Key Takeaways from EU Foreign Subsidies Regulation Webinar: Cutting-Edge Cases and Insights

On 13 March 2025, Bird & Bird's Competition and Public Procurement law experts hosted a webinar addressing the EU Foreign Subsidies Regulation (FSR), providing essential insights into its implications and practical guidance for businesses involved in larger M&A deals and public procurement procedures in the EU.  The recording of the webinar is available here until 12 March 2026. Below are the key takeaways from this 1-hour session and answers to some of the questions received during the webinar.

Understanding the FSR: The EU Foreign Subsidies Regulation is designed to curb distortions in the EU internal market caused by non-EU government subsidies. It mandates that companies disclose any foreign subsidies related to mergers or public procurement activities that meet specific criteria.

Compliance and Risks: Non-compliance with the FSR can result in severe consequences, including provisional measures, corrective actions, information requests, inspections, and penalties of up to 10% of a company’s turnover. We discussed strategies to identify potential risks and avoid common pitfalls. 

Impact on M&A Transactions: The regulation significantly affects mergers and acquisitions, requiring companies to be well-prepared and informed about recent cases and the evolving guidelines of the European Commission. We shared firsthand experiences and best practices to help navigate these complexities.

Public Procurement Implications: The FSR also impacts public tenders, with implications for both companies and contracting authorities. We explored the procedural and legal risks, offering insights into how businesses can effectively respond to these challenges.

Recent Cases and Insights: Our discussion included an examination of recent cases, providing valuable insights into the European Commission's operations and how companies are adapting to the FSR.

Advance preparation is crucial: The notification process involves detailed reporting of foreign financial contributions (FFCs) received over the past three years, which can be extensive and require significant data collection efforts. Due to the complexity and breadth of information required for notifications, and brief filing deadlines, it is important to be prepared ahead of time. Not providing all the information on time can lead to significant consequences, and even the potential cancelation of transactions or public procurement projects.

Q&A
We received various questions during the webinar, many posted anonymously. We couldn't provide answers to all of them due to lack of time. However, below we try to answer some of the queries and concerns received from the public:

• What is an FFC: FFC stands for ‘foreign financial contribution’. The term FFC is a broad concept, which is not exhaustively defined in the FSR. Typical examples include (i) transfer of funds (ii) foregoing of liabilities, and (iii) provision or purchase of goods or services.
   
• What is the difference between FFCs and Foreign Subsidiaries (FS)? A pre-requisite for a Foreign Subsidiary is that an FFC exists, but not all FFCs are necessarily an FS. The identification of an FS requires a complex assessment, but in essence, an FS is an FFC by a third country that confers an advantage and is limited to one or more companies/sectors of the economy.
   
• Which internal team do you typically see managing the FSR data collection process? (e.g., legal, investment teams, compliance, finance) In our experience, this varies widely. It may be any of the listed and also combinations like legal and M&A teams jointly.
   
• I’m not very clear on how one should compile the table for FFCs that do not fall within categories of Art. 5(1) (a)-(d). You should report FFCs that are at least EUR 1 million, but the instructions of the form FS CO say that you should include only those countries where the estimated aggregate amount of all FFCs granted in the preceding three years is EUR 45 million or more. So, what if I have several FFCs individually above EUR 1 million from the same third country, but overall they are below EUR 45 million – should I not report them? Yes, if the individual FFCs exceeding EUR 1 million do not reach EUR 45 million in aggregate from the same third country, those should not be reported, provided that they are not most likely to distort the internal market.
   
• I was asking my previous question re FFCs in relation to the internal exercise we are conducting to build our monitoring tool. Asking the EC for guidance, without any M&A or public tender soon to be filed under FSR rules, seems risky, as it can put a company under the spotlight or give ideas to the EC about FFCs they had not thought about ... Have you reached out to the EC for guidance in the context of a filing or outside? Can we ask for guidance from the EC anonymously? Yes, informal consultation can be initiated anonymously with the EC just for the purpose of internal monitoring. 
   
• Could you please provide this EC email address for consultation purposes? Questions related to concentrations may be sent to DG COMP’s Foreign Subsidies Registry email address: [email protected]. Questions related to public procurement may be sent to DG GROW’s email address: [email protected]. 
   
• Do you have any recommendations of vendors who could help with creating a (user-friendly) monitoring tool? When it comes to developing user-friendly monitoring tools, we recommend considering firms with a proven track record in this area. Bird & Bird has extensive experience in creating tailored solutions that meet the specific needs of businesses across various sectors. Our team combines legal expertise with technological innovation to deliver effective monitoring tools. Feel free to contact us (see links below). We would be delighted to discuss how we can assist in developing a solution that aligns with your requirements. 

This webinar aimed to equip in-house lawyers, M&A specialists, and public procurement professionals with the tools needed to navigate the EU Foreign Subsidies Regulation effectively. We look forward to continuing this dialogue and supporting businesses in adapting to this crucial regulatory framework.

Please reach out to the speakers Morten Nissen, Janneke Kohlen, Daniel Aranyi, Tialda Beetstra or Gabor Kutai if you have any questions or need further guidance regarding the EU Foreign Subsidies Regulation.

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