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The EU Foreign Subsidies Regulation: Implications for Companies in Switzerland - Webinar

The EU Foreign Subsidies Regulation: Implications for Companies in Switzerland - Webinar

Published: 10 July 2023

AUTHORS
Partner, Head of Competition
Managing Partner
Published: 10 July 2023
AUTHORS

Marcel Meinhardt

Partner, Head of Competition

Astrid Waser

Partner

Benoît Merkt

Managing Partner

Sevan Antreasyan

Partner

EXPERTISE Competition and Regulated Markets

As of July 12, 2023, the European Foreign Subsidies Regulation (FSR) will apply. The European Commission can now examine concentrations that meet the filing thresholds for subsidies from non-EU Member States distorting the internal market. This review is in addition to the merger control procedures and foreign investment screenings. The FSR also introduces a comprehensive subsidy control for public procurement procedures.

The FSR also affects companies and groups of companies operating in Switzerland and the EU.

The key points of the FSR can be summarized as follows:

  • The FSR provides the European Commission with three new powers to effectively counter subsidies from non-EU Member States distorting the internal market: (1) the possibility to open investigations on its own initiative (ex officio), (2) a notification obligation for concentrations, and (3) a notification obligation for the participation in public procurement procedures.
  • The possibility of opening ex-officio investigations will apply already from July 12, 2023 on.

  • On October 12, 2023, the notification obligation for concentrations will come into force. It will take effect if (i) at least one of the undertakings concerned (one of the merging undertakings, the target or the joint venture) is based in the EU and has achieved turnover in the EU of more than EUR 500 million and cumulatively (ii) the undertakings concerned (the merging undertakings, the target and the acquirer or the joint venture and its parent companies) have received subsidies from non-EU Member States amounting in total to more than EUR 50 million in the preceding three financial years.
  • The term subsidy is defined very broadly in the FSR and includes any form of direct or indirect contribution from non-EU governments or public or private entities attributable to a non-EU Member State (e.g. grants, fiscal incentives, loans, and contracts with public entities).
  • As a transitional provision, transactions for which the contractual obligation is entered into on or after July 12, 2023 (signing), but which are completed before October 12, 2023 (closing), are exempt from the notification obligation.
     
  • There is an obligation to suspend the implementation of a notified concentration. "Gun jumping" fines are provided for, based on worldwide turnover.
  • Finally, for public procurement procedures, the FSR introduces an additional approval procedure for participation. This approval procedure takes effect if (i) the value of a public procurement contract exceeds EUR 250 million and cumulatively (ii) the undertaking has received subsidies from non-EU Member States in excess of EUR 4 million in the preceding three financial years.

Our webinar on the FSR will take place on September 14, 2023. Please save the date.

 

 

Please do not hesitate to contact us in case of any questions.

Legal Note: The information contained in this Smart Insight newsletter is of general nature and does not constitute legal advice.

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CONTACTS

Marcel Meinhardt

Partner, Head of Competition, Zurich

marcel.meinhardt@lenzstaehelin.com

Tel: +41 58 450 80 00

Astrid Waser

Partner, Zurich

astrid.waser@lenzstaehelin.com

Tel: +41 58 450 80 00

Benoît Merkt

Managing Partner, Geneva

benoit.merkt@lenzstaehelin.com

Tel: +41 58 450 70 00

Sevan Antreasyan

Partner, Geneva

sevan.antreasyan@lenzstaehelin.com

Tel: +41 58 450 70 00