The White & Case Foreign Subsidies Regulation Quarterly (FSRQ) is an information and discussion resource regarding the EU Foreign Subsidies Regulation. FSRQ provides updates on recent enforcement activity and trends.
Below is a selection of recent developments in Q1 2026 and the key FSR statistics for M&A deals.
- FSR Guidelines
- Summary notices published for ex officio investigations
- Summary of FSR Public Consultation Responses
- Publication of ADNOC/Covestro decision
- Hearing of challenge to FSR dawn raid
- Key statistics – M&A deals
FSR Guidelines
On 9 January 2026, the European Commission published its Guidelines on the application of the EU Foreign Subsidies Regulation ("FSR") (the "Guidelines"), setting out how the EC will carry out its substantive assessment under the FSR.
The Guidelines clarify the EC's framework for assessing:
- distortion to the EU internal market;
- the balancing test (weighing negative against positive effects); and
- the EC call-in powers for below-threshold M&A transactions and EU public tenders.
See here for our analysis of the main implications with the key takeaways for businesses. The message is clear: FSR risk assessment remains complex, evidence-driven, and highly case-specific, making early planning critical for businesses active in EU M&A and public tenders.
On 20 March 2026, the European Commission published a FSR brief summarising the Guidelines (except for the parts concerning public procurement).
Summary notices published for ex officio investigations
In February 2026, the European Commission published summary notices setting out the bases for opening its only two in-depth ex officio investigations to date: Nuctech and Goldwind. Both investigations follow lengthy preliminary reviews (in which there is no prescribed time limit under the FSR) of 18 and 19 months, respectively.
In each case, the summary notices identify the same three categories of foreign subsidies considered potentially distortive: grants, preferential tax measures, and preferential financing. While brief, the summary notices reflect a broad approach to the concept of distortive foreign subsidy and to the assessment of whether foreign subsidies improve a beneficiary’s competitive position and are liable to distort competition in the EU. The Nuctech Summary Notice notes that foreign subsidies may have contributed to Nuctech’s high rates of patent applications, which may have contributed to its market penetration.
Summary of FSR Public Consultation Responses
On 20 February 2026, the European Commission published the results of its public consultation on the review of the FSR, as required under Article 52(2) FSR, which mandates a review of the European Commission's implementing and enforcement practice by 13 July 2026 and every three years thereafter. A total of 54 responses were received from industry, government, and consulting firms across the European Union and third countries.
Concerns raised include the following.
Determination of distortion and balancing test
- More than half of respondents consider the framework for determining distortions in the EU internal market under Article 4 FSR to be too vague and too broadly drafted. Greater clarity is needed on how the European Commission in practice weighs different indicators and what evidentiary rules apply.
- The criteria in Article 5 for identifying categories of foreign subsidies “most likely” to distort the internal market are insufficiently clear and not appropriate, such as the concept of foreign subsidies directly facilitating concentrations or enabling the submission of unduly advantageous tenders.
- The balancing test under Article 6 FSR is criticised for being non-transparent. It is noted that the European Commission is granted a considerable margin of discretion and that standards of proof applied to positive and negative effects should be consistent, including as regards the respective burden to substantiate those effects.
M&A Notification Regime
- Notification thresholds for M&A transactions are viewed as too low, capturing numerous unproblematic transactions.
- The obligation to report all "foreign financial contributions" is seen as particularly burdensome and disproportionate.
- The concept of "foreign financial contributions" is considered overly broad, covering ordinary commercial transactions with no apparent link to a potential distortion of the EU internal market.
- Compiling the relevant data across complex international corporate structures is practically challenging.
- The overlap of FSR filings with merger control and/or foreign direct investment screening filings generate additional administrative burden, uncertainty and delays.
- Requests for information sent by the European Commission can be excessive and unnecessary for the assessment of transactions.
Public Procurement Notification Regime
- Stakeholders report considerable delays in public procurement procedures as a result of the FSR notification requirements.
- There is a lack of transparency regarding (i) the outcomes of concluded investigations and (ii) ongoing proceedings with limited visibility on the progress of an investigation.
- The regime has led to significant additional costs for participants.
- The scope of the notification obligation in public procurement procedures is unclear with ambiguous key definitions and inconsistent application across EU Member States and tenders.
- In some cases, there has been a decline in participation by both EU and non-EU bidders.
Looking ahead, the consultation results will feed into the European Commission's official review report, which must be presented in July 2026. Where the European Commission considers that more fundamental revisions are necessary — such as raising the notification thresholds — it would be required to accompany the report with a formal legislative proposal to amend the FSR, subject to approval by the European Parliament and the Council.
Publication of ADNOC/Covestro decision
In February 2026, the European Commission published the non-confidential version of its decision to clear subject to commitments Abu Dhabi National Oil Company (ADNOC)'s acquisition of German chemical giant, Covestro. As we reported in the last edition of the FSRQ, this marks the second in-depth FSR review of a merger transaction —after the conditional clearance of e& / PPF in 2024 — both involving UAE-State linked buyers.
Hearing of challenge to FSR dawn raid
The hearing in Nuctech’s challenge of the European Commission's dawn raids of its Dutch and Polish premises in 2024 is scheduled to take place before the EU General Court on 14 April (Case T-284/24). These were the first dawn raids launched under the FSR. One ground of the challenge is that the European Commission demanded information from a Nuctech entity located outside the EU, which would have required Nuctech to produce material in violation of Chinese law.
Nuctech's application for interim measures, which sought to suspend the investigation pending the outcome of the main proceedings, was unsuccessful.
Key statistics – M&A deals
All statistics are updated as of 23 March 2026.
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