EU to expand investigations into illegal subsidies to foreign companies

The European Union (EU) will conduct additional investigations as part of a probe into illegal subsidies granted to foreign companies investing in enterprises within the bloc.

The remarks were made by European Commission Vice President Teresa Ribera, who is responsible for competition matters, Caliber.Az reports, citing the Financial Times. 

According to Ribera, the EU intends to increase scrutiny of such foreign companies as part of efforts to combat what Brussels views as unfair competition.

The greatest attention will be focused on sectors experiencing growing foreign investment interest, which also attract overseas companies. Ribera specifically mentioned “basic industries and advanced sectors, the chemical industry, pharmaceuticals, automotive, and battery manufacturing.”

Although the EU’s Foreign Subsidies Regulation (FSR), which came into force in 2023, is not aimed specifically at China, it “has been used to apply pressure on many Chinese companies amid growing concerns that excess supply from the world’s largest manufacturer threatens European industry,” the report said.

Under the FSR, the European Commission investigates and takes action against “distorting subsidies provided by non-EU countries to companies operating within the bloc” to ensure a level playing field in the EU’s internal market.

The goal of the foreign subsidies regulation, Ribera explained, is to ensure that companies investing in the EU create added value and contribute to the development of talent and innovation within the bloc. She also noted that Beijing has previously required European companies investing in China to form joint ventures and implement technologies in the local market.

By Khagan Isayev