.

As previously explained in previous contributions, there is an increasing influx of bidders from third country economic operators. In the rail supply sector, significant price differences (ranging from 20 to 30%) have been observed in projects awarded to certain rail State-owned Enterprises, in the EU and in other continents/countries.

The Federal Chamber of Labour (BAK) is the statutory representation of around 3,7 million employees and consumers in Austria for all social, economic and consumer policy matters. The BAK has already assessed the Commission’s initiative in the context of the White Paper preceding the Regulation and has sent important requests for interest.

Filed in German · English published by the European Commission

MEDEF broadly supports the draft EU regulation on foreign subsidies to address distortions of competition in the single market. The latter includes a number of comments and priorities expressed by French companies during the public consultation on the Commission’s White Paper. Our main reservation relates to the effectiveness of tools 2 and 3 on mergers and public procurement as the thresholds are too high.

Filed in French · English published by the European Commission

The Confederation of Industry is the leading business lobbying organization in the Czech Republic providing a voice for employers at the national and international level. We are here to assert the interest of our members. We speak for companies and associations of all shapes and sizes across the key sectors of industry, including many SMEs.

The proposed Regulation on foreign subsidies distorting the internal market (RFSDIT) is both (1) undesirable and (2) problematic, in particular as it concerns the investigation of foreign subsidies linked to public procurement procedures. The following is limited to chapter 4. 1.

The Swedish Construction Federation’s comments on “Inception Impact Assessment on a Foreign Subsidy Instrument” A future instrument in addressing distortive foreign subsidies must entail legislative action while the EU simultaneously strives for improved international rules. We are therefore in favour of Option 2 in combination with Option 3, in order to ensure fair competition on the internal market.

FEPORT welcomes the opportunity to provide a feedback on the Commission’s roadmap regarding the White Paper on Foreign subsidies. FEPORT believes that it is essential to tackle the fundamental regulatory gap in existing EU legislation on competition, trade, public procurement and in EU funding as regards distortions arising from foreign subsidies in the Internal Market, which the White Paper itself recognised.

Acknowledging growing concerns about the distortions caused by foreign subsidies within the Internal Market, the initiative undertaken by the Commission to present proposal of regulation in order to address these interventions generally and also in the specific cases of acquisitions and public procurement is highly welcomed.

AFEP, the French Association of Large Companies, welcomes the publication of the roadmap for the inception impact assessment for a possible legislative initiative to comprehensively handle foreign subsidies likely to distort general competition as well as competition in tendering procedures on the EU internal market.

The German Mechanical Engineering Industry Association (VDMA) is in favour of the European Commission taking a closer look at subsidies from third countries. These subsidies distort production costs and influence competition in the EU’s Internal Market. They create thus disadvantages for European market players in the mechanical engineering industry.

The Airline Coordination Platform (ACP) welcomes the European Commission’s initiative addressing possi-ble distortions caused by foreign subsidies. When drafting a legislative proposal, the European Commission should ensure that the aviation industry is included in the scope of a future legislative framework on foreign subsidies.

Europeans For Fair Competition (E4FC) welcomes the European Commission’s plans to propose a regulation that addresses distortions caused by foreign subsidies in the internal market. E4FC agrees that the granting of (direct and indirect) subsidies can lead to unfair competition and undermine the level playing field, thereby distorting the EU internal as well as the international market.

BusinessEurope welcomed the White Paper on Foreign Subsidies and submitted its comments on the dedicated consultation in September 2020. To ensure that the instrument delivers on its objective, is efficient, and does not impose an undue burden on companies, it is essential that the different modules presented therein be subject to a thorough impact assessment (IA), particular regarding scope, thresholds and…

The BDI supports the Commission in effectively addressing competition-distorting third country subsidies. In its opinion (Annex) to the White Paper (COM (2020) 253 final), the BDI proposed, inter alia, complementary measures.

Filed in German · English published by the European Commission

The Danish Chamber of Commerce supports the efforts to avoid distortions in the single market as a result of foreign subsidies. There is a real need to adress these issues. EU member states are subject to very strict regulation, that only as an exception allows state aid for European businesses.

1.1 InterDigital, Inc ("InterDigital") is one of the world’s largest for‐profit research and development companies. We have more than 300 engineers and scientists around the world, and approximately half of our global workforce is based in Europe. We are focused on developing the mobile and video technologies that are at the core of devices, networks, and services worldwide.

Belgium welcomes the idea of tackling the topic of foreign subsidies as it would contribute to the well-functioning of the single market and enhance fair competition. It has detailed its position in the answer to the White Paper on levelling the playing field as regards foreign subsidies and therefore refers to such answer (see attachment).

EIC fully supports the proposed building blocks for new legal instruments tackling distortive foreign subsidies and holds that taking legislative action at EU level (Option 2) is the most promising way forward. We are in favour of developing new legal instrument(s) – in particular dedicated to the identification of foreign subsidies in public procurement – which provide assessment mechanisms regarding distortive…

EUROFER supports the ambitious White Paper on Foreign Subsidies and agrees with the Commission on the presence of a regulatory gap, which we believe exists and needs to be filled: •The steel sector has experienced the near impossibility to have WTO actions initiated tackling third country subsidies and State-Owned Enterprises at the root, due to the prohibitive evidence and injury requirements to take action under…

SEA Europe is deeply concerned by the lack of effectively applicable trade defense tools able to protect the European maritime technology industry (encompassing shipbuilding and maritime equipment) from rising distortions caused by foreign subsidies.

The Federal Ministry for Digital and Economic Affairs welcomes the presentation by the European Commission of the White Paper ‘Ensuring a level playing field for subsidies from third countries’ and supports an ambitious timetable for finding solutions to the problems identified in order to ensure fairness in global competition.

Filed in German · English published by the European Commission

AEGIS Europe is increasingly concerned by distortions on the EU's internal market created by foreign subsidies. As confirmed in Chapter 3 of the Commission's White Paper on levelling the playing field as regards foreign subsidies, this problem is not adequately addressed by existing EU law. Non-binding guidance alone would not fill this gap and reliance on international rule-making would only delay essential action.

UNIFE appreciates the possibility to comment on the Inception Impact Assessment (IIA) of a Commission proposal(s) for Regulation(s) to address distortions caused by foreign subsidies in the internal market generally and in the specific cases of acquisitions and public procurement.

1) In it’s IIA the Commission states, that at this stage, a possible legal basis for EU interventions could be Article 207 TFEU (common commercial policy), potentially in combination with Article 114 TFEU (internal market).