EU probes Nuctech over alleged foreign subsidies and market distortion

EU investigators have turned Nuctech, the Chinese border-scanner maker, into a test case for how far Brussels will go against state-backed suppliers in sensitive infrastructure. The European Commission opened an in-depth foreign-subsidies probe into Nuctech on 11 December 2025 after carrying out unannounced inspections in Poland and the Netherlands in April 2024, the first dawn raids under the EU Foreign Subsidies Regulation.

The Commission said the company is active worldwide in threat detection systems for airports, ports, railways, roads and border customs points, along with related services. It said possible foreign subsidies could take the form of grants, preferential tax measures and preferential financing in the form of loans, all of which could distort competition in the EU internal market if they helped Nuctech win contracts on terms rivals could not match.

Nuctech presents itself as a security inspection product manufacturer and solutions supplier that originated from Tsinghua University in Beijing. The company says it was founded in 1997 and that its products and services reach more than 140 countries and areas. Commission documents, however, say Nuctech is headquartered in the People’s Republic of China and forms part of the Tsinghua Tongfang group, which is indirectly controlled by the PRC.

The dispute reaches beyond one vendor’s sales pipeline. A port or airport procurement decision can determine which scanners sit at the front line of Europe’s border controls, where governments are increasingly sensitive to security risks, industrial policy and the influence of foreign state support. Brussels has framed the case as a test of whether Chinese-backed firms can undercut European competitors in strategic infrastructure without tripping the bloc’s subsidy rules.

The politics sharpened further after Beijing instructed Chinese entities not to assist the EU probe. The Commission defended the investigation as a standard use of its powers, while the case deepened an already fraught trade climate around critical technology suppliers.

Nuctech’s problems also fit a wider security pattern. On 22 December 2020, the U.S. Department of Commerce Bureau of Industry and Security added Tongfang NucTech Technology Ltd. to the Entity List, saying there was reasonable cause to believe it had been involved in activities contrary to U.S. national security interests. For European officials, that history has made Nuctech less a niche scanner supplier than a standing example of how subsidies, procurement and geopolitics now overlap at the continent’s borders.