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©Reuters. The European Parliament supports a rule that avoids distortions of foreign subsidies
Brussels, Nov 10 (.).- The plenary session of the European Parliament gave the green light this Thursday to new rules to prevent foreign investments through subsidies from third countries from causing a “distortion” in the internal market of the European Union (EU). ).
The European Commission may, through the new regulation that the European Parliament has supported by 598 votes in favor, five against and nine abstentions, investigate the subsidies granted by public authorities not belonging to the EU to companies that operate in community territory.
If subsidies are found to distort competition, the Commission may apply measures to address this problem and prevent companies benefiting from, for example, zero-interest loans, below-cost financing, preferential tax treatment or direct state subsidies from outperforming its European competitors in merger, acquisition or public contracting processes, the Parliament explained in a statement.
The EU decided to act in this area because it cannot regulate the aid granted by third countries, but instead, companies in the Union must respect strict rules regarding state aid.
The new rules mean that companies have to inform the Commission about planned mergers and acquisitions if one of the parties has an EU turnover of at least €500 million and there is a foreign financial contribution of at least €50 million. .
The Commission will also investigate public tenders if the value of the contract is at least €250 million.
The Parliament, co-legislator, included in the scope of the regulation state companies, which are usually recipients of subsidies, and shortened the time for the Commission to carry out investigations.
It also included the Commission having to publish guidelines on how it assesses the distorting nature of foreign subsidies and how it judges their effect on the market against their potential benefits.
MEPs also introduced in the legislation that companies can consult the Commission to verify if they must disclose the subsidies received.
The Council of the EU (the countries) will then officially adopt the regulation, which will enter into force 20 days after its publication in the Official Journal of the Union.
According to Parliament data, the EU received 117 billion euros in foreign direct investment in 2021, while foreign subsidies have been able to facilitate the acquisition of community companies, influence investment decisions or distort trade in services to the detriment of competition .
(More information on the European Union at euroefe.euractiv.es)
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