The European Commission has finished its first review of the Foreign Subsidies Regulation (FSR) and said the regulation is fit for purpose in addressing market distortions caused by foreign subsidies in the EU.
The review covered three years of enforcement and looked at the FSR’s processes for examining concentrations and foreign financial contributions in public procurement, alongside the commission’s ex officio powers to open investigations on its own initiative.
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According to the commission, these tools are operating effectively and enable it to identify and address potentially distortive foreign subsidies before mergers are completed or high-value public contracts are awarded.
European Commission Clean, Just and Competitive Transition Executive Vice-President Teresa Ribera said: “The first three years of implementation confirm that the FSR is delivering on its objectives. It helps protect the integrity of the internal market and ensures that Europe’s competitiveness and economic security are not undermined by distortive foreign subsidies.”
The assessment was based on 103 contributions gathered through two targeted consultations, as well as an independent study carried out by an external party.
The commission said most stakeholders considered the framework broadly fit for purpose.
In concentration cases, respondents highlighted the value of prenotification engagements and supported the current reporting exemptions and waivers for some information requirements.
For public procurement, the commission said it reviewed more than 5,000 submissions, adding that this allowed authorities to obtain essential goods and services without delay, while formal prenotifications remained limited.
On ex officio cases, the review referred to recently opened in-depth investigations into threat detection systems and the wind sector as providing additional insight into the Commission’s assessment methods.
The review also identified a number of concerns.
These included the administrative burden linked to collecting and reporting data on foreign financial contributions (FFCs), long and complex investigation procedures, uncertainty over call-in powers for below-threshold concentrations, and the need for clearer reporting obligations and greater transparency in enforcement.
In response, the commission said it would seek targeted adjustments to the FSR’s procedural framework.
For the concentration chapter, possible amendments include increasing the turnover notification threshold through a delegated act and adding simplified notification options for certain cases or FFCs.
They also include moderately raising FFC reporting thresholds and removing reporting requirements for FFCs considered unlikely to distort the internal market.
In public procurement, the changes under consideration include simpler notification and declaration forms, revisions to the waiver framework, limits on reporting lower-risk FFCs, and clearer rules on confidential information in file access.
Draft adjustments are due in autumn 2026, when a stakeholder comment period is set to begin, with adoption planned for 2027.
Under the FSR, the commission must review implementation every three years and report its findings to the European Parliament and the Council.
