Nuctech Fights Back: EU Court Battle Over Subsidy Allegations

Chinese security equipment firm Nuctech is contesting the European Commission's inspections at its Dutch and Polish offices, arguing there’s no evidence for the claims it benefited from illicit state subsidies. The company, appealing to Europe's General Court, requests suspension of inspections, potentially taking years for a resolution.

Chinese security equipment company Nuctech is taking the European Commission to court over raids at its Dutch and Polish offices, saying there was no evidence to support allegations it benefited from illegal state support.

The company, which makes body and luggage scanners for airports and ports in more than 170 countries and was blacklisted by the U.S. Bureau of Industry and Security, Commerce in 2020, said it had appealed to the Luxembourg-based General Court, Europe's second-highest. The challenge comes two months after the European Commission raided two of Nuctech's EU premises on suspicions it may have received distortive foreign subsidies in breach of the bloc's Foreign Subsidies Regulation (FSR) introduced in 2023.

Partly state-owned Nuctech denied the EU allegations. "Nuctech has appealed to the General Court of the EU against the European Commission's decision to inspect Nuctech's offices on suspicion of breaching the EU Foreign Subsidies Regulation," the company said in a statement.

"Nuctech has also requested the General Court of the EU to suspend the inspection to avoid potential harm caused to Nuctech," it said. The Commission did not immediately respond to a request for comment.

It could take several years before the court issues a ruling. The Commission, which acts as the EU competition enforcer, has launched four investigations against Chinese companies under the FSR to assess whether subsidies have helped companies to outbid EU rivals in procurement tenders.