Activities of Catharina RINZEMA related to 2021/0114(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market
Amendments (54)
Amendment 61 #
Proposal for a regulation
Recital 5
Recital 5
(5) It is therefore necessary to complement existing Union instruments with a new tool to effectively deal with distortions in the internal market caused by foreign subsidies and ensure a level playing field. In particular, the new tool complements Union State aid rules which deal with distortions in the internal market caused by Member State subsidies. In parallel, the Union should promote effective rules on subsidies at multilateral level.
Amendment 63 #
Proposal for a regulation
Recital 6
Recital 6
(6) Rules and procedures to investigate foreign subsidies that actually or potentially distort the internal market should be laid down and, where relevant, those distortions should be redressed. Foreign subsidies could distort the internal market if the undertaking benefitting from the foreign subsidy engages in an economic activity in the Union. The proper application and enforcement of this Regulation will contribute to the resilience of the internal market against distortions caused by external economic actors. This Regulation should therefore establish rules for all undertakings engaging in an economic activity in the Union. Given the significance of the economic activities pursued by SMEs, and their contribution to the fulfilment of the Union’s key policy goals, special attention is given to the impact of this Regulation on them.
Amendment 71 #
Proposal for a regulation
Recital 9
Recital 9
(9) There should be a financial contribution provided, directly or indirectly, by the public authorities of a third country. The financial contribution may be granted through public or private entities. Whether a public entity provides a financial contribution should be determined on a case-by-case basis with due regard to elements such as the characteristics of the relevant entity and the legal and economic environment prevailing in the third country in which the entity operates including the government’s role in the economy of that third country. Financial contributions may also be granted through a private entity if its actions can be attributed to the third country. A financial contribution includes the privileged access to the domestic market that an undertaking has, for instance due to special or exclusive rights that were granted to an undertaking without receiving adequate remuneration in conformity with market rates. Such a privileged access could lead to an unfair competitive advantage and create distortions in the internal market.
Amendment 81 #
Proposal for a regulation
Recital 10
Recital 10
(10) Such aA financial contribution should confer a benefit to an undertaking engaging in an economic activity in the internal market. A financial contribution that benefits an entity engaging in non- economic activities does not constitute a foreign subsidy. The existence of a benefit should be determined on the basis of comparative benchmarks, such as the investment practice of private investors, rates for financing obtainable on the market, a comparable tax treatment, or the adequate remuneration for a given good or service.. If no directly comparable benchmarks are available, existing benchmarks could be adjusted or alternative benchmarks could be established based on generally accepted assessment methods.
Amendment 86 #
Proposal for a regulation
Recital 14
Recital 14
(14) When applying these indicators, the Commission could take into account different elements such as the size of the subsidy in absolute terms or in relation to the size of the market or to the value of the investment. For instance, a concentration, in the context of which a foreign subsidy covers a substantial part of the purchase price of the target, is likely to be distortive. Similarly, foreign subsidies covering a substantial part of the estimated value of a contract to be awarded in a public procurement procedure are likely to cause distortions. If a foreign subsidy is granted for operating costs, it seems more likely to cause distortions than if it is granted for investment costs. Foreign subsidies to small and medium-sized undertakings may be considered less likely to cause distortions than foreign subsidies to large undertakings. Furthermore, the characteristics of the market, and in particular the competitive conditions on the market, such as barriers to entry, should be taken into account. Foreign subsidies leading to overcapacity by sustaining uneconomic assets or by encouraging investment in capacity expansions that would otherwise not have been built are likely to cause distortions. A foreign subsidy to a beneficiary that shows a low degree of activity in the internal market, measured for instance in terms of turnover achieved in the Union, is less likely to cause distortions than a foreign subsidy to a beneficiary that has a more significant level of activity in the internal market. Finally, foreign subsidies not exceeding EUR 5 million200.000 should be deemed, as a general rule, unlikely to distort the internal market within the meaning of this Regulation if the undertaking is established in the internal market, and EUR 5 million if the undertaking is established in a third country. The Commission should make available guidelines to clarify the assessment of the distortive nature of a foreign subsidy and provide legal certainty to undertakings.
Amendment 91 #
Proposal for a regulation
Recital 16
Recital 16
(16) The Commission should take into account the positive effects of the foreign subsidy on the development of the relevant subsidised economic activity. The Commission should weigh these positive effects against the negative effects of a foreign subsidy in terms of distortion on the internal market in order to determine, if applicable, the appropriate redressive measure or accept commitments. The positive effects of the foreign subsidy should effectively contribute to achieving the objectives of Union policies. The balancing may also lead to the conclusion that no redressive measures should be imposed. Categories of foreign subsidies that are deemed most likely to distort the internal market are less likely to have more positive than negative effects. The Commission should make available guidelines to clarify the criteria used for the application of the balancing test, including the positive effects in relation to the objectives of Union policies.
Amendment 97 #
Proposal for a regulation
Recital 19
Recital 19
(19) The undertaking concerned could offer to repay the subsidy, together with appropriate interest. The Commission shcould accept a repayment offered as a commitment if it can ascertain that the repayment fully remedies the distortion, is executed in a transparent manner and is effective in practice, while taking into account the risk of circumvention of the objectives of this Regulation.
Amendment 107 #
Proposal for a regulation
Recital 21 a (new)
Recital 21 a (new)
(21 a) A contact point should be established by the Commission so that Member States or interested parties such as undertakings or trade associations can share information regarding actual or potential cases of distortion on the internal market with the Commission. The Commission can use this information for the relevant procedures under this Regulation, including the ex officio review.
Amendment 110 #
(22) The Commission should be given adequate investigative powers to gather all necessary information. It should therefore have the power to request information from any undertaking or association of undertakings throughout the whole procedure. The Commission should be able to use information from any available source, including from Member States and interested parties such as undertakings and trade associations. In addition, the Commission should have the power to impose fines and periodic penalty payments for failure to timely supply the requested information or for supplying incomplete, incorrect or misleading information. The Commission could also address questions to Member States or to third countries. Furthermore, the Commission should have the power to make fact-finding visits at the Union premises of the undertaking, or, subject to agreement by the undertaking and the third country concerned, at the premises of the undertaking in the third country. The Commission should also have the power to take decisions on the basis of facts available if the undertaking in question does not cooperate.
Amendment 115 #
Proposal for a regulation
Recital 26
Recital 26
(26) The Commission should have appropriate instruments to ensure the effectiveness of commitments and redressive measures. If the undertaking concerned does not comply with a decision with commitments, a decision imposing redressive measures, or a decision ordering interim measures, the Commission should have the power to impose fines and periodic penalty payments. The Commission shall take into account cases of repeated non-compliance when imposing such fines and periodic penalty payments.
Amendment 120 #
Proposal for a regulation
Recital 30
Recital 30
(30) It is necessary to strike a balance between effective protection of the internal market and the need to limit the administrative burden on undertakings subject to this Regulation. Therefore, only concentrations meeting combined thresholds as defined in this Regulation based on the size of the turnover in the Union and the size of the subsidy should be subject to mandatory prior notification. The effectiveness of the threshold for the notification obligation for concentrations should be reviewed one year after the entry into force of this Regulation.
Amendment 122 #
Proposal for a regulation
Recital 31
Recital 31
(31) Below the notification thresholds, the Commission cshould require the notification of potentially subsidised concentrations that were not yet implemented or the notification of potentially subsidised bids prior to the award of a public contract, if it considers that the concentration or the bid would merit ex-ante review given their impact in the Union. The Commission should also have the possibility to carry out a review on its own initiative of already implemented concentrations or awarded public contracts.
Amendment 129 #
Proposal for a regulation
Recital 32
Recital 32
(32) When reviewing a concentration, the assessment of whether there is a distortion in the internal market should be limited to the concentration at stake, and only foreign subsidies granted in the three years prior to the concentration or known subsidies that have already been established and shall become effective following the concentration should be considered in the assessment.
Amendment 135 #
Proposal for a regulation
Recital 34
Recital 34
(34) When a foreign financial contribution is notified in the context of a public procurement procedure, the assessment should be limited to that procedure. The assessment shall include foreign financial contributions in the three years prior to the notification and known subsidies that have already been established and shall become effective following the procurement procedure.
Amendment 141 #
Proposal for a regulation
Recital 36 a (new)
Recital 36 a (new)
(36 a) The effectiveness of the threshold for the notification obligation for procurement should be reviewed one year after the entry into force of this Regulation.
Amendment 145 #
Proposal for a regulation
Recital 37 a (new)
Recital 37 a (new)
(37 a) Whereas this Regulation should cover all economic sectors of the internal market, the ex officio review could in particular take into account sectors that are of strategic interest to the Union, such as sectors related to national security or public order.
Amendment 146 #
Proposal for a regulation
Recital 37 b (new)
Recital 37 b (new)
(37 b) The Commission should be able to use information obtained from the market investigation for the relevant procedures under this Regulation, including the ex officio review.
Amendment 156 #
Proposal for a regulation
Recital 48
Recital 48
(48) In order to ensure a level playing field on the internal market also in the long term, with a view to ensuring adequate coverage of cases investigated both through notifications as well as ex officio, the Commission should review the functioning and effectiveness of this Regulation at the latest three years after its entry into force. The Commission should present its findings in a report to the European Parliament and the Council. The power to adopt acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of amending the notification thresholds for concentrations and for public procurement procedures, including the use of different thresholds for certain sectors, exempting certain categories of undertakings from the notification obligations under this Regulation, as well as amending the time limits for the preliminary review and the in-depth investigations of notified concentrations or notified financial contributions in the context of a public procurement procedure. In relation to financial contributions in the context of a public procurement procedure, the power to adopt such acts should be exercised in a way thatSuch acts should takes into account the interests of SMEs. It is of particular importance that the Commission carries out appropriate consultations during the preparations of those acts, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making47 . In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council should receive all documents at the same time as Member States' experts, and their experts systematically should have access to meetings of Commission expert groups dealing with the preparation of delegated acts. _________________ 47 Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission of 13 April 2016 on Better Law-Making (OJ L 123, 12.5.2016, p. 1).
Amendment 171 #
Proposal for a regulation
Article 2 – paragraph 2 – point a – introductory part
Article 2 – paragraph 2 – point a – introductory part
(a) a financial contribution shall include, inter alia:
Amendment 176 #
Proposal for a regulation
Article 2 – paragraph 2 – point a – point ii
Article 2 – paragraph 2 – point a – point ii
(ii) the foregoing of revenue that is otherwise due; or such as granting special or exclusive rights without adequate remuneration or tax exemptions;
Amendment 178 #
Proposal for a regulation
Article 2 – paragraph 2 – point a – point iii
Article 2 – paragraph 2 – point a – point iii
(iii) the provision of goods or services or the purchase of goods andor services;
Amendment 197 #
Proposal for a regulation
Article 3 – paragraph 1 – introductory part
Article 3 – paragraph 1 – introductory part
(1) A distortion on the internal market shall be deemed to exist where a foreign subsidy is liable to improve the competitive position of the undertaking concerned in the internal market and where, in doing so, it actually or potentially negatively affects competition on the internal market. Whether there is a distortion on the internal market shall be determined on the basis of indicators, which may include, inter alia, the following:
Amendment 201 #
Proposal for a regulation
Article 3 – paragraph 1 – point d
Article 3 – paragraph 1 – point d
(d) the level of economic activity of the undertaking concerned on the internal market, including of any subsidiaries of that undertaking on the internal market;
Amendment 203 #
Proposal for a regulation
Article 3 – paragraph 1 – point d a (new)
Article 3 – paragraph 1 – point d a (new)
(d a) the level of economic activity of that undertaking on its domestic market;
Amendment 207 #
Proposal for a regulation
Article 3 – paragraph 2
Article 3 – paragraph 2
(2) A foreign subsidy is unlikely to distort the internal market if its total amount is below EUR 5 million200.000 over any consecutive period of three fiscal years, and that undertaking is established in the internal market.
Amendment 214 #
Proposal for a regulation
Article 3 – paragraph 2 a (new)
Article 3 – paragraph 2 a (new)
(2 a) A foreign subsidy is unlikely to distort the internal market if its total amount is below EUR 5 million over any consecutive period of three fiscal years, and that undertaking is established in a third country.
Amendment 217 #
Proposal for a regulation
Article 3 – paragraph 2 b (new)
Article 3 – paragraph 2 b (new)
(2 b) The Commission shall make available guidelines on the application of this Article.
Amendment 222 #
(4 a) a foreign subsidy compensating for the operating costs of an undertaking, enabling that undertaking to offset its operating losses and provide goods and services at price levels that are not economically justifiable.
Amendment 227 #
Proposal for a regulation
Article 4 – paragraph 1 a (new)
Article 4 – paragraph 1 a (new)
the transfer of a foreign subsidy to a subsidiary of the undertaking established in the internal market;
Amendment 235 #
Proposal for a regulation
Article 5 – paragraph 1
Article 5 – paragraph 1
(1) The Commission shall, where warranted, balance the negative effects of a foreign subsidy in terms of distortion on the internal market with positive effects on the development of the relevant economic activity. The positive effects shall contribute to the achievement of the objectives of Union policies.
Amendment 245 #
Proposal for a regulation
Article 5 – paragraph 2 a (new)
Article 5 – paragraph 2 a (new)
(2 a) The Commission shall make available guidelines on the criteria that are used for the balancing between the negative and the positive effects of a foreign subsidy.
Amendment 257 #
Proposal for a regulation
Article 6 – paragraph 3 – introductory part
Article 6 – paragraph 3 – introductory part
(3) Commitments or redressive measures may consist, inter alia, of the following:
Amendment 259 #
Proposal for a regulation
Article 6 – paragraph 3 – point a
Article 6 – paragraph 3 – point a
(a) offering access under fair and non- discriminatory conditions to an infrastructure or facility that was acquired or supported by the distortive foreign subsidies unless such fair and non- discriminatory access is already provided for by legislation in force in the Union;
Amendment 263 #
Proposal for a regulation
Article 6 – paragraph 3 – point h a (new)
Article 6 – paragraph 3 – point h a (new)
(h a) exclusion from future procurement procedures;
Amendment 266 #
Proposal for a regulation
Article 6 – paragraph 5
Article 6 – paragraph 5
(5) If an undertaking offers commitments which fully and effectively remedy the distortion on the internal market, the Commission may accept them and make themthe Commission shall in that case make those commitments binding on the undertaking in a decision with commitments according to Article 9(3).
Amendment 272 #
Proposal for a regulation
Article 6 – paragraph 6
Article 6 – paragraph 6
(6) Where the undertaking concerned proposes to repay the foreign subsidy including an appropriate interest rate, the Commission shallcould accept such repayment as commitment if it can ascertain that the repayment is transparent and effectively remedies the distortion, while taking into account the risk of circumvention.
Amendment 284 #
Proposal for a regulation
Article 7 – paragraph 1
Article 7 – paragraph 1
The Commission may on its own initiative examine information from any source regarding alleged distortive foreign subsidies, including from Member States and interested parties such as undertakings and trade associations.
Amendment 331 #
Proposal for a regulation
Article 11 – paragraph 5 a (new)
Article 11 – paragraph 5 a (new)
(5 a) The Commission shall establish a contact point where Member States and interested parties such as undertakings and trade associations can share information with regard to actual or potential distortions of the internal market.
Amendment 345 #
Proposal for a regulation
Article 13 – paragraph 1
Article 13 – paragraph 1
In order to carry out the duties assigned to it by this Regulation, the Commission may conduct inspections in the territory of a third country, provided that the undertaking concerned has given its consent and the government of the third country has been officially notified and has agreed to the inspection. Article 12(1), (2), and (3) points (a) and (b) shall apply by analogy.
Amendment 357 #
Proposal for a regulation
Article 15 – paragraph 2
Article 15 – paragraph 2
(2) Fines imposed in the cases referred to in paragraph 1 shall not exceed 1 5% of the aggregate turnover of the undertaking or association of undertakings concerned in the preceding business year.
Amendment 359 #
Proposal for a regulation
Article 15 – paragraph 3
Article 15 – paragraph 3
(3) Periodic penalty payments imposed in the cases referred to in paragraph 1 shall not exceed 510% of the average daily aggregate turnover of the undertaking or association of undertakings concerned in the preceding business year for each working day of delay, calculated from the date established in the decision, until it submits complete and correct information as requested by the Commission.
Amendment 361 #
Proposal for a regulation
Article 15 – paragraph 5 – point b
Article 15 – paragraph 5 – point b
(b) periodic penalty payments not exceeding 510% of the average daily aggregate turnover of the undertaking concerned in the preceding business year for each day of non-compliance, starting from the day of the Commission decision imposing such penalty payments, until the Commission finds that the undertaking concerned complies with the decision.
Amendment 367 #
Proposal for a regulation
Article 17 – paragraph 1
Article 17 – paragraph 1
In a concentration, the assessment whether there is a distortion on the internal market within the meaning of Articles 3 or 4 shall be limited to the concentration at stake. Only foreign subsidies granted in the three calendar years prior to the conclusion of the agreement, the announcement of the public bid, or the acquisition of a controlling interest, or known subsidies that have already been established and shall become effective following the concentration, shall be considered in the assessment.
Amendment 388 #
Proposal for a regulation
Article 19 – paragraph 4
Article 19 – paragraph 4
(4) If the undertakings concerned fail to meet their obligation to notify, the Commission mayshall review a notifiable concentration in accordance with this Regulation by requesting the notification of that concentration. In that case the Commission shall not be bound by the time limits referred to in Article 23(1) and (4).
Amendment 394 #
Proposal for a regulation
Article 19 – paragraph 5
Article 19 – paragraph 5
(5) The Commission may request the prior notification of any concentration which is not a notifiable concentration within the meaning of Article 18 at any time prior to its implementation where the Commission suspects that the undertakings concerned may have benefitted from foreign subsidies in the three years prior to the concentration or may benefit from known subsidies that have already been established and shall become effective following the concentration. That concentration shall be deemed to be a notifiable concentration for the purposes of this Regulation.
Amendment 416 #
Proposal for a regulation
Article 26 – paragraph 1
Article 26 – paragraph 1
Foreign subsidies that cause or risk causing a distortion in a public procurement procedure shall be understood as foreign subsidies that enable an undertaking to submit a tender that is unduly advantageous in relation to the works, supplies or services concerned. The assessment of whether there is a distortion on the internal market pursuant to Article 3 and whether a tender is unduly advantageous in relation to the works, supplies or services concerned shall be limited to the public procurement procedure at stake. Only foreign subsidies granted during the three years prior to the notification or known subsidies that have already been established and shall become effective following the procurement procedure shall be taken into account in the assessment.
Amendment 422 #
Proposal for a regulation
Article 27 – paragraph 2
Article 27 – paragraph 2
(2) For the purpose of Article 28, a notifiable foreign financial contribution in an EU public procurement procedure shall be deemed to arise where the estimated value of that public procurement is equal or greater than EUR 250 million150 million for goods and services and EUR 250 million for public works.
Amendment 435 #
Proposal for a regulation
Article 28 – paragraph 2
Article 28 – paragraph 2
(2) The obligation to notify foreign financial contributions under this paragraph shall extend to economic operators, groups of economic operators referred to in Article 26(2) of Directive 2014/23/EU, Article 19(2) of Directive 2014/24/EU and Article 37(2) of Directive 2014/25/EU, main subcontractors and main suppliers. A subcontractor or supplier shall be deemed to be main where their participation ensures key elements of the contract performance and in any case where the economic share of their contribution exceeds 3015% of the estimated value of the contract.
Amendment 444 #
Proposal for a regulation
Article 28 – paragraph 6
Article 28 – paragraph 6
(6) Where the Commission suspects that an undertaking may have benefitted from foreign subsidies in the three years prior to the submission of the tender or request to participate in the public procurement procedure or may benefit from known subsidies that have already been established and shall become effective following the procurement procedure, it may request the notification of the foreign financial contributions received by that undertaking in any public procurement procedure which are not notifiable under Article 27(2) or fall within the scope of paragraph 5 of this Article, at any time before the award of the contract. Once the Commission has requested the notification of such a financial contribution, it is deemed to be a notifiable foreign financial contribution in a public procurement procedure.
Amendment 452 #
Proposal for a regulation
Article 29 – paragraph 2
Article 29 – paragraph 2
(2) The Commission shall carry out a preliminary review no later than 630 days after it received the notification.
Amendment 458 #
Proposal for a regulation
Article 29 – paragraph 4
Article 29 – paragraph 4
(4) The Commission may adopt a decision closing the in-depth investigation no later than 2100 days after it received the notification. In exceptional circumstances, this time limit may be extended after consultation with the concerned contracting authority or contracting entity.
Amendment 490 #
Proposal for a regulation
Article 34 – paragraph 3
Article 34 – paragraph 3
(3) The Commission may use the information obtained from such market investigations in the framework of procedures under this Regulation, including the ex officio review.
Amendment 503 #
Proposal for a regulation
Article 40 – paragraph 7
Article 40 – paragraph 7
(7) An investigation pursuant to this Regulation shall not be carried out and measures shall not be imposed or maintained where such investigation or measures would be contrary to the Union’s obligations emanating from any relevant international agreement it has entered into. In particular, no action shall be taken under this Regulation which would amount to a specific action against a subsidy within the meaning of Article 32.1 of the Agreement on Subsidies and Countervailing Measures except where the country granting the subsidy is not a WTO member or where the Commission has well-founded indications that the country granting the subsidy is in substantial non-compliance with notification obligations under the Agreement or under other international agreements. Provided that, regardless of the sector involved, actions may always be taken under this Regulation in relation to foreign subsidies which cause distortions on the internal market in public procurement procedures or in relation to concentrations. This Regulation shall not prevent the Union from exercising its rights or fulfilling its obligations under international agreements.
Amendment 520 #
Proposal for a regulation
Article 46 – paragraph 1
Article 46 – paragraph 1
Within fivthree years after the entry into force of this Regulation at the latest, the Commission shall present a report to the European Parliament and the Council on the application of this Regulation, accompanied, where the Commission considers it appropriate, by relevant legislative proposals. The relevant thresholds for the concentration and procurement procedures shall also be subject to a review one year after entry into force of this Regulation.