The EU Commission recently conducted a raid on an unnamed Chinese company under the Foreign Subsidies Regulation, marking the first time this regulation has been utilized. This investigation was initiated by the EU executive rather than being prompted by a complaint. The Foreign Subsidies Regulation has been in effect since July 2023 and is designed to ensure fair competition among companies operating within the single market. The raid was carried out in two member states in conjunction with national authorities, but specifics regarding the company and its location have not been disclosed.
The China Chamber of Commerce to the EU has voiced serious concerns over these raids, referring to them as ‘dawn raids’. The CCCEU was not given prior notice of the unannounced inspections on the premises of a Chinese company in the Netherlands and Poland. The enforcement agencies reportedly seized IT equipment, mobile phones, scrutinized office documents, and requested access to relevant data during the raids. The CCCEU believes that these actions send a negative message to all non-EU companies operating within the bloc and is urging the European side to protect the rights and interests of foreign companies in the EU.
Multiple investigations have been opened by the EU Commission into Chinese companies under the Foreign Subsidies Regulation. In a separate development, the EU executive has initiated a probe into China’s public procurement of medical devices. The Foreign Subsidies Regulation allows the EU Commission to launch in-depth investigations if there is sufficient evidence of potential market distortions caused by foreign subsidies. The CCCEU’s statement emphasizes the importance of protecting the rights and interests of foreign companies within the EU and is calling for a fair and transparent process.
The European Commission’s use of new powers under the Foreign Subsidies Regulation has raised concerns among Chinese companies operating in the EU. These companies fear that the enforcement actions could have negative implications for their operations and investments within the bloc. The CCCEU’s statement reflects a broader sentiment among Chinese businesses that they are being unfairly targeted by EU authorities. The lack of transparency surrounding the raids and investigations further adds to the uncertainty facing Chinese companies in the EU.
The EU Commission’s decision to carry out raids on Chinese companies without prior notice has sparked backlash from the CCCEU and other Chinese business organizations. The chamber has called on the European side to ensure that foreign companies are treated fairly and in accordance with established regulations and protocols. The ongoing investigations into Chinese companies under the Foreign Subsidies Regulation highlight the challenges faced by non-EU companies in navigating the regulatory landscape of the European market. The need for clear guidelines and open communication between EU authorities and foreign businesses is crucial to fostering a conducive and transparent business environment.
Moving forward, it will be essential for the EU Commission to strike a balance between enforcing regulations and promoting a welcoming environment for foreign companies within the single market. The concerns raised by the CCCEU underscore the importance of fair treatment and due process for all companies operating in the EU, regardless of their origin. Addressing these issues will require effective communication, engagement, and collaboration between EU authorities and foreign business entities. By working together to establish clear guidelines and protocols, both sides can ensure a level playing field and foster mutual trust and cooperation in the business community.
