Protecting the Internal Market from Subsidisation with the EU State Aid Regime and the Foreign Subsidies Regulation : Two Sides of the Same Coin?

In recent years, the issue of subsidisation of companies active on the EU internal market by third states and the corresponding distortions have gained novel prominence. An imbalance becomes pertinent. Third country subsidies granted to undertakings active on the EU internal market would constitute Staid aid if granted by an EU Member State. Yet, State aid rules do not apply to such financial contributions granted by third states. Therefore, foreign subsidies could create an uneven playing field on the internal market: the undertakings receiving support from EU states are subject to EU State aid discipline, while companies receiving third country subsidies are not subject to comparable state aid systems. Thus, the latter are having a noticeable advantage over EU companies in economic activity on the EU internal market.What the EU economic law system lacks to avoid the named distortions through third-country subsidies is a third-country State aid instrument. The Commission sees the new Foreign Subsidies Regulation (FSR) as an instrument to achieve equality of opportunity with State aid law and often refers to comparisons and concepts under State aid law in recitals of the FSR and other accompanying documents. It wants to ensure a State-aid-akin protection vis-à-vis third states and even aims at exporting the EU State aid regime. Particularly, to counter any discrimination concerns under the WTO rules, the Commission wants to ensure that new rules on foreign subsidies are based on principles similar to EU State aid rules. Furthermore, a transfer of the respective concepts would also make sense from a practical point of view, as EU State aid law has been protecting against distortions in the EU internal market caused by subsidies from member states for over 50 years. The paper focuses on these proclaimed interrelations between EU state aid law and the FSR and tries to answer the question if the FSR constitutes a third-country State aid instrument. First, I will explain the role of State aid law in the EU internal market and consequently, the external dimension and the role that the FSR regime could play for guaranteeing a level playing field on the internal market. Second, I will show when and where and also where the FSR does not build on the EU state aid regime from a substantive and procedural standpoint and what does this imply for the FSR