EU:n ulkomaisten tukien asetus (FSR)/EN

Suomeksi

The EU's Foreign Subsidies Regulation (FSR; Regulation (EU) 2022/2560) gives the European Commission the power to investigate, and where necessary intervene against, financial support granted by non-EU states to undertakings that distorts competition in the EU internal market. For an M&A lawyer, the most relevant part of the Regulation is Chapter 3, which establishes a separate pre-notification obligation to the Commission for mergers above certain thresholds, independent of the EU Merger Regulation.

Avainkohdat

• Mistä on kyse: The FSR (Regulation (EU) 2022/2560) enables the Commission to intervene against financial support granted by third countries (non-EU states) to undertakings where that support distorts the EU internal market. Chapter 3 requires mergers exceeding certain thresholds to be pre-notified to the Commission as its own, separate procedure.
• Miksi sillä on kaupallista merkitystä: The FSR notification obligation is particularly relevant for undertakings whose owners, financiers or group structure include non-EU states, state-owned companies, or state-linked investment funds (e.g. sovereign wealth funds). It can affect the transaction's timetable and conditions precedent regardless of whether the EU Merger Regulation thresholds are met.
• Mikä menee useimmin pieleen: It is a mistake to assume that the FSR notification obligation automatically follows from the EU Merger Regulation notification obligation, or that it is absent if the transaction falls below the EUMR thresholds. The FSR's thresholds and its concept of "financial contribution" are independent of, and considerably broader than, the EUMR (covering, among other things, loans, guarantees, tax relief and below-market financing) — the background of the parties to a transaction must therefore be mapped separately from an FSR perspective already at the due diligence stage.

Background and Key Facts

The Regulation's official title is Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market (the "Foreign Subsidies Regulation", FSR). The Regulation was adopted on 14 December 2022 and entered into force on the twentieth day following its publication, i.e. 12 January 2023. The Regulation began to apply generally on 12 July 2023, and the notification obligation for mergers (and public procurement) under Chapter 3 entered into force on 12 October 2023. On these last two dates, see the verification note at the end of this article — some more recent Commission pages use the dates 13 July 2023 and 13 October 2023, owing to a corrigendum made to the Regulation in September 2024.

The FSR should be kept conceptually distinct from two other, similarly named regulatory regimes:

• The EU's state aid rules (Articles 107–109 TFEU) concern support granted by EU Member States to undertakings. The FSR, by contrast, concerns support granted by non-EU (third) countries — the Regulation expressly fills the gap that arises because EU state aid control does not cover the conduct of third countries.
• The EU Merger Regulation (Council Regulation (EC) No 139/2004, EUMR) concerns the assessment of the competitive effects of mergers from a market-structure perspective. The FSR's merger procedure under Chapter 3 is an entirely separate and parallel procedure, in which what is assessed is whether foreign financial support received by the parties to the transaction distorts the internal market — not the transaction's effect on the competitive structure.

Käytännön huomio

A single merger can today trigger three independent, mutually separate notification and approval procedures: (1) a merger notification to the Commission under the EU Merger Regulation, (2) a national foreign direct investment (FDI) screening procedure in one or more Member States, and (3) a foreign subsidies notification to the Commission under the FSR. These three procedures do not replace one another, they have different thresholds, different authorities handling them (partly the same directorate-general, DG COMP, for the EUMR and the FSR, but different teams and formally separate filings) and each has its own standstill obligation. When drafting the transaction timetable and conditions precedent, all three must be mapped separately already at the outset of the transaction.

Notification Thresholds (Article 20)

The merger notification thresholds laid down in Article 20 of the FSR are cumulative — both must be met for the notification obligation to arise:

• EU turnover threshold (Article 20(3)(a)): at least one of the parties to the transaction — either of the merging undertakings, the target of the acquisition, or the joint venture — is established in the EU and generates a combined turnover there of at least EUR 500 million.
• Foreign financial contribution threshold (Article 20(3)(b)): the parties to the transaction have together received foreign financial contributions (FFC) from third countries totalling more than EUR 50 million in the three years preceding the conclusion of the transaction (the conclusion of the agreement, the announcement of the public tender offer, or the acquisition of control).

Note: earlier (now corrected) drafts circulated incorrect information about a EUR 1 billion EU turnover threshold. This is not accurate — the correct threshold pair, repeatedly confirmed on the Commission's own pages, is EUR 500 million (EU turnover) + EUR 50 million (foreign financial contributions over three years). The thresholds are therefore considerably lower than the EU Merger Regulation's turnover thresholds, which means the FSR can also apply to transactions that do not exceed the EUMR's or national competition laws' notification thresholds. Articles 22 and 23 of the FSR contain more detailed rules on calculating turnover and aggregating financial contributions at group level.

"Foreign Financial Contribution" as a Concept

Under Article 3 of the FSR, a "financial contribution" is a very broad concept, covering an advantage granted directly or indirectly by a third country — by various levels of government, public entities, or private actors whose conduct is attributable to the third country — in three main categories:

• transfers of funds or liabilities (e.g. capital injections, grants, loans, loan guarantees, tax relief, debt forgiveness);
• the foregoing of revenue that is otherwise due (e.g. tax exemptions, the granting of special or exclusive rights without adequate remuneration); and
• the provision or purchase of goods or services.

It is important to note that a "financial contribution" (FFC) and an actual "foreign subsidy" are not the same thing: a financial contribution is broad — in practice almost any financial advantage granted by a third country — whereas it becomes a "foreign subsidy", and thus subject to substantive assessment (the balancing test weighing distortion against benefits), only if it confers an advantage on the undertaking that is limited to one or more undertakings or industries. The notification threshold calculation (Article 20(3)(b)), however, uses the broad concept of "financial contribution" as such, regardless of whether it ultimately amounts to a distortive subsidy — this makes the EUR 50 million threshold, in practice, easily exceeded even in an ordinary financing structure, if the financier has, for example, been a state-owned bank or a sovereign wealth fund.

Notification Procedure and Review Timeline: Phase 1 and Phase 2

The structure of the FSR's merger procedure resembles the EU Merger Regulation's two-phase procedure, but the time limits and assessment criteria are independent:

• Pre-notification and standstill obligation (Articles 21 and 24): a notifiable merger must be notified to the Commission in advance, and may not be implemented before notification and Commission approval (the standstill obligation) — comparable to Article 7 of the EUMR.
• Phase 1 (preliminary review): the Commission has 25 working days from receipt of a complete notification either to find that there are no indications of a distortive foreign subsidy, or to decide to open an in-depth investigation (Phase 2).
• Phase 2 (in-depth investigation): the Commission has 90 working days from the decision to open the investigation to take a final decision; the time limit may be extended by 15 working days if the parties offer commitments. At the conclusion of Phase 2, the Commission may either approve the transaction unconditionally, approve it subject to commitments (remedies), or prohibit it altogether.

Sanctions: Fines and Periodic Penalty Payments (Article 26)

Article 26 of the FSR contains the fine and periodic penalty payment provisions applicable to mergers. According to the Commission's own information published on EUR-Lex, the levels of sanction are as follows:

• Up to 1% of total annual turnover: for supplying incorrect, incomplete or misleading information in the notification or in response to a request for information, for failing to supply information within a set time limit, or for obstructing an inspection.
• Up to 10% of total turnover: for implementing a notifiable merger before notification or Commission approval (so-called gun jumping, breach of the standstill obligation), as well as for breaching commitments given as a condition of a Commission prohibition decision or of approval of the transaction.
• A periodic penalty payment of up to 5% of average daily total turnover for each day of delay, for example to compel the supply of missing information or compliance with commitments.

The level of sanctions corresponds structurally to the fine provisions of Articles 14 and 15 of the EU Merger Regulation, but is set out in the FSR expressly as its own, independent set of rules.

Practical Examples of Phase 2 Investigations

Only a few Phase 2 investigations have so far been opened under the FSR. Two key, public examples:

e& / PPF Telecom Group. On 10 June 2024, the Commission opened the first-ever FSR Phase 2 investigation to examine foreign financial contributions granted by the United Arab Emirates to the state-owned Emirati telecommunications company e& (Emirates Telecommunications Group Company PJSC) in connection with its planned acquisition of part of the PPF Telecom Group, in particular an unlimited state guarantee and below-market financing. On 24 September 2024, the Commission conditionally approved the transaction on the basis of commitments offered by e& (including the removal of the unlimited state guarantee and financing restrictions on PPF's EU business) — this was the first-ever commitment decision taken under the FSR.

ADNOC / Covestro. On 30 July 2025, the Commission opened its second FSR Phase 2 investigation in connection with the planned acquisition of Covestro AG (a German chemicals company) by the Abu Dhabi state-owned oil company ADNOC (Abu Dhabi National Oil Company PJSC), examining a suspected unlimited state guarantee, a capital increase commitment and certain tax advantages granted by the United Arab Emirates. On 18 November 2025, the Commission conditionally approved the transaction on the basis of commitments offered by ADNOC (including the removal of the state guarantee and the licensing of Covestro's sustainable-technology patents to competitors on open terms).

A common feature of both cases is an unlimited state guarantee, which the Commission regards, as a starting point, as a particularly distortive form of subsidy — this is worth bearing in mind if a party to a transaction has a comparable guarantee from a third country granted by its parent or sister company.

See Also

• The EU Merger Regulation and the One-Stop-Shop Principle
• Competition Law Clauses in M&A Agreements
• Screening of Foreign Acquisitions in Finland

Sources

Lainsäädäntö ja lähteet tarkistettu 6.9.2026.