Industrial Policy & Trade Monitor· 2663 actions· ✨ 89 recent

On 21 April 2026 the European Commission issued a conditional clearance under the EU Foreign Subsidies Regulation (FSR, Regulation 2022/2560), requiring the exclusion of CRRC (China's largest rolling-stock manufacturer) from the Lisbon Metro Violet Line procurement — the first-ever FSR procurement remedy ordering a Chinese supplier exclusion from a specific EU public contract. The Commission found that CRRC received foreign subsidies enabling it to submit an unduly advantageous tender, and as a condition of clearance mandated CRRC's removal from the tender. CRRC was replaced by PESA (Polish rail manufacturer) as the selected bidder. Unlike the 2024 Bulgaria/CRRC case (FSP.100147) where CRRC voluntarily withdrew before a formal decision, the Lisbon case produced the first binding FSR exclusion remedy, establishing mandatory supplier-removal as an available enforcement outcome in EU public procurement.

The European Commission adopted Communication C(2026) 43 final on 9 January 2026, issuing the first formal interpretive guidelines on the Foreign Subsidies Regulation (FSR, Regulation (EU) 2022/2560). The guidelines codify a four-pillar analytical framework — distortion assessment, public-procurement distortion test, balancing test, and ex officio call-in scope — that DG COMP will apply in every future FSR enforcement proceeding. As the operational blueprint for the FSR regime, the guidelines materially shape Chinese SOE and Gulf SWF EU-market access planning for concentrations, public-procurement tenders, and sub-threshold transactions.

China's Ministry of Commerce issued Announcement 2025 No. 3 on 9 January 2025, the Final Determination of its Trade and Investment Barrier (TIB) investigation into the European Commission's enforcement practices under the EU Foreign Subsidies Regulation (FSR). MOFCOM concluded that EC practices in FSR investigations targeting Chinese enterprises in rail transport, photovoltaics, wind energy, and security-equipment public procurement constitute trade and investment barriers under Article 3 of China's Rules on Trade and Investment Barrier Investigations (对外贸易壁垒调查规则). The determination documents €20.88 billion in estimated economic losses — including €10.18 billion from abandoned bids — and finds de-facto discrimination against Chinese SOEs relative to investors from other jurisdictions. MOFCOM committed to taking "necessary measures" including bilateral consultations, multilateral dispute settlement, or "other appropriate measures" to safeguard Chinese enterprises' legitimate rights and interests.

On 16 February 2024 the European Commission opened case FSP.100147, the first-ever in-depth Phase II investigation under the EU Foreign Subsidies Regulation (FSR, Regulation 2022/2560), to examine whether Chinese state-owned CRRC Qingdao Sifang Locomotive Co. Ltd. received foreign subsidies enabling it to submit an unduly advantageous tender for a EUR 614 million Bulgarian Ministry of Transport contract covering 20 zero-emission electric push-pull trains and 15 years of maintenance. The Commission identified approximately EUR 1.745 billion in total foreign financial contributions to CRRC — roughly five times the bid value. CRRC withdrew its tender on 26 March 2024 before the Commission could issue a final decision; the Commission closed the investigation following the withdrawal.

The Bureau of Industry and Security (BIS) removed 35 persons from the Unverified List (UVL) effective 22 August 2023, spanning seven destinations: 27 entities in China, plus one each in Indonesia, Singapore, Turkey, and UAE; two in Pakistan; and two Russian entities removed as a conforming change after being escalated to the more restrictive Entity List. The 33 cooperative removals follow successful completion of end-use checks verifying each party's bona fides under §744.15(c)(2) of the EAR. Removal restores eligibility for EAR license exceptions and eliminates the UVL Statement requirement for US exporters shipping EAR-subject items to these parties.

Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market — the EU Foreign Subsidies Regulation (FSR) — entered into force on 12 July 2023, with notification obligations becoming applicable from 12 October 2023. The FSR gives the European Commission powers to investigate financial contributions granted by non-EU governments to companies active in the EU, and to impose remedies (commitments, redressive measures, prohibitions) where such subsidies are found to distort competition. Three review tools: (i) notifiable concentrations (M&A above €500m EU turnover + €50m foreign financial contributions); (ii) notifiable public procurement bids (€250m+ contract value + €4m foreign contributions); (iii) ex-officio investigations of any other market situation. Although neutral on its face, the regime has been used predominantly against Chinese-state-backed bidders + investors.