On the 22nd (local time), the European Union (EU) stated that regarding Korea Hydro & Nuclear Power's nuclear power plant contract in the Czech Republic, a thorough investigation of the foreign subsidies regulation (FSR) is currently undergoing "working-level consultations."
Lea Jübar, spokesperson for the EU Commission in charge of competition, noted during a regular briefing that it is currently difficult to predict "the timing or results regarding the decision on the thorough investigation."
In response to an additional inquiry, "Does that mean the thorough investigation is postponed, or is there still a possibility?" they said, "The term postpone is incorrect since there has never been an announcement of a thorough investigation," adding, "While there is a possibility of initiating a thorough investigation under FSR, there is currently nothing further to add regarding specific issues."
The working-level consultations mentioned that day are part of the preliminary review process for the thorough investigation of FSR. The Commission is conducting a preliminary review procedure to determine whether to carry out a thorough investigation of Korea Hydro & Nuclear Power's bidding process, following a complaint from Électricité de France (EDF) after the latter fell short in bidding last October. The FSR, implemented in July 2023, is a regulation that considers excessive subsidies received by EU foreign corporations from government or public institutions as unfair competition and regulates their participation in mergers and acquisitions or public tenders.
If the thorough investigation concludes that unfair subsidies were received, the Commission can restrict participation in mergers and acquisitions or public tenders by its own authority. There have been cases where Chinese companies subjected to the Commission's thorough investigation withdrew from bidding voluntarily.
KHNP has stated that it did not receive any subsidies from the Korean government, and that the bidding for the Czech nuclear power plant began in March 2022 and is not subject to the FSR. However, since EDF has already filed a lawsuit in a Czech court regarding the same matter, there is a high likelihood that the main contract will be delayed until a ruling is made, and if the Commission also initiates a thorough investigation, the burdens on both the Czech government and KHNP will inevitably increase, regardless of the outcome.
The recent active concerns raised by senior officials of the Czech government to the EU are in this context. According to the Commission, Czech President Petr Pavel raised this issue during a meeting with Ursula von der Leyen, President of the EU Commission, on the 20th. Czech media Seznam Zpravy reported that von der Leyen expressed the position that "we will handle the situation very rapidly and transparently" during that meeting.
On the same day, Czech Minister of Industry Lukas Blazek also met with Stefan Sejourne, the EU Commissioner responsible for the FSR investigation. Blazek stated that it was a "constructive meeting" and that he would actively cooperate with the Commission to ensure that the nuclear power project continues and that all matters become clear. Sejourne is the individual who sent a letter earlier this month to the Czech side, requesting to halt contract procedures until the FSR investigation is completed.
At that time, the Czech government raised suspicions that the Commission's member Sejourne, who is French, might be intentionally hindering the nuclear power contract. The Commission has clarified that it proceeded with additional steps because the Czech Republic failed to respond to the official request for information (RFI) letter. Given that there has already been one controversy, it is expected that the Commission will expedite the process to avoid unnecessary misunderstandings.