The activities of State-Owned construction Enterprises (SOE) from Third Countries in and around the EU have reached new dimensions, for example with the “Belt and Road Initiative” (BRI) and the budgets involved. Recent examples of public works contracts awarded to consortia led by SOEs (e.g. in Croatia and Sweden) for prices that seem to be abnormally low from the perspective of a private company show the need for a comprehensive EU strategy in favour of a level playing field and fair competition.
To address this issue, FIEC has joined forces with the European International Contractors (EIC) and the European Dredging Association (EuDA). Dealing with internal market issues, FIEC’s main objective is to prevent unfair competition and ensuring a level playing field on the internal market while our partners are also addressing external challenges.
Regulation on Foreign Subsidies
For several years, FIEC called for a solution to the problem of subsidised companies in procurement procedures. For instance, FIEC asked for a State Aid Test to be conducted when such companies want to participate in tendering procedures.
In May 2021, the European Commission presented its proposal for a Regulation on Distortive Foreign Subsidies aimed at tackling the distortive effects of foreign subsidies in the Single Market. The Regulation, adopted in December 2022, is intended to fill a legislative gap as, up until recently, there was no EU instrument to control subsidies granted by third countries.
Due to the increasing presence of Third Countries companies in Europe in recent years, it is important to look at the possibilities for action the Regulation offers that could potentially help restore a level playing field in the Single Market. As such, efforts are now focused on providing the European Commission with information substantiating a reasonable suspicion of foreign subsidies in certain public procurement projects, therefore justifying a market investigation.
