IOGP Europe’s response to the call for evidence on Foreign Subsidies Regulation (FSR)

Reflecting on the experience already gathered from implementing the FSR, we would like to draw attention to some important elements that the Commission should reconsider, reviewing some of the design elements of the FSR in order to ensure that the objectives of addressing distortive foreign subsidies are pursued in a manner that is proportionate, consistent and effective.

We invite the Commission to take into account the following recommendations:

• Eliminating the general notification-based system for mergers, simplifying it or at least significantly raising the thresholds.
• Aligning the reporting perimeter for Foreign Financial Contributions (FFCs) with accounting standards.
• Narrowing the reporting obligation to measures that qualify as subsidies and may have a distortive effect.
• Extending exemptions to cover all measures granted at market conditions and clarifying that sector-wide measures of general application should not be considered selective subsidies.
• Considering whether the objectives pursued by the FSR could be more effectively achieved through existing frameworks such as Foreign Direct Investment (FDI) screening, thereby avoiding duplication and unnecessary burdens

This response covers the following points:

1. Appropriateness of the FSR as a regulatory tool
2. Is a notification system for mergers really necessary?
3. Scope of reporting obligations
4. Concept of FFC
5. Scope of exemptions

IOGP Europe stands ready to continue engaging on this topic and to provide further input and expertise as needed.