Background
Mr Merricks is the proposed class representative for 46.2 million people who, between 22 May 1992 and 21
New era of FDI in the European Union – EU FDI Regulation now in full force and effect
On October 11, 2020, the EU FDI Screening Regulation (EU) 2019/452 – the “Regulation”) entered fully into force.
The Regulation, which was approved and adopted in March 2019, establishes a framework for the screening of foreign direct investments (“FDI”) by EU Member States in which decision-making powers rest at the Member State level. Significantly, from October 11, an element of EU-level cooperation in FDI is introduced and in particular will bring into effect (i) regular information sharing among Member States and the European Commission about transactions subject to national FDI screening, and (ii) a mechanism through which other Member States and the European Commission can coordinate and comment on FDI that has an “EU-dimension”.
In this blogpost, we look at the overall status of national measures in FDI at this juncture and describe in overview the EU-level cooperation and information sharing mechanisms.
National investment screening mechanisms
While the Regulation does not require Member States to introduce their own screening mechanism at a national level, the European Commission has recommended that all Member States do so – and particularly encouraged this in the context of the COVID-19 pandemic (see our earlier alert and blog post). Accordingly, and in order to fully implement the Regulation, Member State laws have been (or are being) adapted to allow local regulators to take account of national security concerns of other Member States.
Fifteen Member States – Austria, Denmark, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Spain and Slovenia (and Norway and the United Kingdom) – currently have national investment screening mechanisms in place. Several other Member States are in the course of reforming their FDI laws or adopting new FDI screening measures.
Upfront FDI filing analysis becomes crucial – further Member State developments ahead
The FDI landscape in the EU has therefore been very dynamic in recent months and changes continue at pace. Many Member States have introduced mandatory filing requirements with standstill obligations until clearance is received. Often these filing obligations are triggered at very low thresholds. These FDI filing requirements are so significant and varied that FDI has become a key issue to consider upfront in M&A transactions involving foreign investors – and at the same importance as the merger control filing analysis.. In addition to adopting new long-term measures in FDI screening, several Member States (such as France, Germany, Italy and Spain) adopted emergency measures related to COVID-19, and some of which have temporary application (until the end of the calendar year or for the duration of the pandemic).
UK Is Left out of EU Cooperation on Foreign Direct Investment, And Will Soon Be “Foreign”
Foreign Direct Investment Regulation
The EU Regulation on Foreign Direct Investment (2019/452) (the “EU FDI Regulation”) will enter into force fully on October 11, 2020. Most notably, on this date, a cooperation and information sharing mechanism among Member States and the European Commission in respect of foreign direct investment (“FDI”) that
European Commission publishes White Paper on the Review of Foreign Subsidies – [New/More] Intervention Powers ahead?
On 17 June 2020 the European Commission (“Commission”) published a White Paper on new enforcement powers regarding foreign subsidies. This initiative pursues two objectives, first it sets out a general policy approach for foreign subsidies, and second, it provides a number of proposals to address a perceived regulatory gap. More specifically, the White Paper suggests
Regulation of Foreign Direct Investment (“FDI”) gathers Pace across Europe – A Week of Change.
German Government decides on tightening the National FDI Screening Regime
The German government has proposed a new draft bill reforming the current foreign direct investment (“FDI”) regime, which is likely to have a significant impact on all M&A transactions involving acquisitions of 10% or more of the voting rights in German companies active in “critical infrastructures” and “critical technologies” by any non-EU investors. Under the