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Commission carries out first raid under foreign subsidies regulation

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The EU Executive has used new powers for the first time against an unnamed security equipment company.

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The European Commission on Tuesday carried out unannounced inspections at a Chinese company in the security equipment sector, the first to be done under the Foreign Subsidies Regulation.

The new rules, which applied since July 2023, aim to tackle distortions caused by foreign subsidies and ensure a level playing field for all companies operating in the EU market.

So far, the Commission has opened several investigations under the regulation, including into Chinese solar panel manufacturers and wind turbine producers, but this is the first time it has acknowledged raiding premises.

“The Commission has indications that the inspected company may have received foreign subsidies that could distort the internal market under the Foreign Subsidies Regulation,” the EU institution said in a statement.

Commission officials, together with their national counterparts, have raided the company’s premises in various member states, but as the investigation is at a preliminary stage, they are not naming the company, or the countries involved.

At this stage, it is not possible to say if this raid is a result of a complaint, and the EU executive has the power to instigate probes of its own volition too.

And there is no fixed deadline for gathering evidence and information to assess whether the company has received distorting foreign subsidies.

If sufficient evidence is discovered, the Commission will open an in-depth investigation, and then, the company’s name could be revealed. 

“The fact that the Commission carries out such inspections does not mean that the company in question has indeed received distortive foreign subsidies, nor does it prejudge the outcome of the investigation,” the statement said.

_This article has been updated to reflect that the target of the raid was a Chinese company
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