Regulatory & International Trade | RIT
Helping Businesses Clear Regulatory Hurdles in Europe
Regulatory & International Trade | RIT
Regulatory & International Trade | RIT
Helping Businesses Clear Regulatory Hurdles in Europe

Extended Screening of Foreign Investment in France: A Risk of Incompatibility with Company Law?

Control of foreign direct investments in France (FDI) has been steadily tightened since 2014. The provisions of Articles L. 151-3 and R. 151-1 et seq. of the French Monetary and Financial Code (CMF), as supplemented by the Decree of December 31, 2019, organize this national screening mechanism based on the prior authorization of certain investments in sectors and activities considered sensitive.

In 2022, of the 131 FDI authorized, 70 were conditionally authorized, not without question as to the compatibility of these commitments with the free movement of capital and company law.

1. The filtering of FDI justifies questioning its compatibility with European requirements, as the European Commission or the Court of Justice is likely to consider it too restrictive. Moreover, it is by no means certain that all commitments imposed by the Minister of the Economy on the foreign investor in order to obtain authorization will pass the proportionality test of the Court of Justice of the European Union (CJEU).

The control of FDI in France is triggered when three cumulative conditions are met:

i. The investor is deemed a foreign investor within the meaning of Article R. 151-1 of the CMF, i.e. any individual of foreign [...]

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European Union Criminalizes Violations of Sanctions

As announced in our last Quarterly Sanctions Update, on April 12, 2024 the Council of the European Union adopted a directive criminalizing sanctions violation at the European Union (EU) level. In this post, we provide a summary of the key provisions of this directive, to be followed by a second post focusing on its potential implementation in EU Member States.


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Foreign Direct Investment Control in Germany | Recent Facts and Figures

Under the German Foreign Investment Control regime, the Government may review foreign investments in domestic target companies above certain thresholds. The Government has only recently published interesting statistics about the development of German investment screening over the past three years (available in German only). These statistics show that foreign investments across all industries have come under heavy scrutiny by the Government. Therefore, it has become indispensable for foreign investors to review potential FDI filing obligations or consider a voluntary FDI filing during legal due diligence, regardless of the investor’s place of origin, the size of the domestic target business or the industry affected by the contemplated investment.


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First Dawn Raid Carried Out by The European Commission | Another Investigative Tool Deployed Under the Foreign Subsidies Regulation

Since the Foreign Subsidies Regulation (FSR) entered into force on July 12, 2023, the European Commission has increasingly started to wield the powers granted to it. It opened its first in-depth investigation into a public procurement process in Bulgaria in a case involving locomotives on February 16, 2024 (read more in our previous post here) which led to the withdrawal of the Chinese from the public tender. Subsequently on April 3, 2024, the Commission initiated two new in-depth investigations, again in a public procurement matter, this time concerning solar panels. On April 9, 2024, the Commission initiated its first ex officio investigation in the wind turbine sector.


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How to Determine Which Investors Should be Disclosed Under the Foreign Direct Investment Screening Regime in France, the United Kingdom and the United States

Where a transaction is carried out by an investment fund, the question of which investors should be disclosed under Foreign Direct Investment will eventually surface. We consider the necessary disclosures under French, US and UK FDI screening.

There is significant potential for divergence as to how new(er) FDI rules are applied in practice, in particular in relation to common structures used by private equity. One question that arises regularly is whether the FDI regimes are catching the limited partner investors (LPs) in the same way as any other direct investors.


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