Today, the Commission is launching its first in-depth investigation into the potentially market distortive role of foreign subsidies, exercising its powers under the Foreign Subsidies Regulation.
This investigation relates to a public procurement procedure. It shows the Commission's determination to preserve the internal market's integrity by ensuring that recipients of foreign subsidies cannot benefit from an unfair advantage to win public contracts in the EU, to the detriment of fair competition.
The investigation launched today follows a notification submitted to the Commission by
According to the Foreign Subsidies Regulation, companies are obliged to notify their public procurement tenders in the EU when the estimated value of the contract exceeds
Following its preliminary review of the notification received from CRRC Qingdao Sifang Locomotive, the Commission considered it justified to open an in-depth investigation, since there are sufficient indications that this company has been granted a foreign subsidy that distorts the internal market. For this, the Commission had to assess whether the foreign financial contribution constitutes a subsidy that directly or indirectly confers a selective benefit to the company; and whether this allows the company to submit an unduly advantageous tender.
During the in-depth investigation, the Commission will further assess the alleged foreign subsidies and obtain all the information required to establish whether they may have allowed CRRC Qingdao Sifang Locomotive to submit an unduly advantageous offer in reply to a tender. Such an offer could cause other companies participating in the public procurement procedure to potentially lose sales opportunities.
In line with the provisions of the Foreign Subsidies Regulation, at the end of its in-depth investigation the Commission may (i) accept commitments proposed by the company if they fully and effectively remedy the distortion, (ii) prohibit the award of the contract, or (iii) issue a no-objection decision.
CRRC Qingdao Sifang Locomotive submitted a complete notification on
Companies and products
Procedural background
The Foreign Subsidies Regulation ('FSR') started to apply on
In recent years, foreign subsidies appear to have distorted the EU's internal market, including by providing their recipients with an unfair advantage to acquire companies or obtain public procurement contracts in the EU to the detriment of fair competition. The FSR addresses such distortions and closes a regulatory gap. It gives the EU new tools to effectively tackle foreign subsidies that cause distortions and undermine the level playing field in the internal market which is based on a competitive social market economy.
The FSR introduces three procedures:
Two notification-based procedures to (i) investigate concentrations as well as (ii) bids in public procurement procedures involving financial contributions granted by non-EU governments. The notification obligations apply to economic operators since
An ex officio procedure to investigate all other market situations, where the Commission can start a review on its own initiative.
The Commission will publish a non-confidential version of today's decision, as well as the future final decision, after adoption, in the
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