China's Nuctech raided in EU over foreign subsidies concerns

By Foo Yun Chee

BRUSSELS (Reuters) - Chinese security equipment company Nuctech's Dutch and Polish offices were raided by EU competition regulators, the company said on Wednesday, as the European Commission cracks down on companies receiving unfair state subsidies which put EU peers at a disadvantage.

The European Commission has launched four investigations against Chinese companies since its foreign subsidies regulation introduced in July 2023 allowed the executive to assess whether subsidies allowed companies to submit overly advantageous offers in procurement tenders to edge out EU rivals.

"Nuctech offices in the Netherlands and Poland are being inspected by the European Commission in relation to the Foreign Subsidies Regulation," partly-state owned Nuctech said in a statement.

"Nuctech is cooperating with the European Commission and is committed to defending its reputation of a fully independent and self-supporting economic operator," the maker of security inspection scanners for airports and ports said.

The Commission on Tuesday announced dawn raids at an unnamed company in an unnamed EU country, which could lead to another investigation if the executive finds sufficient evidence of distortive subsidies.

"The Commission has indications that the inspected company may have received foreign subsidies that could distort the internal market pursuant to the Foreign Subsidies Regulation," the Commission said in a statement.

Nuctech was blacklisted by the U.S. Bureau of Industry and Security, Commerce in 2020.

An official from China's commerce ministry earlier condemned the raid, saying it interfered with the normal order of fair competition.

The China Chamber of Commerce to the EU said it was told that IT equipment and employees' mobile phones were seized by regulators who also demanded access to data.

"The EU's actions send a detrimental message not only to Chinese enterprises but to all non-EU companies conducting business in the bloc," it said in a statement.

A Chinese Ministry of Commerce official said in a statement the raid undermined the confidence of all foreign enterprises in their operations in Europe and said China would take all necessary measures to safeguard the rights of its firms.

(Reporting by Foo Yun Chee; Additional reporting by Ethan Wang and Ella Cao in Beijing, Charlotte Van Campenhout in Amsterdam; Editing by Alison Williams, Alex Richardson, Ros Russell, Barbara Lewis, Alexandra Hudson)