Chinese security equipment maker Nuctech and a leading Chinese chamber of commerce in Europe on Thursday criticized the European Union (EU)'s use of its foreign subsidy law against Chinese companies, saying it risks undermining international trade rules and fair competition.

The European Commission earlier on Thursday announced an in-depth investigation into Nuctech under the EU's Foreign Subsidies Regulation (FSR), a 2023 law that China's Ministry of Commerce concluded in early 2025, after its investigations, constituted a "trade and investment barrier."

In a statement, Nuctech said it had "always operated independently" on a market-oriented basis and "strictly" complied with the laws and regulations of all jurisdictions where it operates, including the EU.

The company, which supplies security inspection systems used at ports, airports and border crossings, said its operations respected international rules and market-economy principles, citing more than two decades of expertise in the public security sector in Europe and globally.

Nuctech said it would continue to cooperate with EU investigators "to ensure that the facts are assessed accurately and in an unbiased manner" and reserved the right to take "all necessary legal measures" to protect its rights and interests.

"We look forward to the EU adhering to international rules and the principles of fair competition and to providing an open, fair, and non-discriminatory business environment for all enterprises operating in the EU," it said.

In a separate statement, the Brussels-based China Chamber of Commerce to the European Union (CCCEU) voiced "strong dissatisfaction and firm opposition" to the Commission's continued, targeted and excessive use of FSR investigative tools against Chinese-invested companies.

The chamber said the investigative powers granted to the Commission under the FSR "are not unlimited or totally discretionary", arguing that while the Commission may initiate investigations at will, it should not abuse its powers or the FSR framework to unreasonably disrupt or interfere with the normal business activities of EU-based enterprises established by foreign investors.

It said that the FSR's definition of foreign subsidies is "ill-defined and ambiguous" according to its own rules and may significantly exceed reasonable boundaries under existing international trade and anti-subsidy rules.

The CCCEU accused the Commission of failing to uphold non-discrimination and transparency in its enforcement, saying most FSR investigations since the law took effect had targeted Chinese firms.

"Chinese enterprises have become the primary targets of FSR enforcement, in a clearly disproportionate and abusive manner, completely incompatible with the public announcement made by the Commission in the legislative process that all countries will be treated equally and non-discriminatory under the FSR enforcement," it said.

The EU's decisions to open cases under the FSR lacked transparency and failed to provide "adequate and credible" justification or evidence, it added.

Citing an assessment by China's Ministry of Commerce, the CCCEU said enforcement of the FSR had created de facto barriers to investment and trade, with cumulative direct and indirect losses to Chinese enterprises estimated at about 15.6 billion yuan (about 2.2 billion U.S. dollars).

The latest survey by the CCCEU of 205 Chinese companies and institutions in Europe found that 63 percent reported their operations had been affected by the FSR through disrupted business, lost opportunities or risks linked to actual or potential probes, while 51 percent reported damage to their commercial reputation and market perception, it said.

The CCCEU urged the Commission to apply the FSR "with prudence," immediately stop discriminatory and disproportionate enforcement against Chinese companies, and reduce excessive compliance burdens.

"The EU should uphold a fair, impartial, and transparent business environment for foreign investors, and maintain an open attitude conducive to the healthy and stable development of China-EU investment and trade relations," it said.