The start of 2024 has seen the European Commission announce a new EU-wide legislative proposal, and the Italian and UK governments both issued two noteworthy enforcement decisions. In the EU, the European Commission published a proposal to update the 2019 EU Foreign Direct Investment Screening Regulation. The aim of the reform is to enable a clearer and more open line of communication between a national FDI authority and companies that have submitted an FDI filing.…
FDI enforcement in 2023 has been caught between two different public policy aims: the first is a willingness of authorities to expand their FDI regimes to review more investments; and the second, is a greater interest in and attention to the consistency and proportionality of such intervention. We have set out below the three main trends for companies to be aware of in relation to the enforcement of FDI rules and how they may affect…
As a result of national security concerns, the decision-making of national FDI regimes in the EU is not transparent and there are no obligations for authorities to publish their decision or the reasons behind it. However, authorities will often publish annual reports which provide a better understanding of national trends and decision-making. Two such reports were published at the end of September/October 2023. In September 2023, the German Federal Ministry for Economic Affairs and Climate…
FDI enforcement in Europe continues to increase, with authorities focusing on acquisitions relating to strategic assets and infrastructure. Companies and advisors should take this increased scrutiny into account when drafting corporate documents, and ensure that they have a clear strategy in place to obtain FDI clearances in a timely manner. The two major FDI investigations in Europe in September both concerned share acquisitions of strategic assets. First, in the face of concerns raised by national…
On 13 July 2023, in Case C-106/22, the European Court of Justice (ECJ) delivered its decision in relation to a preliminary reference submitted by the Budapest High Court. In the context of companies that often have a cross-border ownership structure extending outside of the EU, the ECJ concluded that the fact that a parent company registered in a third country has a majority control over an EU-based investor does not mean that the EU FDI…