The far-reaching EU Foreign Subsidies Regulation came into force on 12 January 2023. On 12 July 2023, this new regime will begin to apply. On 12 October 2023, the new notification obligations for M&A deals and public tenders will become effective.
The Regulation empowers the European Commission to remedy distortions caused by subsidies given by third-countries, i.e., non-EU Member States (for example, China). Aid granted by EU Member States is already scrutinised closely under the EU State aid rules.
The Regulation is drafted broadly and much of the detail remains unclear whilst we await – hopefully – more clarity from the EC’s implementing regulation, a draft of which is expected soon. There are several important preparatory steps that potential dealmakers should already consider ahead of that.