Questions and Answers

Tenderers or candidates will be subject to a notification or declaration obligation only on or after 12 October 2023. Accordingly, for public procurement procedures initiated between 12 July and 12 October 2023 and with a submission deadline as of 12 October 2023 – which will be subject to Regulation (EU) 2022/2560 – an obligation to submit a notification or a declaration shall be enforceable only as of 12 October 2023.

To ensure equal treatment, if in the same public procurement procedure offers are submitted both before and as of 12 October 2023, the relevant contracting authority or entity may request the economic operators that have submitted their offer before the 12 October 2023 to submit a missing notification or declaration. In such cases, it also means that the content of the notification received will be examined by the Commission without undue delay and, if found incomplete, the economic operator will be requested to complete its content even if their tender was submitted before 12 October 2023.

Undertakings are encouraged to engage in pre-notification contacts in the context of published public procurement to facilitate the submission of notifications.

The threshold of EUR 1 million set out in the Form FS-PP refers to an individual financial contribution granted by a single third country to each of the notifying parties. Therefore, to determine whether the EUR 1 million threshold is reached, foreign financial contributions granted to different notifying parties are not to be aggregated. Foreign financial contributions granted by different third countries to the same party are not to be aggregated either.

The Commission may, based on a case-by-case assessment, require additional information on financial contributions below that threshold (i.e. EUR 1 million as an individual financial contribution granted by a single third country) at any stage of the assessment.

The relevant moment in time to determine which financial contributions are relevant for a given notification is the date on which the financial contribution is granted, not the date on which it is received. The financial contribution should be considered granted from the moment the beneficiary obtains a legal entitlement to receive it. The relevant event is thus not the actual disbursement of the funds.

Example 1: in the case of a grant, the relevant moment in time to consider the financial contribution as granted should normally be the date of the granting act, and therefore the entire amount of the grant should be allocated to that moment, regardless of when it is actually disbursed to the beneficiary.

Example 2: in the case of a loan, the relevant moment in time to consider the financial contribution as granted is in principle determined by the signing of the loan agreement which entitles the borrower to receive the funds. In such a case, the entire amount of the loan should be granted to that moment, even if it is payable in several instalments. More generally, the relevant moment in time will depend on the conditions set out in the loan agreement. For example, for credit lines (or revolving loans) the relevant moment in time is in principle determined by the moment of signing the agreement if, according to the terms of the agreement, the beneficiary is entitled at signing to receive the liquidity envisaged under it (i.e., there are no further conditions that need to be met), the agreement includes all the relevant details (such as interest rates), the provision of the liquidity does not require additional steps from the lender, and the agreement does not provide for the possibility for the lender to deny a drawdown or change the conditions for a drawdown provided under the credit line.

Example 3: in the case of a contract for the purchase or sale of a good or service, the relevant moment in time is in principle the date on which the contract is signed, and thus the entire amount of the financial contribution should be considered as granted at that moment. However, in contracts where the exact amount to be purchased or sold (and thus the price to be paid) is not determined in the agreement, but changes over time (for example, a regular supply of a service over several years), each portion of the financial contribution should be considered as granted at the moment on which it is finally determined. In contracts where the third country purchases a good or a service, and where the right of the provider of the good/service to receive the different instalments of the remuneration is subject to conditions or to the actual delivery of the goods/services, the relevant moment in time to consider the financial contributions granted to the provider of the goods or services is the date when it is entitled to receive the remuneration (either because the goods/services are delivered or because the conditions are met).

Example 4: in the case of foreign financial contributions in the form of tax reductions, the relevant moment in time would in principle be the date when the final tax liability is determined,

so that the beneficiary is entitled to pay a lower amount of tax than what would otherwise be due.

A financial contribution provided by a private entity may be attributed to a third country when, for example, the private entity is directed or entrusted by the third country to undertake a certain action.

If an undertaking sells its products or services to a third country (including sales to public authorities as well as to public or private entities whose actions can be attributed to the third country), the sales income constitutes a “foreign financial contribution” within the meaning of Article 3(2) of Regulation (EU) 2022/2560, which counts for determining whether the notification threshold in the context of public procurement procedures set out in Article 28 of Regulation (EU) 2022/2560 is met, regardless of whether the conditions of the sale are in line with normal market conditions.

However, as indicated in the Form FS-PP published as Annex II to the Commission Implementing Regulation (point 6(c) of the Table), information on the provision/purchase of goods/services (except financial services) at market terms in the ordinary course of business do not need to be reported in the notification, unless they fall into any of the categories of Article 5 of Regulation (EU) 2022/2560.

However, the Commission may, based on a case-by-case assessment, require additional information on those transactions at any stage of the assessment.

A financial contribution that has been provided – directly or indirectly – by a third country constitutes a “foreign subsidy” within the meaning of Article 3(1) of Regulation (EU) 2022/2560 if the financial contribution in question confers a benefit on one or more undertakings engaging in an economic activity in the internal market; and if such benefit is limited, in law or in fact, to one or more undertakings or industries. In this sense, the sale of goods or services at market prices is not considered a foreign subsidy, as there is no “benefit” attached to it. This would be the case, for instance, of the provision of goods or services following a genuinely competitive, transparent and non-discriminatory tender procedure, which are presumed to be in line with normal market conditions.

Exemptions granted by third countries from ordinary tax regimes constitute “foreign financial contributions” and should be counted for determining whether the notification thresholds in the context of public procurement procedures set out in Article 28 of Regulation (EU) 2022/2560 are met.

However, as indicated in the Form FS-PP published as Annex II to the Commission Implementing Regulation, the following tax measures do not need to be reported in the notification, unless they fall into any of the categories of [foreign subsidies most likely to distort the internal market, which are listed in] Article 5 of Regulation (EU) 2022/2560: (i) deferrals of payment of taxes, tax amnesties and tax holidays as well as normal depreciation and loss-carry forward rules that are of general application, and (ii) application of tax reliefs for avoidance of double taxation in line with the provisions of bilateral or multilateral agreements for avoidance of double taxation, as well as unilateral tax reliefs for avoidance of double taxation applied under national tax legislation to the extent they follow the same logic and conditions as the provisions of bilateral or multilateral agreements. The Commission may, based on a case-by-case assessment, require additional information on those transactions at any stage of the assessment.

If foreign financial contributions are granted specifically to one or more undertakings engaging in an economic activity in the internal market; and if such benefit is limited, in law or in fact, to one or more undertakings or industries, then it will constitute a “foreign subsidy” within the meaning of Article 3(1) Regulation (EU) 2022/2560.

Whether that foreign subsidy is liable to distort the internal market falls to be assessed in accordance with Articles 4 to 6 of Regulation (EU) 2022/2560.

Subsidies falling within the scope of the WTO Agreement on Subsidies and Countervailing Measures cannot be redressed under Regulation (EU) 2022/2560.

However, to the extent that those subsidies constitute foreign financial contributions within the meaning of Article 3(2) of Regulation (EU) 2022/2560, they nevertheless need to be taken into account for determining whether the notification thresholds in the context of public procurement procedures set out in Article 28 of Regulation (EU) 2022/2560 are met.

All foreign financial contributions granted by countries that are not EU Member States (thus including those granted by EEA EFTA countries) count for determining whether the notification thresholds in the context of public procurement procedures set out in Article 28 of Regulation (EU) 2022/2560 are met.

Therefore, notifying parties are in principle obliged to report these financial contributions in their notification, subject to the reporting thresholds and exceptions set out in the Form FS-PP published as Annex II to the Commission Implementing Regulation. However, during pre-notification discussions, the Commission may dispense the notifying parties, upon request, with the obligation to provide certain information which is not necessary for the examination of the case. For more information on how waivers may be granted, please see the recitals 13-15 of the Introduction to the Form FS-PP published as Annex II to the Commission Implementing Regulation.

Direct financial contributions from international organisations such as the World Bank are not attributable to a third country, and therefore should not be considered foreign financial contributions.

If an undertaking provides its products or services to a third country, the income generated from these sales constitutes a ‘foreign financial contribution’ within the meaning of Article 3(2) of Regulation (EU) 2022/2560, which counts for determining whether the notification threshold concerning foreign financial contributions set out in Article 28 of Regulation (EU) 2022/2560 is met. This also applies to contracts in the national security or defence field, or in any other field, even if those were subject to confidentiality obligations under the laws of that third country.

Whether any information in any of those sales contracts in the national security and defence field or which could be subject to confidentiality obligations must be reported under the notification for public procurement is clarified in the Form FS-PP published as Annex II to the Commission Implementing Regulation.

In particular, according to the Form FS-PP, detailed information on such sales contracts would need to be included by the notifying parties in the notification only if the provision of goods or services under those contracts falls into any of the categories listed in Article 5(1), points (a) to (c) and (e) of Regulation (EU) 2022/2560 (most likely to distort the internal market).

If the provision of goods or services under those contracts does not fall into any of the categories listed in Article 5(1), those agreements in principle do not need to be reported if the provision of products takes place at market terms (for example, if the provision of goods is carried out following a competitive, transparent and non-discriminatory tender procedure). In all other cases, only an overview of those contracts – together with all other financial contributions of the same type – should be included in the Table in reply to Section 3.3 of the Form FS-PP.

In any case, for those situations in which the provision of goods or services under those contracts needs to be included in the notification form, the Commission may during the pre-notification contacts dispense the notifying parties, upon reasoned request, with the obligation to provide certain information on those financial contributions, taking into account the circumstances of the case, such as other financial contributions granted to the notifying parties, and the scope of application and obligations imposed by the laws of the third country in question.

The threshold calculation is the responsibility of the relevant contracting authority or entity, as in any other public procurement procedure. For the calculation of the threshold of EUR 250

million, the EU rules on public procurement on the calculation of the estimated value of a procurement apply, namely Article 8 of Directive 2014/23/EU, Article 5 of Directive 2014/24/EU and Article 16 of Directive 2014/25/EU. These rules apply to public procurements, framework agreements as a whole or a specific procurement under the dynamic purchasing system, always net of VAT.

The contracting authority or entity must communicate, in the contract notice or in the procurement documents, that the notification threshold in Art. 28(1) lit. a) of Regulation (EU) 2022/2560 applies. However, even when the contracting authority or entity fails to communicate this fact, the procedure at hand will be subject to Chapter 4 of Regulation 2022/2560, empowering the Commission to require notifications or declarations to be submitted.

If the estimated value of the procurement is less than EUR 250 million, there is no obligation to send either a notification or a declaration.

The obligation to send a notification applies if, in addition to the threshold of EUR 250 million, the aggregate amount of foreign financial contributions granted in the three years prior to the notification was equal to or above EUR 4 million per third country.

The obligation to send a declaration applies if the threshold of EUR 250 million per procedure is reached or surpassed, but the aggregate amount of foreign financial contributions granted in the three years prior to the notification was less than EUR 4 million per third country.

Where a procurement (with an estimated value equal or above the threshold of EUR 250 million) is divided into lots, the notification obligation depends on the overall value of the lots applied for, and on the total amount of foreign financial contributions granted over the preceding three years. The notification obligation then exists where the value of the lot (or the aggregate value of all lots) that an economic operator applies for is equal or above EUR 125 million. This is in addition to the general requirement that the aggregate amount of foreign financial contributions granted in the three years prior to the notification was above EUR 4 million per third country.

Example 1: If the overall value of a procurement is EUR 200 million, and at least one of the economic operators (including its subsidiary companies without commercial autonomy and/or its holding companies) or any of the main subcontractors or main suppliers was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country, then there is no notification obligation nor declaration obligation.

Example 2: If the overall value of a procurement is EUR 300 million, but none of the economic operators (including its subsidiary companies without commercial autonomy and/or its holding companies) or any of the main subcontractors or main suppliers was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country, then there is no notification obligation. However, there is the need to submit a declaration in line with Article 29(1).

Example 3: If the overall value of a procurement is EUR 300 million, and at least one of the economic operators (including its subsidiary companies without commercial autonomy and/or its holding companies) or any of the main subcontractors or main suppliers was granted aggregate financial contributions in the three years prior to notification or, if applicable, the

updated notification, equal to or greater than EUR 4 million per third country, then there is the obligation to notify and no need to submit a declaration in line with Article 29(1).

Example 4: If the overall value of a procurement is EUR 300 million, and at least one of the economic operators (including its subsidiary companies without commercial autonomy and/or its holding companies) or any of the main subcontractors or main suppliers was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country and the procurement is divided into six lots of EUR 50 million each, the notification obligation applies to an economic operator that applies for three lots (for a total of EUR 150 million).

Example 5: If the overall value of a procurement is EUR 300 million, the procurement is divided into six lots of EUR 50 million each, and at least one of the economic operators (including its subsidiary companies without commercial autonomy and/or its holding companies) or any of the main subcontractors or main suppliers was granted aggregate financial contributions in the three years prior to notification or, if applicable, the updated notification, equal to or greater than EUR 4 million per third country and the maximum number of lots that can be awarded to one economic operator is limited to two (for a total of EUR 100 million), the notification obligation would not apply, i.e. the procedure would not be subject to Chapter 4 of Regulation (EU) 2022/2560.

Pre-notification by notifying parties should take place in sufficient time prior to the notification, preferably on the basis of a draft Form FS-PP, with a view to preparing the preliminary review of foreign subsidies in the context of a published public procurement procedure.

Notifying parties are asked to submit a Case Team Allocation Request to DG GROW’s Foreign Subsidies Registry functional email address for public procurement, GROW-FSR-PP-NOTIFICATIONSec [dot] europa [dot] eu (GROW-FSR-PP-NOTIFICATIONS[at]ec[dot]europa[dot]eu). A template of the Case Team Allocation Request will be published on DG GROW’s website. Shortly after the submission of this request, the notifying parties will be informed of the case team that will be dealing with their case. Notifying parties will then be able to contact the case team directly to start pre-notification contacts. For any question on the pre-notification in concentrations, please refer to DG COMP’s Foreign Subsidies Registry functional email address, comp-fsr-registryec [dot] europa [dot] eu (comp-fsr-registry[at]ec[dot]europa[dot]eu).

Any information on possible foreign subsidies that may cause a distortion on the EU internal market in the area of public procurement can be submitted to DG GROW’s Foreign Subsidies Registry functional email address for public procurement, GROW-FSR-PP-NOTIFICATIONSec [dot] europa [dot] eu (GROW-FSR-PP-NOTIFICATIONS[at]ec[dot]europa[dot]eu). Any information on possible foreign subsidies outside the area of public procurement can be sent to DG COMP’s Foreign Subsidies Registry functional email address, comp-fsr-registryec [dot] europa [dot] eu (comp-fsr-registry[at]ec[dot]europa[dot]eu).

The Form FS-PP published as Annex II to the Commission Implementing Regulation contains, in recitals 13-15 of its Introduction, instructions as to the procedure for the request of waivers. In general, all issues concerning the information to be included in the notification, including any possible waiver requests, will need to be addressed to, and discussed with, the case team appointed to the public procurement procedure in question during the pre-notification contacts following the submission of the Case Team Allocation Request.

For questions on the application of Regulation (EU) 2022/2560 in the context of public procurement procedures, emails can be sent to DG GROW’s functional email address, GROW-FSR-PP-NOTIFICATIONSec [dot] europa [dot] eu (GROW-FSR-PP-NOTIFICATIONS[at]ec[dot]europa[dot]eu). For any information on the application of Regulation (EU) 2022/2560 outside the area of public procurement, including on the notification thresholds for concentrations, emails can be sent to DG COMP’s Foreign Subsidies Registry functional email address, comp-fsr-registryec [dot] europa [dot] eu (comp-fsr-registry[at]ec[dot]europa[dot]eu).