State Aid and Foreign Subsidies

Capabilities

State aid law is increasingly critical for businesses in the European Union (EU). State support can secure the operations of companies in times of crisis or in the energy transition. In imperfect or distorted markets, State aid discipline may level the playing field amongst companies. Even companies with no previous exposure to State aid issues are now affected by the rules. In this rapidly evolving legal and political environment, State aid processes may have substantial financial, political, and legal consequences that require insightful advice and effective strategies. With Brexit, the UK has adopted a comparable instrument to deal with UK public spending to the benefit of companies. Additionally, companies that receive financial contributions from countries outside the EU may be subject to specific EU regulations, such as the Foreign Subsidy Regulation, that may impact transaction strategies and investments in Europe.

Covington’s dedicated State aid team is amongst the most experienced in Europe and has the cutting-edge expertise at the intersection of competition law and policy that is necessary to assist companies and governments with their State aid and foreign subsidies matters, helping them to achieve their business goals. When advising clients on the UK’s subsidy control regime, Covington’s team works with UK qualified lawyers based in London.

Covington’s State aid practice advises clients across multiple areas, including:

• Network industries (Energy, Telecommunications, Transportation)
• Financial services
• Healthcare
• Technology

Our team of lawyers and advisors, which includes a former head of DG COMP’s financial task force responsible for State aid, combines a unique expertise to help our clients harness the benefits of State aid while complying with the necessary rules. And because our team has been involved in most of the major State aid cases in the EU and has successfully helped governments, competitors, beneficiaries of State aid and their investors, we understand our clients’ objectives and can advise them on how best to achieve them. We provide advice on the State aid aspects of new projects, advice to secure aid approvals quickly in crisis situations, as well as assistance in State aid investigations before the European Commission and related litigation before the EU and national courts, including national recovery proceedings.

Our significant State aid experience also enables us to advise companies on the UK Subsidy Control regime and EU Foreign Subsidies Regulation. Our team has extensively contributed to discussions with the European Commission on the new EU Foreign Subsidies Regime, including with respect to the complexities it may raise for companies based outside the EU. We have a unique and unmatched, in-depth knowledge of State aid processes enabling us to leverage this expertise to help companies not only comply with the EU Foreign Subsidies Regulation, but also assess its impact on their transaction strategies in Europe, in tandem with other foreign investment issues such as the Foreign Direct Investment Regulation (FDI).