A strong, open and competitive internal market enables both European and foreign undertakings to compete on merits. The Union benefits from a sophisticated and effective system of State aid control, aiming at ensuring fair conditions for all undertakings engaging in an economic activity in the internal market. This State aid control system prevents Member States from granting State aid that unduly distorts competition in the internal market.
(2)
At the same time, both private undertakings and public undertakings which are directly or indirectly controlled or owned by a state, might receive subsidies from third countries, which are then used, for instance, to finance economic activities in the internal market in any sector of the economy, such as participation in public procurement procedures, or the acquisition of undertakings, including those with strategic assets such as critical infrastructure and innovative technologies. Such foreign subsidies are currently not subject to Union State aid rules.
(3)
This Regulation covers all economic sectors, including those that are of strategic interest to the Union and critical infrastructures, such as those mentioned in Article 4(1), point (a), of Regulation (EU) 2019/452 of the European Parliament and of the Council (3).
(4)
Foreign subsidies can distort the internal market and undermine the level playing field for various economic activities in the Union. This could in particular occur in the context of concentrations entailing a change of control over Union undertakings, where such concentrations are fully or partially financed through foreign subsidies, or where economic operators benefiting from foreign subsidies are awarded contracts in the Union.
(5)
No existing Union instruments address distortions caused by foreign subsidies. Trade defence instruments enable the Commission to act when subsidised goods are imported into the Union, but not when foreign subsidies take the form of subsidised investments, or when services and financial flows are concerned. Under the WTO Agreement on Subsidies and Countervailing Measures, the Union has the possibility to initiate State-to-State dispute settlement against certain foreign subsidies granted by WTO members and limited to goods.
(6)
It is therefore necessary to complement existing Union instruments with a new tool to effectively deal with distortions in the internal market caused by foreign subsidies in order to ensure a level playing field. In particular, the new tool complements Union State aid rules which deal with distortions in the internal market caused by Member State subsidies.
(7)
It is important that rules and procedures to investigate foreign subsidies that actually or potentially distort the internal market be laid down and, where relevant, that those distortions be redressed. Foreign subsidies could distort the internal market if an undertaking benefitting from the foreign subsidy engages in an economic activity in the Union. The proper application and enforcement of this Regulation are to contribute to the resilience of the internal market against distortions caused by foreign subsidies and thereby contribute to the Union’s open strategic autonomy. This Regulation therefore establishes rules for all undertakings, including public undertakings which are directly or indirectly controlled by a State, engaging in an economic activity in the Union. Special attention is to be given to the impact of this Regulation on small and medium-sized enterprises (SMEs) given the significance of the economic activities pursued by them and their contribution to the fulfilment of the Union’s key policy goals.
(8)
To ensure a level playing field throughout the internal market and consistency in the application of this Regulation, the Commission is the sole authority competent to apply this Regulation. The Commission should have the power to examine any foreign subsidy, to the extent it is in the scope of this Regulation, in any sector of the economy on its own initiative, relying thereby on information from all available sources. To ensure effective control, in the specific case of large concentrations (mergers and acquisitions) and public procurement procedures above certain thresholds, the Commission should have the power to review foreign subsidies based on a prior notification by the undertaking to the Commission.
(9)
This Regulation should be applied and interpreted in light of the relevant Union legislation, including that relating to State aid, mergers and public procurement.
(10)
The implementation of this Regulation is without prejudice to the right of each Member State to protect its essential security interests in accordance with Article 346 of the Treaty on Functioning of the European Union (TFEU).
(11)
A foreign subsidy in the context of this Regulation should be understood as a financial contribution which is provided directly or indirectly by a third country, which confers a benefit and which is limited to one or more undertakings or industries. Those conditions are cumulative.
(12)
A financial contribution can be granted through public or private entities. Whether a public entity provided a financial contribution should be determined on a case-by-case basis with due regard to elements such as the characteristics of the relevant entity and the legal and economic environment prevailing in the third country in which the entity operates including the government’s role in the economy of that country. Financial contributions can also be granted through a private entity if the actions of that private entity can be attributed to the third country. The concept of financial contribution includes a broad range of support measures which are not limited to monetary transfers, for instance, granting special or exclusive rights to an undertaking without receiving adequate remuneration in line with normal market conditions.
(13)
A financial contribution should confer a benefit on an undertaking engaging in an economic activity in the internal market. A financial contribution should be considered to confer a benefit on an undertaking if it could not have been obtained under normal market conditions. The existence of a benefit should be determined on the basis of comparative benchmarks, such as the investment practice of private investors, financing rates obtainable on the market, a comparable tax treatment, or the adequate remuneration for a given good or service. If no directly comparable benchmarks are available, existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods. Benefits can, for example, be conferred in the context of the relationship established between public authorities and public undertakings, if such a relationship, and in particular any financing by the public authorities to public undertakings does not comply with normal market conditions. The provision or purchase of goods or services carried out following a competitive, transparent and non-discriminatory tender procedure, is presumed to be in line with normal market conditions. A financial contribution to an undertaking engaging in an economic activity in the internal market should not be considered as conferring a benefit when the benchmark assessment shows that the undertaking would have obtained that benefit under normal market conditions. Transfer pricing in the context of goods and services exchanged within an undertaking can confer a benefit if that transfer pricing is not in line with normal market conditions. The benefit conferred by a financial contribution may be passed to an undertaking engaging in an economic activity in the Union.
(14)
The benefit should be conferred on one or more undertakings or industries. The specificity of the foreign subsidy could be established by law or in fact.
(15)
A foreign subsidy should be considered granted from the moment the beneficiary obtains an entitlement to receive the foreign subsidy. The actual disbursement of the foreign subsidy is not a necessary condition for a foreign subsidy to fall within the scope of this Regulation.
(16)
A financial contribution provided exclusively for the non-economic activities of an undertaking does not constitute a foreign subsidy. However, if a financial contribution for a non-economic activity is used to cross-subsidise the economic activities of the undertaking, it can amount to a foreign subsidy falling under the scope of this Regulation. If an undertaking uses financial contributions, for instance in the form of special or exclusive rights, or financial contributions received to compensate for a burden imposed by public authorities, to cross-subsidise other activities, that cross-subsidisation could be an indication that the special or exclusive rights are provided without adequate remuneration, or that the burden is overcompensated and thus amounts to a foreign subsidy.
(17)
Once the existence of a foreign subsidy is established, the Commission should assess on a case-by-case basis whether it distorts the internal market. Unlike State aid granted by a Member State, foreign subsidies are not generally prohibited.
(18)
It is possible that the lack of transparency concerning many foreign subsidies and the complexity of the commercial reality make it difficult to unequivocally identify or quantify the impact of a given foreign subsidy on the internal market. To determine the distortion, it therefore appears necessary to use a non-exhaustive set of indicators. When assessing the extent to which a foreign subsidy can improve the competitive position of an undertaking and where, in doing so, that foreign subsidy actually or potentially negatively affects competition in the internal market, the Commission could have regard to certain indicators including the amount and nature of the foreign subsidy, the purpose and conditions attached to the foreign subsidy as well as its use in the internal market.
(19)
When using the indicators to determine the existence of a distortion in the internal market, the Commission could take into account various elements such as the size of the foreign subsidy in absolute terms or in relation to the size of the market or to the value of the investment. For instance, a concentration, in the context of which a foreign subsidy covers a substantial part of the purchase price of the target, is likely to be distortive. Similarly, foreign subsidies covering a substantial part of the estimated value of a contract to be awarded in a public procurement procedure are likely to cause distortions. If a foreign subsidy is granted for operating costs, it seems more likely to cause distortions than if it is granted for investment costs. Foreign subsidies to SMEs could be considered less likely to cause distortions than foreign subsidies to large undertakings. Furthermore, the characteristics of the market, and in particular the competitive conditions on the market, such as barriers to entry, should be taken into account. Foreign subsidies in markets characterised by overcapacity or leading to overcapacity by sustaining uneconomic assets or by encouraging investment in capacity expansions that would otherwise not have been built are likely to cause distortions. A foreign subsidy to a beneficiary that shows a low degree of activity in the internal market, measured for instance in terms of turnover achieved in the Union, is less likely to cause distortions than a foreign subsidy to a beneficiary that has a more significant level of activity in the internal market. Foreign subsidies not exceeding EUR 4 million over a consecutive period of three years should be deemed, as a general rule, unlikely to distort the internal market within the meaning of this Regulation. Foreign subsidies to a single undertaking not exceeding the amount of de minimis aid as defined by Article 3(2) of Commission Regulation (EU) No 1407/2013 (4) per third country over a consecutive period of three years should be considered as not distorting the internal market within the meaning of this Regulation.
(20)
Like certain types of State aid, certain categories of foreign subsidies, such as unlimited guarantees, namely guarantees without any limitation as to the amount or the duration of such guarantee, are also likely to create distortions in the internal market because of their nature. The same is true for an unduly advantageous tender, the advantageous nature of which, such as its price, cannot be justified by other factors. Moreover, subsidies in the form of export financing could, unless provided in line with the OECD Arrangement on officially supported export credits, be a cause of particular concern because of their distortive effects. Since those categories of foreign subsidies are most likely to create distortions in the internal market, it is not necessary for the Commission to perform a detailed assessment based on indicators. An undertaking could in any event show that the foreign subsidy in question would not distort the internal market in the specific circumstances of the case.
(21)
Member States, as well as any natural or legal persons are able to submit information on the positive effects of a foreign subsidy, of which the Commission should take due account when carrying out the balancing test. The Commission should consider the positive effects of the foreign subsidy on the basis of the evidence about such positive effects submitted during the investigation. The positive effects should relate to the development of the relevant subsidised economic activity on the internal market. Other positive effects should be taken into account, where appropriate, in order to avoid that the balancing gives rise to unjustified discrimination. The Commission should also examine broader positive effects in relation to the relevant policy objectives, in particular those of the Union. Those policy objectives can include, in particular, a high level of environmental protection and social standards, and the promotion of research and development. The Commission should weigh those positive effects against the negative effects of a foreign subsidy in terms of distortion in the internal market. In the context of a public procurement procedure, the Commission should take into account the availability of alternative sources of supply for the goods and services concerned. The balancing can lead to the conclusion not to impose redressive measures where the positive effects of the foreign subsidy outweigh its negative effects. In the case of categories of foreign subsidies that are deemed most likely to distort the internal market, positive effects are less likely to outweigh negative effects. If the negative effects prevail, the balancing test can help to determine the appropriate nature and level of the commitments or redressive measures. In any event, given that the balancing test considers the positive effects of a foreign subsidy, applying that balancing test should not lead to an outcome for the undertaking that would be worse than if the balancing test had not been applied. Where the Commission carries out a balancing test, it should set out its reasoning in the decision closing an in-depth investigation.
(22)
Where the Commission examines a foreign subsidy on its own initiative, it should have the power to impose redressive measures on an undertaking to remedy any distortion caused by a foreign subsidy in the internal market. Those redressive measures should include structural and non-structural remedies, and the repayment of the foreign subsidy, and should be suitable to remedy the distortion in question and be proportionate. Where the Commission considers alternative redressive measures, which would each fully and effectively remedy the distortion, the Commission should choose the measure which is least burdensome for the undertaking under investigation.
(23)
The undertaking under investigation should have the possibility to offer commitments in order to remedy the distortion caused by the foreign subsidy. If the Commission considers that the commitments offered fully and effectively remedy the distortion, it could accept them and make them binding by decision. In that case, the Commission should not impose redressive measures.
(24)
The undertaking under investigation could offer to repay the subsidy, together with appropriate interest. The Commission should accept a repayment offered as a commitment if it can ascertain that the repayment fully remedies the distortion, is executed in a transparent and verifiable manner and is effective in practice, while taking into account the risk of circumvention of the objectives of this Regulation.
(25)
Unless the undertaking under investigation offers commitments that would fully and effectively remedy the identified distortion, the Commission should have the power to prohibit a concentration or the award of a contract before it takes place. Where the concentration has already been implemented, in particular in cases where no prior notification was required because the notification thresholds were not reached, the distortion can nonetheless be so substantial that it cannot be remedied by behavioural or structural measures or by the repayment of the subsidy. In such cases, the Commission should be able to decide to remedy the distortion by ordering the undertakings to dissolve the concentration.
(26)
The undertaking under investigation could offer or the Commission could, where proportionate and necessary, require the undertakings under investigation to inform the Commission of their participation in future concentrations or public procurement procedures in the Union for an appropriate period of time. The submission of such information, or the response or absence of a response from the Commission, cannot give rise to legitimate expectations on the part of the undertaking that the Commission will not later start an investigation of possible foreign subsidies to the undertaking participating in the concentration or in the public procurement procedure.
(27)
The Commission should have the power, on its own initiative, to examine any information on foreign subsidies. Member States and any natural or legal person or association should be able to provide the Commission with information on alleged foreign subsidies distorting the internal market. The Commission could establish a contact point to facilitate the provision of such information in a confidential manner. When Member States provide the Commission with relevant information on alleged foreign subsidies distorting the internal market, the Commission should ensure that those Member States receive an answer. To investigate possible foreign subsidies and whether they distort the internal market and to remedy such distortions, this Regulation establishes a procedure consisting of two steps, namely a preliminary review and an in-depth investigation. An undertaking subject to either of those two steps should be considered as an undertaking under investigation.
(28)
The Commission should be given appropriate investigative powers to gather all necessary information. It should therefore have the power to request information from any undertaking or association of undertakings throughout the whole procedure. In addition, the Commission should have the power to impose fines or periodic penalty payments for failure to supply the requested information in a timely manner or for supplying incomplete, incorrect or misleading information. The Commission should also be able to address questions to Member States or to third countries. Furthermore, the Commission should have the power to make fact-finding visits at premises located in the Union of an undertaking or association of undertakings, or, if the third country concerned is officially notified and raises no objections, at the premises of the undertakingin the third country. In order to ensure an effective inspection, the Commission should have the power to ask the undertaking or association of undertakings to consent to the inspection. The Commission should also have the power to take decisions on the basis of facts available if the undertaking under investigation or the third country that granted the subsidy does not cooperate.
(29)
Furthermore, where necessary to prevent irreparable damage to competition in the internal market, the Commission should have the power to adopt interim measures.
(30)
Where, as a result of the preliminary review, the Commission has sufficient indications of the existence of a foreign subsidy distorting the internal market, the Commission should have the power to launch an in-depth investigation to gather additional relevant information to assess the foreign subsidy. The undertaking under investigation should be allowed to exercise its rights of defence.
(31)
The Commission should close the in-depth investigation by adopting a decision. It should, as far as possible, endeavour to close the in-depth investigation within 18 months, taking into account, in particular, the complexity of the case as well as the level of cooperation of the undertakings and third countries concerned.
(32)
The Commission should have appropriate instruments to ensure the effectiveness of commitments and redressive measures. If an undertaking does not comply with a decision with commitments, a decision with redressive measures, or a decision ordering interim measures, the Commission should have the power to impose fines or periodic penalty payments of a sufficiently dissuasive nature. The Commission should take into account cases of repeated non-compliance when imposing such fines or periodic penalty payments. In order to reinforce the effectiveness of this Regulation, it is possible for the Commission to apply commitments or redressive measures simultaneously with fines or periodic penalty payments.
(33)
In order to ensure the correct and effective application of this Regulation, the Commission should have the power to revoke a decision and adopt a new one, where the decision was based on incomplete, incorrect or misleading information, where an undertaking acts contrary to its commitments or the redressive measures imposed, or where the commitments or redressive measures were not effective.
(34)
Given the potentially significant impact of concentrations on the internal market, the Commission should have the power, upon notification, to examine information on foreign financial contributions in the context of a proposed concentration. Undertakings should not be allowed to implement the concentration prior to the conclusion of the Commission’s review. The examination by the Commission should follow the same procedure as that of the review of a foreign subsidy on the Commission’s initiative, subject to adjustments to reflect the specificities of concentrations.
(35)
It is necessary to strike a balance between the effective protection of the internal market and the need to limit the administrative burden on undertakings subject to this Regulation. Therefore, only concentrations meeting combined thresholds as defined in this Regulation based on the size of the turnover in the Union and the size of the foreign financial contributions should be subject to mandatory prior notification.
(36)
Below the notification thresholds, the Commission should be able to require the notification of potentially subsidised concentrations that were not yet implemented or the notification of potentially subsidised bids prior to the award of a contract, if it considers that the concentration or the bid would merit ex ante review given its impact in the Union. The Commission should also have the possibility to carry out a review on its own initiative of concentrations already implemented or contracts already awarded.
(37)
When reviewing a concentration, the assessment of whether there is a distortion in the internal market should be limited to the concentration concerned, and only those foreign subsidies granted in the three years prior to the concentration should be considered in the assessment.
(38)
In the context of the ex ante review mechanism for concentrations, undertakings should be able to request pre-notification consultations with the Commission based on good faith, with the aim of receiving guidance on whether the thresholds for notification are met.
(39)
When a concentration is notified to the Commission pursuant to Article 4 of Council Regulation (EC) No 139/2004 (5) and to this Regulation, the Commission should endeavour to limit the administrative burden for the notifying parties under this Regulation. In particular, undertakings should have the option to indicate the specific information submitted in the context of a proceeding under this Regulation that the Commission also has the right to use in proceedings under Regulation (EC) No 139/2004.
(40)
The need to address foreign subsidies distorting the internal market is especially salient in public procurement, given its economic significance in the internal market and the fact that it is financed by taxpayer funds. The Commission should have the power, upon notification prior to the award of a contract, to examine information on foreign financial contributions to the participating economic operator in the context of a public procurement procedure. Prior notifications should be mandatory above a threshold set in this Regulation to capture economically significant cases while minimising the administrative burden and not hindering the participation of SMEs in public procurement. That obligation of prior notification above a threshold should also apply to groups of economic operators referred to in Article 26(2) of Directive 2014/23/EU of the European Parliament and of the Council (6), Article 19(2) of Directive 2014/24/EU of the European Parliament and of the Council (7) and Article 37(2) of Directive 2014/25/EU of the European Parliament and of the Council (8). The Commission also has the right to request the prior notification of a foreign financial contribution during a public procurement procedure despite its estimated value being below the notification thresholds. The Commission should endeavour to limit interference with public procurement procedures, by taking into account how close the date of the award of the contract is when deciding whether to request such prior notification.
(41)
The balance between the development of a European defence and security equipment market, which is essential for maintaining a European Defence Technological and Industrial Base, and the protection of the national security of the Member States requires a specific regime for defence and security contracts covered by Directive 2009/81/EC of the European Parliament and of the Council (9). Public procurement for the award of such contracts should therefore not be subject to notification requirements under this Regulation. Nonetheless, it should be possible to examine the foreign subsidies in the context of such contracts in an ex officio review. Furthermore, public procurement covered by Directive 2009/81/EC and exempted by that Directive or to which the conditions for the application of Article 346 TFEU are fulfilled, whilst taking into account, for instance, that in accordance with the case-law of the Court of Justice of the European Union, the possibility of recourse to such exemption should be interpreted in such a way that its effects do not extend beyond that which is strictly necessary for the protection of the legitimate interests that those provisions help to safeguard and the Commission’s Interpretative communication on the application of Article 296 TFEU in the field of defence procurement, should not be covered by this Regulation.
(42)
Framework agreements are an efficient procurement technique widely used by contracting authorities and contracting entities. The flexibility offered to purchasers after the conclusion of the framework agreement should not be affected by this Regulation. Therefore, the obligation to notify foreign financial contributions in public procurement procedures provided for in this Regulation should be limited to the procedure preceding the conclusion of framework agreements themselves and should not apply to contracts based on a framework agreement.
(43)
Taking into account the urgent nature of procurement procedures conducted in accordance with Article 27(3) or 28(6) of Directive 2014/24/EU or Article 45(3) of Directive 2014/25/EU, the Commission should exercise its best efforts to prioritise such procedures during a preliminary review and an in-depth investigation to reach a meaningful conclusion as soon as feasible. This should apply accordingly to similar procedures conducted in accordance with Directive 2014/23/EU.
(44)
Due to the specificities of multi-stage procedures in public procurement, the Commission should start a preliminary review with the relevant information available in a notification when submitting the request to participate. To ensure the completeness of information and the speed of investigation, an updated notification should be submitted with the final tender. The Commission should also have the right to ask for any supplementary information before the submission of the final tender.
(45)
This Regulation does not address access by third-country economic operators to the Union procurement market. That matter is covered by the relevant Union law and international agreements.
(46)
When a foreign financial contribution is notified in the context of a public procurement procedure, the assessment should be limited to that procedure.
(47)
Where appropriate, the Commission should seek ways to ensure the use of electronic means of communication for facilitating the fulfilment of obligations regarding public procurement under this Regulation.
(48)
It should be ensured that the principles governing public procurement, in particular proportionality, non-discrimination, equal treatment, transparency and competition, are respected as regards all economic operators involved in the public procurement procedure, regardless of investigations initiated and pending pursuant to this Regulation. This Regulation is without prejudice to Directives 2014/23/EU, 2014/24/EU and 2014/25/EU as regards the applicable obligations in the fields of environmental, social and labour law.
(49)
Contracting authorities or contracting entities are able to decide to award a contract in the form of separate lots, in accordance, in particular with Article 46 of Directive 2014/24/EU and Article 65 of Directive 2014/25/EU and in observance of the prohibition of artificial splitting. Foreign financial contributions should be notified for tenderers applying for lots of a value above an applicable threshold.
(50)
This Regulation should not affect the possibility for economic operators to rely on the capacities of other entities in accordance with Directives 2014/23/EU, 2014/24/EU and 2014/25/EU.
(51)
This Regulation should not affect the possibility of the contracting authority or contracting entity to require the economic operators to supplement, clarify or complete the relevant information or documentation, as provided by Directive 2014/23/EU, Directive 2014/24/EU or Directive 2014/25/EU or as provided by the national law implementing them, provided that such requests are made in full compliance with the principles of equal treatment and transparency.
(52)
There is a strong tendency for public purchasers to centralise their purchases to achieve economies of scale and efficiency gains. Such central purchasing bodies are contracting authorities or contracting entities in the meaning of Directives 2009/81/EC, 2014/24/EU and 2014/25/EU. It is therefore appropriate that the Commission should be able to examine foreign subsidies in the context of contracts awarded by such contracting authorities or contracting entities.
(53)
Foreign subsidies that enable an economic operator to submit a tender which is unduly advantageous in relation to the works, supplies or services concerned should be deemed to actually or potentially create a distortion in a public procurement procedure. Those distortions should therefore be assessed on the basis of a non-exhaustive set of indicators. The indicators should make it possible to determine how the foreign subsidy distorts competition by improving the competitive position of an undertaking and enabling it to submit an unduly advantageous tender. The opportunity should be given to economic operators to justify that the tender is not unduly advantageous, including by adducing the elements referred to in Article 69(2) of Directive 2014/24/EU or Article 84(2) of Directive 2014/25/EU, regulating abnormally low tenders. The prohibition of the award should apply only where the advantageous nature of the tender benefiting from foreign subsidies cannot be justified by other factors, where the tenderer would be awarded the contract and where the undertaking submitting the tender did not offer commitments considered appropriate and sufficient to fully and effectively remedy the distortion. Accordingly, the prohibition of the award concerns the specific procedure in which the unduly advantageous tender was submitted. The Commission’s finding that an economic operator benefitted from a foreign subsidy distorting the internal market enabling it to submit an unduly advantageous tender therefore should not be considered as an element giving rise to an exclusion pursuant to the facultative grounds for exclusion laid down in Article 38(7) of Directive 2014/23/EU, Article 57(4) of Directive 2014/24/EU or Article 80 of Directive 2014/25/EU in the same or another public procurement procedure conducted in accordance with those Directives.
(54)
An unduly advantageous tender could also result from foreign subsidies granted to a subcontractor or supplier because of its competitive impact on the tender submitted to a contracting authority or contracting entity. However, to limit the administrative burden, only main subcontractors or main suppliers, that is those whose products or services relate to key elements of the contract or exceed a certain percentage of the value of the contract should notify foreign financial contributions. Elements of the contract can be considered to be key elements, in particular, on the basis of the specific relevance of the element to the quality of the tender including specific know-how, technology, specialised staff, patents or similar advantages available to the subcontractor or supplier, especially where those elements are relied upon for fulfilling the majority of at least one of the selection criteria in a public procurement procedure. In order to ensure a stable factual basis for review, the preliminary review should take into account the main subcontractors and suppliers already known at the stage of the submission of the complete notification or declaration or updated notification or declaration in the case of multi-stage procedures. This Regulation should not affect the possibility for economic operators to use new subcontractors in the execution of their contracts. As a result, changing subcontractors and suppliers after the submission of the complete notification or declaration or updated notification or declaration or during the execution of a contract should not create additional notification obligations, but it should be possible for the Commission to open an ex officio review if it has information, including from any Member State, natural or legal person or association, that those subcontractors and suppliers could have benefitted from foreign subsidies.
(55)
In line with the Directives on public procurement, the most economically advantageous tender from the point of view of the contracting authority or contracting entity should be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle costing, and can include the best price-quality ratio, which should be assessed on the basis of criteria, including qualitative, environmental or social aspects, linked to the subject-matter of the contract in question.
(56)
In the context of judicial remedies relating to the application of this Regulation concerning in particular public procurement procedures, a national court or tribunal within the meaning of Article 267 TFEU, which considers a decision on the question necessary to enable them to give judgment, has the right to, or in the case provided for in Article 267 TFEU, must, request the Court of Justice to give a preliminary ruling on the interpretation of Union law, including this Regulation. However, in light of the settled case-law of the Court of Justice, that national court or tribunal does not have the right to refer a question on the validity of the decision of the Commission at the request of an economic operator concerned which had the opportunity to bring an action for annulment of that decision, in particular if it was directly and individually concerned by that decision, but had not done so within the period laid down in Article 263 TFEU.
(57)
Taking into account the nature of the ex ante review mechanism for concentrations and public procurement awards, and the need for legal certainty regarding those specific transactions, a concentration or public procurement tender notified and assessed under the respective procedures should not be reviewed again by the Commission on its own initiative. It is possible, however, that the financial contributions of which the Commission was informed through the notification procedure also be relevant outside that concentration or procurement procedure.
(58)
Member States should cooperate effectively with the Commission in the application of this Regulation. To facilitate such cooperation, the Commission should be able to set up a cooperation mechanism.
(59)
In order to gather information on foreign subsidies, the Commission should have the possibility to launch investigations regarding specific sectors of the economy, particular types of economic activity or the use of particular foreign subsidy instruments. The Commission should be able to use the information obtained from such market investigations to review certain transactions in the framework of the procedures under this Regulation.
(60)
When the Commission suspects the existence of repeated foreign subsidies distorting the internal market or where several enforcement actions under this Regulation identify foreign subsidies distorting the internal market granted by the same third country, the Commission should be able to engage in a dialogue with the third country concerned to explore options aimed at obtaining the cessation or modification of the foreign subsidies distorting the internal market with a view to eliminating their distortive effects in the internal market. Where a bilateral agreement between the Union and a third country provides for a consultation mechanism that covers foreign subsidies distorting the internal market falling within the scope of this Regulation, such a consultation mechanism could be used to facilitate the third-country dialogue. The dialogue with the third-country should not preclude the Commission from opening or continuing reviews under this Regulation. The Commission should keep the European Parliament and the Council informed of relevant developments.
(61)
For reasons of legal certainty, it is appropriate to limit the period within which it is possible for the Commission to investigate a foreign subsidy to 10 years from the date of granting that foreign subsidy.
(62)
For the same reasons, it is appropriate to provide for limitation periods for the imposition and enforcement of fines or periodic penalty payments.
(63)
In the interest of transparency and legal certainty, it is appropriate that the Commission publishes or makes public, where applicable either in full or in a summary form all decisions it adopts under this Regulation.
(64)
The Commission, when publishing its decisions, should respect the rules on professional secrecy, including the protection of all confidential information, and business secrets, in accordance with Article 339 TFEU. The processing of personal data for the purposes of this Regulation should be carried out in accordance with Regulation (EU) 2018/1725 of the European Parliament and of the Council (10) and Regulation (EU) 2016/679 of the European Parliament and of the Council (11), whichever is applicable for the processing in question.
(65)
Where information marked by the undertaking as confidential or a business secret does not seem to be covered by obligations of professional secrecy, it is appropriate to have a mechanism in place according to which the Commission has the right to decide the extent to which such information can be disclosed. Any decision to reject a claim that information is confidential should indicate a period at the end of which the information will be disclosed, so that the respondent can make use of any judicial protection available to it, including any interim measure.
(66)
The undertakings under investigation under this Regulation should have the opportunity to submit their observations on the grounds on which the Commission intends to adopt a decision and should therefore be entitled to have access to the file. While ensuring preservation of the rights of defence of the undertakings under investigation, it is essential that business secrets be protected.
(67)
If the provider of the information agrees, the Commission should be able to use information acquired under this Regulation in the application of other Union acts.
(68)
Member States and the Commission should take all necessary measures to ensure the protection of classified information in compliance with, in particular, the Agreement between the Member States of the European Union, meeting within the Council, regarding the protection of classified information exchanged in the interest of the European Union (12), Commission Decision (EU, Euratom) 2015/443 (13) and Commission Decision (EU, Euratom) 2015/444 (14).
(69)
The implementation of this Regulation by the Union should comply with Union law, the WTO Agreement and be consistent with commitments made under other trade and investment agreements to which the Union or the Member States are parties. This Regulation should complement the Union effort to improve multilateral rules on addressing distortive subsidies.
(70)
Restrictions upon the freedoms set out in Articles 34, 49, 56 and 63 TFEU can be justified by the need to avoid unfair competition, provided that such restrictions, like other restrictions of fundamental freedoms comply with the general principles of Union law, such as proportionality, legal certainty, and with fundamental rights.
(71)
It is possible that the implementation of this Regulation overlaps with sectoral rules, in particular in the area of maritime and air transport. Therefore, it is necessary to clarify the relationship between this Regulation and sectoral instruments dealing with foreign subsidies, namely Council Regulation (EEC) No 4057/86 (15), Regulation (EU) 2016/1035 of the European Parliament and of the Council (16) and Regulation (EU) 2019/712 of the European Parliament and of the Council (17).
(72)
Acts of the Commission under this Regulation are subject to review by the Court of Justice in accordance with Article 263 TFEU. The Court of Justice should, in accordance with Article 261 TFEU, be given unlimited jurisdiction in respect of decisions by which the Commission imposes fines or periodic penalty payments.
(73)
In order to foster the predictability of this Regulation, the Commission should publish and regularly update guidelines regarding the criteria for determining the existence of a distortion caused by a foreign subsidy on the internal market, the application of the balancing test, the application of its power to request a prior notification of any concentration or foreign financial contributions received by an economic operator in a public procurement procedure, and the assessment of a distortion in a public procurement procedure. When issuing such guidelines, the Commission should conduct appropriate consultations with stakeholders and Member States. In order to facilitate the implementation of this Regulation in the early stages of its application, the Commission should endeavour to make public clarifications on the application of those provisions before the publication of the guidelines.
(74)
In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission in accordance with Article 291 TFEU. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (18) and relate to: decisions closing the in-depth investigations, the imposition of interim measures, decisions on concentrations that have been implemented in breach of the notification obligation or in breach of a decision with commitments or of a decision prohibiting a concentration or the award of the contract in a public procurement procedure, the revocation of certain decisions, and the implementing powers relating to the form, content, procedural details and related items regarding the preliminary review and the in-depth investigation.
(75)
The Commission should have the possibility to establish a simplified procedure under which it treats certain concentrations or public procurement procedures on the basis that they appear less likely to give rise to distortions of competition in the internal market caused by foreign subsidies.
(76)
In order to ensure a level playing field on the internal market also in the long term, with a view to ensuring appropriate coverage of cases investigated both through notifications as well as ex officio while limiting undue administrative burden, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending the notification thresholds for concentrations and for public procurement procedures, as well as reducing the time limits for the preliminary review and the in-depth investigations of notified concentrations or notified financial contributions in the context of a public procurement procedure. Without prejudice to the possibility of amending the notification thresholds for concentrations and public procurement by means of a legislative proposal, including in the context of the review provided for by this Regulation, those thresholds can be amended by a delegated act once during the period of delegation under this Regulation. In relation to financial contributions in the context of a public procurement procedure, the power to adopt such an act should be exercised in a way that takes into account the interests of SMEs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (19). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.
(77)
Where a concentration is notifiable pursuant to this Regulation, financial contributions to any of the parties to the concentration granted in the three years prior to the date of application of this Regulation should fall within the scope of this Regulation. In the context of a public procurement procedure, this Regulation should also apply to a financial contribution granted to an economic operator in the three years prior to the date of application of this Regulation,
