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“There is a threat of substantial bureaucracy and legal uncertainty”


05 May 2021


Trade & Society
EU proposal on subsidies from third countries

Brussels/Frankfurt, 5 May 2021 - The EU-Commission wants to take tougher action with a Regulation against subsidies that distort competition on the Internal Market. Ulrich Ackermann, Managing Director of VDMA's Foreign Trade Department, says:


“In principle, it is right that the EU-Commission is taking action now against subsidised products and other subsidised economic activities of third countries in the EU's Internal Market. We have been calling for this for a long time. Because such subsidies also distort production costs in the machinery sector and have negative effects on competition in Europe. However, the EU-Commission's proposal for a Regulation on foreign subsidies that distort the Internal Market, which was presented today, does not meet our expectations. The proposed Regulation is very complex and there is a risk that its implementation will lead to considerable additional bureaucracy and legal uncertainty for our member companies.


For example, for concentrations and public procurement over certain thresholds, the proposal provides for a system of ex-ante notification of subsidies to the EU-Commission. In all other market situations as well as smaller concentrations and public procurement procedures, the Commission can start an ex-officio investigation and may request ad-hoc notifications. Each of these procedures has different thresholds and rules. We see this very critically. Companies can also be fined if, for example, they do not comply with requests for information from the EU-Commission. But companies should not be forced to share confidential information.”