Compliance Briefing — July 12, 2023

Executive briefing: Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market entered into force on 12 July 2023. From 12 October 2023, companies must notify certain concentrations and large public procurement tenders when foreign financial contributions exceed thresholds.

Key compliance checkpoints

Transaction scoping. Identify mergers, acquisitions, and joint ventures with EU turnover above €500 million and combined foreign financial contributions over €50 million in the previous three years.
Procurement notifications. Flag public tenders with contract value of at least €250 million (or €125 million for lots) when foreign contributions exceed €4 million per non-EU country.
Contribution tracking. Catalogue grants, loans, guarantees, tax incentives, and equity injections received from non-EU governments.

Operational priorities

Data governance. Build central repositories for foreign financial contributions across subsidiaries and investment vehicles.
Deal timelines. Integrate notification reviews—25 working day initial assessment plus potential in-depth investigations—into M&A and procurement schedules.
Cross-functional coordination. Engage legal, finance, and government affairs teams to validate subsidy data and prepare justifications.

Enablement moves

Develop questionnaires for portfolio companies and suppliers to disclose foreign support early in transaction planning.
Align FSR monitoring with EU merger control, FDI screening, and state aid compliance programs.
Prepare mitigation strategies (remedies, commitments) in case the Commission identifies distortive subsidies.

Sources

Zeph Tech supports corporate strategists with FSR contribution mapping, notification preparation, and remedy scenario planning.