AEGIS Europe contribution to public consultation on the FSR Guidelines
/AEGIS Europe contribution to public consultation on the FSR Guidelines
AEGIS Europe welcomes the opportunity to submit its input to the European Commission on the upcoming Guidelines requested by 13 January 2026 as per Article 46 of the Foreign Subsidies Regulation (FSR). y
First of all, AEGIS Europe would like to reaffirm that the Foreign Subsidies Regulation represents an important trade autonomous tool to protect the European Industry’s competitiveness and guarantee a level playing field on the Single Market, be it for public procurement or concentrations.
Regarding articles 4 and 5 of the FSR on the identification of subsidies most likely to distort the internal market, AEGIS Europe believes that a number of foreign subsidies should be considered to have a distortive effect on a per se basis, notably all subsidies to beneficiaries active in sectors:
Characterised by structural excess capacity.
Featuring high-tech and/or dual-use products to a significant extent; or,
Designated as strategic by the government providing the subsidies (e.g. in policies such as Made in China 2025).
Also to be considered distortive per se should be foreign subsidies to operators which have privileged and/or protected access to a significant non-EU market, especially if the non-EU market is the operator’s domestic market. The ability of non-EU companies to accept unfavourable or unconventional contract conditions should also be deemed as an indicator of such companies receiving a subsidy. Finally, these indicators should be assessed collectively rather than separately.
Regarding the balancing test, AEGIS Europe insists that a balancing assessment must start from the presumption that there is a fundamental and strong EU interest in favour of removing the effects of distortive foreign subsidies, especially those endangering sustainable and diversified supply chains and the preservation of a strong industrial base in Europe. In addition, because a balancing assessment must involve an adequately transparent and coherent analysis of both short-term and medium-term impacts of the distortions in question, the Commission should carry out full and timely consultation of relevant EU industries and give meaningful consideration of their input.
When considering commitments and redressive measures, we believe that the repayment of the foreign subsidy is normally not to be considered an adequate redressive measure. Furthermore, there should be limits on the commitments that the Commission may accept in lieu of redressive measures, especially in cases of less than full cooperation. In particular, the Commission should not be allowed to accept commitments in cases of significant or full non cooperation.
In public procurement procedures, it is worth highlighting a few relevant points. In recent years, there has been an increasing influx of bidders from economic operators from third countries. If we consider that EU funds (e.g. European Structural and Investment Funds, Connecting Europe Facility) can be involved and de facto awarded to economic operators, distorting competition based on price, this is even more relevant as it can contribute to a decreased competitiveness of EU companies. This situation has been documented notably by the OECD in its publications on measuring distortions in international markets (e.g. rolling stock value chain, aluminium, semi-conductors). This situation can lead to a loss of market share and deindustrialisation of the EU, as well as having negative effects on competition in the Single Market.
Coupled with increasing contractual requirements and award criteria focused mostly if not exclusively on price, European companies could be discouraged to submit bids due to low chances of winning – which would be detrimental to the quality of the solutions supplied to public authorities. The threshold of EUR 250 million for public procurement is high and fails to capture many important projects, for example in the construction or rail supply industries. Hence the power of the Commission to request the notification of foreign financial contributions in a public procurement procedure below the notification thresholds is key given the easy circumvention of the instrument by foreign economic operators. In any case the ex officio mechanism should be efficiently utilised, especially if the threshold remains unchanged.
When an economic operator has been targeted by a public procurement investigation and if either the investigation is not terminated or results in determination that the company at stake has received distortive foreign financial contributions, there must be an automatic investigation if this company participates in other tenders – be it above OR below the threshold.
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AEGIS Europe is an industry alliance that brings together more than 30 European manufacturing associations representative of the whole value chain, from commodities down to consumer end products. Our Members account for more than €500 billion in annual turnover, as well as for millions of jobs across the EU.