On 14 July 2026, the European Commission published its first review report on the implementation and enforcement of the Foreign Subsidies Regulation (FSR), covering the period from 13 July 2023 to mid-2026. The report assesses the effectiveness of the FSR in addressing distortions caused by third-country subsidies in the EU internal market, applying to all sectors and economic activities.
The FSR targets foreign financial contributions (FFCs) from third countries that confer a benefit and are limited to specific undertakings or industries. Ex officio investigations could start from 13 July 2023, while notification obligations for concentrations and public procurement applied from 13 October 2023. Member State assistance rules for inspections entered into force on 13 January 2024. The Commission adopted FSR Guidelines on 9 January 2026 detailing distortion assessment (Articles 4-5) and the balancing test (Article 6) for positive effects. The Implementing Regulation (FSIR) entered into force on 13 July 2023, setting notification forms (FS-CO for concentrations, FS-PP for public procurement) and procedural rules.
The report covers the application of key articles (4, 5, 6, 9) and thresholds (Articles 20(3), 28(1)-(2) FSR), as well as developments in third countries' subsidy control systems. DG COMP and DG GROW share implementation responsibilities, and the FSR complements existing EU merger, antitrust, State aid, public procurement, and trade rules.
Policy orientations and trade-offs The FSR introduces a new layer of scrutiny for foreign subsidies, aiming to level the playing field for EU companies. It imposes notification obligations on companies receiving significant FFCs, which can increase administrative burden and compliance costs. The balancing test allows the Commission to weigh positive effects of a subsidy against its distortive impact, providing flexibility but also uncertainty for businesses.
Impact on stakeholders - EU companies: Benefit from reduced competitive pressure from subsidised foreign rivals, but face new compliance costs and potential delays in transactions and public procurement bids. - Third-country investors and exporters: Subject to notification and investigation, potentially deterring investment or trade if subsidies are deemed distortive. - EU consumers: May see higher prices if competition is reduced, but also benefit from a fairer market and potentially higher quality or innovation. - EU regulatory bodies (DG COMP, DG GROW): Increased workload and need for expertise in assessing foreign subsidies, but gain a powerful tool to enforce fair competition.
Institutional follow-up The Commission will continue using all investigative tools under the FSR to ensure a level playing field, while remaining open to multilateral solutions within the WTO framework. The report may inform future adjustments to the regulation or its implementation.