The European Union (EU) has launched an investigation into whether a subsidiary of Chinese state-owned train manufacturer CRRC Corp. has benefitted from subsidies while bidding for a contract in Bulgaria. This investigation marks the first use of the EU’s new foreign-subsidy rules.
The probe focuses on a public procurement procedure initiated by Bulgaria’s Ministry of Transport and Communications. The contract pertains to the provision of electric trains, maintenance, and training. CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC, was the subject of a notification regarding this investigation.
An initial review conducted by the European Commission revealed “sufficient indications” that this subsidiary has been granted a foreign subsidy that distorts the internal market. Consequently, the commission has initiated an in-depth investigation, which is the first-ever conducted under the Foreign Subsidies Regulation that came into effect in July last year. This regulation empowers the commission to scrutinize whether companies gain unfair advantages in the EU through foreign subsidies.
The final decision on this matter will be reached by July 2.