Legislation and decisions

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.

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

• Review report 
• Staff working document supporting the review report 
• Press release
• Questions and answers
• 'Have your Say' publication
• FSR Review Study

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.

• Initial clarifications on distortion and balancing

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

• Political agreement
• Regulation (EU) 2022/2560
• Press release on the adoption of the Regulation
• Frequently asked questions

Decisions closing in-depth investigations under the FSR public procurement module

Under Chapter 4 of the FSR, the Commission may conclude an in-depth investigation into an ongoing public procurement procedure by adopting a formal decision.

If the Commission finds that an economic operator has received foreign subsidies that allowed it to submit an unduly advantageous tender, it will adopt a decision prohibiting the contracting authority from awarding the contract to that economic operator.

If the Commission finds that an economic operator has received such foreign subsidies, but the economic operator offers commitments that fully and effectively address the distortion caused by those subsidies, the Commission will take a decision making those commitments legally binding. In that case, the economic operator may continue to participate in the procurement procedure, provided it complies with its commitments.

If the Commission concludes that the economic operator has not benefited from foreign subsidies that enabled it to submit an unduly advantageous tender, it will adopt a decision closing the investigation without requiring the economic operator or the contracting authority to take any further action. The economic operator may then continue to participate in the procurement procedure.