The Committee on International Trade backed a proposal designed to counteract market-distorting foreign subsidies granted to companies operating in the EU.
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The draft law, as adopted by the Committee on International Trade by 42 votes unanimously, gives the EU Commission the power to investigate and counteract market-distorting foreign subsidies granted to companies set to acquire EU businesses or take part in EU public procurement.
The goal of the new tool is to ensure fair competition among firms active on the EU market; while EU countries have to abide by state aid rules, there is no comparable regime in place for support granted by non-EU countries.
MEPs agreed that the Commission must be able to investigate and mitigate the effects of such support that can take the form of foreign capital injections, loans, fiscal incentives, tax exemptions and debt forgiveness.
In addition, the committee adopted amendments to make the tool more effective and improve legal certainty.
The committee lowered the thresholds above which companies would be obliged to inform the Commission about their foreign subsidies, extending the scope of the new rules to a larger number of acquisitions, mergers and public procurements.
MEPs also reduced red tape for companies by, for instance, shortening the period the Commission has to investigate foreign subsidies to companies. In addition, they call on the Commission to put forward guidelines on how to assess foreign subsidies and balance their market-distorting effects against their potential wider benefits.
Finally, MEPs ensured that EU countries and companies can inform the Commission confidentially about potentially distortive subsidies, and that firms can consult the Commission informally on whether they need to notify it about their subsidies.
Parliament is expected to vote on its position in plenary in early May. The adopted report will serve as the mandate for negotiations with the Council to agree on the final version of the new regulation for it to enter into force. ■