BRUSSELS: A Chinese business chamber on Tuesday voiced its strong opposition to a European Commission decision to exclude a Chinese company from a public procurement project in Portugal, following a review under the bloc’s Foreign Subsidies Regulation (FSR).
The China Chamber of Commerce to the European Union (CCCEU) said the Commission’s decision on the Lisbon Metro project required the replacement of a Chinese subcontractor in a bidding consortium on the grounds of an alleged distortive foreign subsidy.
The CCCEU said the Chinese company has participated only as a subcontractor, and that its contract value accounts for less than 10 percent of the overall project value, well below the level generally considered indicative of material influence in subcontracting arrangements.
Against this background, the chamber questioned the basis on which the subcontractor is classified as “critical”, and the justification for the corrective measures imposed.
The chamber also criticized the way the investigation is conducted, saying the company is repeatedly given only two to three days to provide extensive and complex information and supporting documents.
Such tight deadline fails to take into account the practical difficulties of cross-border evidence collection and compliance across multiple jurisdictions, thereby undermining the company’s rights to defense and due process, the chamber said.
According to the CCCEU, the requirement to replace the subcontractor directly affects the existing contractual structure and bidding arrangements of the project, interfering with normal commercial decision-making and significantly increasing uncertainty and compliance costs.
The chamber said that in its current application the FSR gives the European Commission excessive discretion in subsidy assessment, impact evaluation, and choice of remedial measures.
Such practices may in effect restrict the participation of Chinese enterprises in EU public procurement, mergers and acquisitions, and other normal business activities, the chamber said.
The CCCEU urged the EU to correct relevant practices and ensure that implementation of the FSR strictly follows the principles of proportionality, non-discrimination, due process, and regulatory transparency. It also called on the EU to avoid unnecessary interference in normal market operations and to safeguard an open, transparent, and rules-based business environment.
