EU raids Chinese security equipment firm over foreign subsidies concerns

During the raids, the European Union officials reportedly accessed the company's ICT system, instilling apprehension among Chinese businesses operating in Europe

Dutch and Polish offices of a Chinese firm, involved in manufacturing surveillance equipment, have been raided by the European Commission over suspicion of receiving foreign subsidies aimed at distorting the internal market.

During the raid, the EU officials reportedly accessed the company’s ICT system and employees’ phones, a dramatic measure that has instilled apprehension among Chinese businesses operating in Europe.

According to reports, the European Commission issued a statement confirming the unannounced inspections at the facilities of a company involved in security equipment production and sales within the EU. However, it refrained from disclosing the company’s name, nationality, or specific sector involvement.

The statement said that the Commission had indications suggesting that the inspected company might have received foreign subsidies capable of distorting the internal market, as per the foreign subsidies regulation.

Additionally, the inspections were conducted in coordination with national competition authorities from the member states where the operations took place.

The statement emphasised that such unannounced inspections serve as a preliminary investigative measure into suspected distortive foreign subsidies, with an in-depth investigation slated as the subsequent step.

The China Chamber of Commerce to the EU alleged that authorities confiscated the company’s IT equipment and employees’ mobile devices, scrutinised office documents, and demanded access to relevant data during the operation.

Earlier this month, China accused the European Union of protectionism and reckless distortion of the definition of subsidies in response to a new EU investigation into Chinese wind turbine makers.

A Chinese trade remedies official made solemn representations on the issue in a meeting in Brussels with Martin Lukas, the EU director general for trade defence, the Commerce Ministry said.

The investigation opened by the European Union on Tuesday is the latest against Chinese companies announced in the past two months under a new EU regulation.

It will look into whether Chinese subsidies are giving wind turbine companies an unfair advantage in the competition for projects in five member countries: Spain, Greece, France, Romania and Bulgaria.