Insights

On 26 February 2025, the Commission proposed a sustainability simplifications package, commonly referred to as the Omnibus package. Among the sustainability reporting and due diligence provisions, the Omnibus package would also bring about changes to the EU’s unilateral environmental measure, the carbon border adjustment mechanism (CBAM). CBAM entered into application in its transitional phase in October 2023 and is now halfway towards its definitive implementation. The proposed deregulation brings about improvements in several CBAM areas, including scope, and reporting and procedural requirements. In this alert, we outline those suggested amendments that are likely to be of most importance to businesses involved in trading in CBAM goods.

As they have on each previous anniversary, the EU and UK released new sanctions against Russia on February 24, 2025, to mark the three-year anniversary of Russia’s full-scale invasion of Ukraine. For the first time, the United States did not do the same, electing to issue a limited set of Iran-related sanctions on the anniversary instead. The EU package was more fulsome than the UK package, including new port and airport restrictions, additional trade restrictions (including an aluminium ban), enhanced military end-user restrictions, and additional asset freezes and vessel designations.

Since Donald Trump’s election to a second term as President of the United States, the possibility of U.S. trade measures against the European Union became more tangible. The new administration is reportedly considering imposing sanctions on certain EU Member States and imposing additional tariffs on EU exports to the U.S.

Just over a year ago, the notification obligations under the EU Foreign Subsidies Regulation (FSR) became applicable. Since then, M&A transactions and bids for government contracts above certain thresholds must be notified to the European Commission. Pending the Commission’s review, the transaction cannot be completed, or the contract cannot be awarded. What lessons can be learned from the application of the FSR to date? Has the FSR proved to be an effective tool in leveling the playing field, or has its main effect been to burden companies with red tape, at the risk of discouraging investment in Europe?

In response to the ongoing conflict in Ukraine and to exert further pressure on Russia, the EU enacted its 14thsanctions package against Russia on June 24, 2024. The new package comes after months of negotiations between Member States, and follow, but in many ways expand upon, those passed by the United States and the UK last week (see Crowell’s Alert on those developments here). 

EU member states must transpose the directive into national law within two years of its entry into force.  Compliance with the Directive will be introduced in stages, as follows:

At the beginning of the year, we brought to your attention that a number of important Belgian and EU legislative changes are likely to have an impact in 2024: there are new laws that have been adopted and proposals that are expected to firm up into law.

On March 19, 2024, the European Council adopted changes to the Statute of the Court of Justice of the European Union in an attempt to improve its efficiency.

On March 13, 2024, the EU legislators reached a provisional agreement on the content of the regulation prohibiting products made with forced labour (“the FL Regulation”). This piece of legislation is part of a series of proposed directives addressing human rights in supply chains which also incorporates recent European ESG efforts (CSRD, CBAM, Regulation against deforestation).

A number of important Belgian and EU legislative changes are likely to have an impact in 2024. On the one hand, there are new laws that have been adopted and will start to bite, and, on the other, there are proposals that are expected to firm up into law.

On October 1, 2023, the transitional period of the Carbon Border Adjustment Mechanism (the “CBAM”) began. The mechanism is part of the EU’s efforts to achieve objectives outlined in its green agenda, in particular to tackle the issue of the relocation of emission-heavy production to countries with less stringent environmental policies. In practical terms, it means that starting from October 1, 2023 until December 31, 2025, emissions on goods in certain sectors should be reported when they are imported into the customs territory of the EU. Subsequently, during the definitive period, the trading in CBAM certificates will be added to the reporting obligations, and, gradually, the existing EU Emission Trading System (“ETS”) will be replaced with the CBAM in 2034. In this alert, we discuss certain basic elements of the CBAM as well as certain complex technical aspects of the reporting requirements.

On October 3, 2023, the European Parliament adopted a report on a new trade defense instrument in the European Union (herein referred to as the “EU” and the “Union”): the so-called “anti-coercion instrument” (“ACI”). The ACI is expected to enter into force before the end of 2023 as a new addition in the EU’s trade defense toolkit.

On May 17, 2023, ten years after the EU adopted its Union Customs Code (UCC), the European Commission published a proposal intended to begin the complex journey of modernizing this crucial cog in the EU’s customs union.

On July 25, 2023, the EU published in its Official Journal two instruments aimed to strengthen the restrictive measures in the context of Russian-Ukrainian war:

On July 6, 2023, members of the European Parliament’s Civil Liberties Committee (CLC) adopted a draft negotiating mandate that would target those violating or circumventing EU Sanctions.

On March 30, 2023, Advocate General (AG) Tamara Capeta of the Court of Justice of the European Union (CJEU) published her opinion in relation to a preliminary reference submitted by the Budapest High Court (Case C-106/22).

Last year, the European Union (EU) legislature adopted a far-reaching regulation aimed at tackling the distortive effects on EU markets of financial support provided by non-EU countries to undertakings active in the EU (Foreign Subsidies Regulation or FSR). However, the FSR left many procedural details to be hammered out by the European Commission (EC) in an Implementing Regulation, to be adopted before the FSR itself starts to apply in July 2023. On 6 February 2023, the EC launched a much-anticipated public consultation regarding its draft Implementing Regulation, including two annexes containing notification forms for concentrations and public procurements. Stakeholders have until 6 March 2023 to submit comments.

As we wrote in an earlier client alert, the European Commission proposed the FSR in May 2021 to close a regulatory gap and level the playing field between undertakings receiving subsidies from EU Member States, which are subject to strict state aid rules, and recipients of third-country subsidies, which so far escaped scrutiny. The proposal followed a public consultation on the European Commission’s June 2020 White Paper on Foreign Subsidies.

On May 5, 2021, the European Commission unveiled a proposal for a Regulation “on foreign subsidies distorting the internal market.” This legislative initiative is aimed at remedying potential distortions of competition  in the EU caused by companies receiving subsidies from non-EU governments. The proposal provides for three new regulatory tools, i.e., a mandatory filing obligation for certain mergers backed by foreign subsidies, a requirement to notify foreign financial contributions when submitting bids for public contracts over a certain value, and a general market investigation tool. The proposed scrutiny of foreign subsidies would complement existing State aid rules, which only apply to subsidies granted by EU Member States, with the aim of ensuring a level playing field for all market players within the EU. However, the proposal would add considerable complexity to an already complex regulatory landscape for international businesses in the EU.