PublishedMay 4, 2022

Foreign Subsidies: CCIA Offers Recommendations Ahead of Final Negotiations

Brussels, BELGIUM — Today, EU Member States and the European Parliament agreed their respective positions on the EU foreign subsidies proposal, clearing the way for negotiations on adopting the final legislation.

The Computer & Communications Industry Association (CCIA Europe) acknowledges the swift progress on this complex file and offers recommendations to the EU institutions to ensure the final agreement does not hinder foreign investment into the EU.

CCIA Europe welcomes the EU Council’s work to raise the notification thresholds, removing liability for economic operators that declare subsidies of subcontractors and suppliers in procurement bids, and the shorter timelines for both preliminary and in-depth investigations.

The shorter lookback period of five years, compared to the 10 years originally proposed by the European Commission, is key to the reduction of cumbersome and costly burdens on companies.

However, it is clear that companies will struggle to comply with these new rules. Certain provisions add compliance burden for companies of all sizes at a time of increased economic uncertainty. Moreover, the provisions related to public procurement remain unclear and may deter companies from participating in procurement processes.

That is why we urge lawmakers to address the following issues in their final negotiations. First of all, businesses need to be provided with a workable definition of what a foreign subsidy entails. A financial contribution should not be considered as such when the provision or purchase of goods and services is done following a competitive, transparent, and non-discriminatory tendering procedure.

Moreover, the balancing test should take into account the positive effects a subsidy may have beyond the internal market. In case of an acquisition, the only financial contributions to be taken into consideration should be those received by the acquirer.

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