The foreign subsidies regulation (FSR) establishes substantive and procedural rules to address distortive foreign subsidies in the EU internal market.
The FSR entered into force on 12 January 2023 and has applied since 12 July 2023, allowing the European Commission to initiate ex officio investigations. From 12 October 2023, notification obligations for concentrations (mergers and acquisitions) and public procurement above certain thresholds have been in effect.
Legislation
Foreign subsidies regulation (EU) 2022/2560
The legal framework addressing distortions caused by foreign subsidies in the EU single market.
Implementing regulation (EU) 2023/1441
Sets out the procedural rules for implementing the foreign subsidies regulation, including notification procedures and annexes.
Communication on transmitting documents to the Commission
Explains how documents should be submitted electronically under the Implementing Regulation.
2026 review of the foreign subsidies regulation
On 14 July 2026, the Commission published the first review report and staff working document on the enforcement and implementation of the foreign subsidies regulation.
The foreign subsidies regulation requires the Commission to review the way in which the regulation is applied every 3 years. The results of the review and recent developments regarding third countries’ subsidy control systems must be reported to the European Parliament and the Council.
Where appropriate, the Commission may accompany the review report with legislative proposals.
The first review, published in 2026, found that maintaining a level playing field in the internal market remains a relevant objective. At the same time, it identified targeted changes to simplify procedures and reduce the administrative burden and simplify reporting rules for businesses.
The review includes
Foreign subsidies regulation guidelines (FSR guidelines)
On 9 January 2026, the Commission adopted guidelines under the foreign subsidies regulation. The guidelines bring further predictability and ensure transparency for companies. They clarify several aspects of the FSR
- the assessment of distortions (article 4(1) FSR)
- the assessment of distortions specifically in public procurement procedures (article 27 FSR)
- the balancing test (article 6 FSR)
- the use of call-in mechanism for concentrations and public procurement procedures (articles 21(5) and 29(8) FSR)
If an in-depth investigation finds that a foreign subsidy exists and is distortive, the Commission will balance the negative effects of market distortion against any positive effects of the subsidy. Based on this assessment, the Commission may impose redressive measures or accept commitments from the parties involved.
Legislative history of the foreign subsidy rules
- White paper on foreign subsidies (COM(2020) 253)
- Public consultation (2020)
Preparing the legislation
- Proposal for a regulation COM(2021) 223 final
- Impact assessment report SWD(2021) 99 final
- Executive summary SWD(2021) 100 final
Adoption of the regulation
Background documents
- Replies to public consultation on draft FSR guidelines (2025)
- Stakeholder feedback on FSR draft implementing regulation (2023)
- Feedback from targeted consultation (2021)
- Summary of consultation results (2020 white paper)
- Contributions to the public consultation (2020 white paper)
- Documents annexed to contributions (2020 white paper)
- Feedback from inception impact assessment (2020)
