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With the Foreign Subsidies Regulation (FSR) under review, now is the moment to ensure it delivers on its objectives without creating unnecessary complexity. The FSR plays an important role in addressing distortive foreign subsidies. However, its broad scope and resource-intensive procedures risk undermining its effectiveness. 

The current framework creates significant burdens for investors and contracting authorities managing public procurement processes. Changes to the Implementing Regulation alone would only provide limited value. Simplification will require targeted amendments to the primary legislation. 

Read more about proposed amendments that would help refocus the FSR on high-risk cases and support the EU’s competitiveness goals.

The EU proposed the Foreign Subsidies Regulation (FSR) in 2021 to address foreign subsidies distorting the Single Market. Operating as a screening instrument behind merger control, it requires companies to notify the European Commission of foreign financial contributions (FFCs) they may receive when participating in public procurement or mergers and acquisitions activity. Preventing FFCs from distorting the Single Market is an important goal – and one that must be achieved without creating its own disruptions.

Will Europe choose alignment or fragmentation in foreign investment screening? In a recent blog for fDi Intelligence, Malte Lohan, CEO, and Andrew Hill, Senior Policy Adviser, AmCham EU, examine how divergent national regimes have created legal uncertainty and unnecessary administrative burden for investors and authorities alike. Today’s patchwork encourages over-notification, overwhelms regulators with low-risk cases and introduces avoidable friction for capital. The revised EU Foreign Investment Screening Regulation presents an opportunity to enhance coherence and competitiveness. Its success will depend on consistent implementation across Member States. Convergence would streamline beneficial investment and strengthen the Single Market, while gold-plating risks renewed fragmentation. Read the full op-ed in fDi Intelligence’s Economic Security Watch.