By Foo Yun Chee

BRUSSELS, (Reuters) – Proposed EU legislation that targets foreign-backed buyers of European businesses may prove difficult to implement in practice. It was proposed by the American Chamber of Commerce along with peer groups representing Indian and Japanese companies.

These groups voice their concerns as European Union lawmakers and European Union governments are due to meet next month in order to consider and perhaps adopt the European Commission proposal from last year. It targets subsidiaries that cause harm to competition.

It also includes bids for public tenders, to protect against foreign subsidy use to expand market share.

The American Chamber of Commerce to Europe stated in a statement that the proposal “poses a significant administrative burden for EU and non EU businesses alike, by introducing broad-ranging notification requirements as well as lengthy investigation periods.”

The letter was also signed by Europe India Chamber of Commerce and European Australian Business Council.

According to the group, “A variety of concepts that are being proposed may prove to be impractical for companies seeking to comply with Regulations. Non-compliance could result in the imposition or substantial sanctions.”

These people argued that foreign subsidies should have a smaller scope, including the sale or purchase of goods or service in an unqualified, non-discriminatory or competitive tender.

According to the group, legislation must establish a minimal threshold for financial contributions so that public subsidies are not used to pay water, electricity, or employee insurance.

They said that the EU must also examine whether foreign subsidies are being used to promote job growth, innovation and resilient supply chains in order not to violate the World Trade Organisation’s rules.