On July 10, 2023, the European Commission formally adopted the implementing rules accompanying the Regulation on Foreign Subsidies from Non-EU Countries That May Distort the EU Market. The regulation aims to establish a prior notification system for companies receiving foreign subsidies from non-EU countries and an ex officio investigation system by the European Commission. Companies must notify relevant M&A transactions and public procurement projects in advance if they meet the notification criteria. For M&A transactions or public procurement projects that do not meet the notification criteria, the European Commission has the authority to initiate investigations on its own.

The Implementing Rules clarify the following aspects:

Requirements for submission of notifications and the time for formal acceptance of notifications.
The investigative powers of the European Commission.
The submission of restrictive commitments and the scope of transparency and reporting obligations.
The procedural rights of relevant operators in investigation procedures, including the right to submit written opinions on decisions by the European Commission and the right to access relevant documents.
The use and handling of confidential information obtained by the European Commission during investigations.
The calculation of time limits and the methods for transmitting and signing documents.

In addition, the Implementing Rules specifically highlight their focus on financial contributions deemed most likely to have distortive effects and significantly reduce the scope of information reporting in notifications.

The publication of the Implementing Rules means that companies need to comply with the new rules for notifications and operations, especially those involved in M&A transactions and public procurement. Companies must conduct a comprehensive assessment of their operations and external environment to prepare for possible reviews and investigations. If notification obligations are triggered, companies must prepare their notifications in advance to ensure all operations comply with the EUs new rules. At the same time, companies must also pay attention to confidential information that may be involved in the European Commissions investigations to protect their trade secrets and legal rights.

The Implementing Rules provide companies with more specific guidelines for notifications, helping them understand the EUs regulations and procedures for foreign subsidies. In this regard, companies should prepare in advance and adapt to the new rules to gain an advantage in the EU market.