FSR Q&A update: practical issues and key strategies after the Commission’s Lisbon metro decision

7 May 2026

The Foreign Subsidies Regulation (FSR) has rapidly evolved from “something to keep an eye on” into a framework capable of delaying, shaping or blocking transactions and public procurement procedures. Through unannounced inspections (see our earlier article) and in-depth investigations, including into a Portuguese train tender, the European wind-turbine supply chain and acquisitions by Emirati state-backed companies, the European Commission (“Commission“) has demonstrated its willingness to actively enforce the FSR. In January, the Commission published its long-awaited Guidelines, which clarify key concepts including the assessment of distortions, the balancing of positive and negative effects, and the exercise of “call-in” powers.

Most recently, on 21 April 2026, the Commission adopted its first-ever final decision with conditions in the context of a public procurement investigation under the FSR. The decision concerns the tender for the new Lisbon “Violet” metro line, in which a consortium led by Mota-Engil had partnered with Portugal CRRC as a subcontractor. Following an in-depth investigation opened on 5 November 2025, the Commission confirmed that CRRC had received foreign subsidies enabling the consortium to submit an unduly advantageous tender, thereby distorting competition. This is the second time a CRRC entity has come under FSR scrutiny in the rail sector: in March 2024, CRRC Qingdao Sifang withdrew its bid from a EUR 610 million Bulgarian train tender after the Commission opened an in-depth investigation under the FSR. In the Lisbon case, rather than withdrawing, the consortium offered commitments to replace CRRC with a Polish rolling stock manufacturer that had not received distortive foreign subsidies, and the Commission accepted those commitments as sufficient to remove the distortion. The message is clear: the Commission is now prepared to intervene decisively in procurement where foreign subsidies risk undermining a level playing field.

In light of these developments, we have updated and refined our comprehensive FSR Q&A. The Q&A addresses the core concepts of the FSR, together with thresholds, notification routes, timelines, Commission investigative powers and key strategic considerations for companies engaged in transactions and procurement procedures. We also draw renewed attention to our notification tracker: a quick, practical tool for assessing at an early stage whether a notification may be required.

Download FSR Q&A

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