{"id":13228,"date":"2023-07-19T07:56:57","date_gmt":"2023-07-19T02:26:57","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=13228"},"modified":"2025-04-02T02:41:12","modified_gmt":"2025-04-01T21:11:12","slug":"what-is-the-european-unions-foreign-subsidies-regulation-fsr","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-the-european-unions-foreign-subsidies-regulation-fsr\/","title":{"rendered":"What is the European Union\u2019s  Foreign Subsidies Regulation (FSR)?"},"content":{"rendered":"<h2><strong>About Foreign Subsidies Regulation (FSR):<\/strong><\/h2>\n<p>&nbsp;<\/p>\n<ul>\n<li>The European Union\u2019s FSR <strong>entered into force on 12 January 2023.<\/strong><\/li>\n<li><strong>Aim<\/strong>: <strong>Combating distortions of competition on the EU<\/strong> internal market <strong>caused by foreign subsidies.\u00a0<\/strong><\/li>\n<li>It will <strong>allow EU to investigate financial contributions granted by non-EU governments to companies active in the EU<\/strong>, and <strong>prohibit the award of public contracts<\/strong> <strong>to a company<\/strong> that has <strong>unduly profited from foreign subsidies.<\/strong><\/li>\n<li>It <strong>imposes mandatory notification and approval requirements<\/strong> for acquisitions of significant EU businesses and large EU public tenders, and <strong>gives the European Commission (EC) extensive powers to launch ex officio investigations<\/strong>.\u00a0<\/li>\n<li>The <strong>EC is the sole enforcer of the FSR.<\/strong><\/li>\n<li>In cases where the <strong>European Commission finds that a foreign subsidy is distorting<\/strong> competition, <strong>it can<\/strong> <strong>impose various remedies, including<\/strong>\n<ul>\n<li><strong>fines of up to 10% of the company\u2019s annual aggregated turnover<\/strong>;<\/li>\n<li><strong>requiring the company to repay the foreign subsidy<\/strong> if competition distortion is confirmed;<\/li>\n<li><strong>banning the company from participating in public procurement<\/strong>;<\/li>\n<\/ul>\n<\/li>\n<li><strong>What Counts as Foreign Financial Contributions under the FSR?<\/strong>\n<ul>\n<li>FSR <strong>covers financial contribution from non-EU governments to firms operating in\/exporting to EU\u2019s market.<\/strong><\/li>\n<li>Such a contribution <strong>may be distortive where it confers a benefit not normally available on the market to a company in the EU<\/strong>, and that <strong>benefit is specific to one or more companies or industries<\/strong> as opposed to all companies or all companies active in a particular industry.<\/li>\n<li>The contributions <strong>include direct grant, low-interest loan, tax incentives on goods or services at below-market prices<\/strong>, <strong>and provision of land or buildings<\/strong> at below-market prices.<\/li>\n<li>FSR <strong>applies to transactions above a certain threshold<\/strong>. <strong>Companies must notify <\/strong>the European Commission <strong>if their transactions involving foreign subsidies exceed this threshold.<\/strong><\/li>\n<li><strong>For mergers and acquisitions, notification is mandatory if the combined value<\/strong> <strong>of the merging companies\u2019 assets exceeds \u20ac500 million<\/strong>, but not necessary if the value of foreign subsidies is less than \u20ac1 million.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1)\u00a0What is the European Commission (EC)?<\/h3>\n<p>European Commission (EC), an institution of the European Union (EU) and its constituent entities that makes up the organization\u2019s executive arm. The EC also has legislative functions, such as proposing new laws for the European Parliament, and judicial functions, such as finding legal solutions to business and trade issues between countries within the EU.<\/p>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.livemint.com\/economy\/eus-new-subsidy-rule-could-hit-india-s-pli-11689697121493.html\" target=\"_blank\" rel=\"nofollow noopener\"><u>EU\u2019s new subsidy rule could hit India\u2019s PLI<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>European Union\u2019s  Foreign Subsidies Regulation (FSR) entered into force on 12 January 2023.<\/p>\n","protected":false},"author":5,"featured_media":13229,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-13228","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=13228"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13228\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/13229"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=13228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=13228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=13228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}