Answer given by Executive Vice-President Vestager on behalf of the European Commission
23.3.2023
Under the Foreign Subsidies Regulation[1], the Commission will be able to investigate financial contributions granted by non-EU countries to companies engaging in an economic activity in the EU.
If the Commission finds that such financial contributions constitute foreign subsidies that distort the internal market, it can impose redressive measures or accept commitments to remedy their distortive effects, or prohibit a concentration or the award of a public procurement contract.
Financial contributions pursuant to the United States (US) Inflation Reduction Act, granted primarily in the form of tax credits, are expected to be granted to companies engaging in an economic activity in the US. The application of the Foreign Subsidies Regulation will therefore need to be assessed on a case-by-case basis.
In addition, it is recalled that subsidies to the manufacture, production or export of goods granted by non-EU countries fall within the scope of the Agreement on Subsidies and Countervailing Measures (ASCM).
Under the EU’s anti-subsidy Regulation[2] implementing the ASCM rules, where an EU industry is harmed by imports of a product that are subsidised coming from a non-EU country, the Commission may impose countervailing measures if it is in the Union interest to do so. In addition, it is also possible to launch a dispute settlement procedure at the World Trade Organisation.