EU subsidy raids on Chinese company Nuctech were legal, court rules

Landmark decision rejects firm’s assertion that complying with bloc’s regulation put it on collision course with mainland criminal laws

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The EU court’s ruling against Chinese inspection-products company Nuctech carries implications for other mainland firms operating in Europe. Photo: AFP

Published: 2:00pm, 14 Aug 2024Updated: 2:41pm, 14 Aug 2024

Chinese company Nuctech’s claims that the European Commission’s dawn raids of its premises seeking evidence of state subsidies were illegal have been thrown out by a court in Luxembourg.

In April, the commission joined local authorities in unannounced inspections of Nuctech’s premises in the Netherlands and Poland in the most high-profile use of its foreign subsidies regulation (FSR) to date.

Nuctech, a maker of body and baggage scanners for airports and ports, sued the commission in June.

It claimed the raids forced it to unlawfully provide information located outside the European Union and that complying with the FSR probe would force it to violate Chinese criminal laws.

Nuctech further argued there was no evidence of market distortion caused by its subsidies and that the raids, having generated headlines across Europe, caused the company reputational harm and financial damage.

A view of the Court of Justice of the European Union in Luxembourg, where the General Court ruled on the case involving Nuctech. Photo: dpa

On Monday, the Luxembourg-based General Court, the EU’s second-highest court, dismissed the case on all grounds in a landmark ruling expected to send shock waves through Chinese businesses operating in Europe.