Filers are required to report subsidies (or the commitment to provide a subsidy in the future) from any foreign entity or government of concern (which includes foreign terrorist organizations, those on the SDN list (i.e., specially designated nationals and blocked persons), and those convicted under various other acts (Espionage Act, Arms Export Control, etc.)). The Q&A posted was meant to provide additional guidance on subsidies provided by government entities, not to limit the required response to such public entities.
Question
From: Whitehead, Nora
Sent: Tuesday, March 25, 2025 3:54:13 PM (UTC-05:00) Eastern Time (US & Canada)
To: [Redacted]
Cc: HSRHelp
Subject: RE: Subsidies Question
Filers are required to report subsidies (or the commitment to provide a subsidy in the future) from any foreign entity or government of concern (which includes foreign terrorist organizations, those on the SDN list (i.e., specially designated nationals and blocked persons), and those convicted under various other acts (Espionage Act, Arms Export Control, etc.)). The Q&A posted was meant to provide additional guidance on subsidies provided by government entities, not to limit the required response to such public entities.
From: [Redacted]
Sent: Monday, March 24, 2025 8:41:17 PM (UTC-05:00) Eastern Time (US & Canada)
To: HSRHelp
Subject: Subsidies Question
Hi PNO,
I have a question about your 3/20/25 post on subsidies, which says:
Question
The amended HSR Rules provide that the term “subsidy” “has the meaning given to the term in part IV of title VII of the Tariff Act of 1930 (19 USC 1677(5)(B)),” which defines “subsidy” as:
the case in which an authority (“a government of a country or any public entity within the territory of the country”) —
(i) provides a financial contribution, (ii) provides any form of income or price support within the meaning of Article XVI of the GATT 1994, or (iii) makes a payment to a funding mechanism to provide a financial contribution or entrusts or directs a private entity to make a financial contribution, if providing the contribution would normally be vested in the government and the practice does not differ in substance from practices normally followed by governments to a person and a benefit is thereby conferred.
For the purposes of Rule §801.1(r)(1), then, can a “subsidy” only exist where it is provided by “a government of a country or any public entity within the territory of the country”?
Answer
For the purposes of Rule §801.1(r)(1), a “subsidy” can exist where it is provided by “a government of a country or any public entity within the territory of the country” or where an authority “makes a payment to a funding mechanism to provide a financial contribution, or entrusts or directs a private entity to make a financial contribution, if providing the contribution would normally be vested in the government and the practice does not differ in substance from practices normally followed by governments, to a person and a benefit is thereby conferred.” See 19 USC 1677(5)(B), which provides more detail.
Based on this it seems like you’re saying the only reportable subsidies are those provided by governments or public entities, even if via a private entity so long as the contribution would normally be vested in the government and follows the practices of governments – i.e., the subsidy has to flow, directly or indirectly, from a government or public entity.
But 801.1(r)(i) also defines “foreign entity of concern” to include those identified in 42 U.S.C. 18741(a)(5), which references foreign terrorist organizations, those on the SDN list (i.e., specially designated nationals and blocked persons), and those convicted under various other acts (Espionage Act, Arms Export Control, etc.). These aren’t referenced in your post.
Does the “subsidies” reporting requirement apply to a private company on the SDN list?