Foreign Subsidies Regulation: Norwegian state aid may trigger filing of joint ventures and M&A transactions

In guidance published on 6 June 2023, the European Commission has taken the position that financial contributions granted by Norway will be counted as “foreign” contributions under the Foreign Subsidies Regulation.

The Foreign Subsidies Regulation (FSR) entered into force on 12 January 2023 and will apply from 12 July 2023.

The regulation introduces a new filing obligation for joint ventures and M&A transactions in which the relevant party or parties (i) meet a turnover threshold of at least EUR 500 million in the EU and (ii) have received financial contributions from non-EU countries of at least EUR 50 million in aggregate over the last three years.

Based on the Commission’s position, Norwegian state aid received by a party to a joint venture or M&A transaction will be included in the calculation of foreign subsidies for the purpose of the filing obligation set out in the FSR.

Companies involved in transactions where the EU turnover threshold of EUR 500 million is met, are advised to consider the potential filing obligation very carefully. Fines for failure to notify can be significant. The Commission can impose fines up to 10 % of the company’s annual aggregated turnover if a foreign financial contribution is not notified as required.

As a result, companies who may be involved in joint ventures or M&A transactions that may trigger the EUR 500 million EU turnover threshold should already now start collecting data on possible financial contributions received during the latest three years. This should include state aid received in Norway.

Read more