Proposed EU legislation targeting state-backed foreign buyers of European companies, sparked by fears of a burst of Chinese shopping, could be unenforceable in practice, the US Chamber of Commerce and Indian and Japanese business equality groups said on Wednesday.
The concerns expressed by the groups come as European governments and EU parliamentarians meet this month to discuss and possibly adopt the European Commission’s proposal announced last year, which targets subsidies that are detrimental to competition.
The proposal also covers tenders in public tenders to prevent the use of foreign subsidies to increase market share or to outbid European rivals in order to gain access to strategically important markets or critical infrastructure.
“(The proposal) is a significant administrative burden for both EU and non-EU businesses by introducing extensive notification requirements and long investigation periods,” the US Chamber of Commerce told the EU in a statement.
Other signatories to the letter are the Europe India Chamber of Commerce, the Australian European Business Council, the Japanese Business Council in Europe, the Korean Business Association in Europe and the Swiss-American Chamber of Commerce.
“A number of concepts introduced may even create practical impossibilities for those companies wishing to act in accordance with the regulation, and non-compliance could lead to the imposition of substantial sanctions,” the group said.
They requested a narrower scope for foreign subsidies, for example, the supply or purchase of goods or services in a competitive, non-discriminatory and unconditional tender should be excluded from the calculation.
The legislation should set a minimum financial contribution threshold so that subsidies used to pay public authorities for water, electricity or employee health insurance are not included, the group said.
To avoid violating World Trade Organization rules, the EU should also consider whether the foreign subsidy pursues a foreign target, such as job growth, innovation, climate change, sustainable development, the supply chain. resilient, they said.
(Reports by Foo Yun Chee; edited by Tomasz Janowski)
Photo: EU European flags in front of the Berlaymont building, European Commission headquarters in Brussels.
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