2021-09-15-安永_中国_-欧洲外国直接投资审查规定系列指南_36页_2mb

European FDI Screening Rules Summary

Overview

• European FDI screening rules have evolved significantly, especially due to COVID-19, aiming to protect public policy, security, and key sectors.
• The EU Regulation (EU) 452/2019 provides a framework; Member States retain approval powers, but must share information with the European Commission and cooperate.
• Rules are sector-specific (e.g., defense, energy, health) and cross-sector, triggered by specific investment types (e.g., asset purchase, crossing share thresholds).
• Timelines vary (e.g., France: 30-75 business days, Germany: 2-6 months); non-compliance can lead to fines, imprisonment, or transactions being null and void.

By Country

1. France

• Regulation: Based on Articles L. 151-1 et seq. of the Monetary and Financial Code (updated by PACTE Law and decrees like Decree No. 2020-740).
• Triggers:
  • Sectors: Defense/military, energy, water, transport, public health, critical tech (AI, biotech, semiconductor).
  • Thresholds: 10% (listed companies post-pandemic), 25% (non-listed) voting rights; lower for certain sector acquisitions under Decree 2020-740.
  • Measures: Temporary control over specific businesses (R&D, innovation projects).
• Duration: No time limit (except temporary COVID-related rules, expiring Dec 2021 if not extended).
• Notification: Electronic + paper submission to Direction Générale du Trésor.
• Government Powers: Authorization, injunctions, suspension of voting rights, prohibitions, fines (€50k/day), criminal penalties.
• Duration/Extension: Potential extension by the French Government.
• Applicability: Broad, especially for investments by non-EU/EEA entities; EU/EEA investors may benefit from lighter rules.
• Penalties: Fines (up to €1m/natural person or €5m/legal entity), nullity of agreements, no de minimis exemptions.

2. Germany

• Regulation: Based on the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung), revised 2021 (17th version).
• Triggers:
  • Sectors: Critical Infrastructures (energy, IT, transport, health), critical technologies (AI, cyber, robotics), dual-use goods.
  • Thresholds: 10% for critical infra, 20% for other sensitive sectors, 25% otherwise.
  • Also covers asset acquisition and control of board seats/veto rights.
• Duration: Applicable indefinitely.
• Notification: Written/online to the Federal Ministry for Economic Affairs (BMWi). No time limit for notifications; assessment can take 2-6 months.
• Government Powers: Authorization, warnings, prohibitions, standstill obligations (transaction suspension until cleared).
• Applicability: All foreign investors.

3. Italy

• Regulation: Primarily Regulation (EU) 452/2019 (Decree-Law 'Decreto Liquidità' No. 23/2020), expanded from the 'golden share' system (Decree-Law 332/1994).
• Triggers:
  • Security/national defense, energy, transport, infrastructure, media, finance, health, critical tech, data processing.
  • Thresholds: 3%, 5%, 10%, 15%, 15%, 20%, 25%, or 50% depending on assets/sectors.
• Duration: Applicable indefinitely.
• Notification: In Italian, submitted to the Presidency of the Council of Ministers. Procedure: 10 days post-agreement signing.
• Government Powers: Set purchase conditions, veto transactions, impose ongoing commitments, nullify acts/resolve via administrative courts (Verwaltungsgerichtsordnung).
• Applicability: All foreign investors. No de minimis exemptions.
• Penalties: Administrative sanctions, financial penalties (e.g., penalties via Consob), restoration obligations, criminal action (only in specific cases).

4. Spain

• Regulation: Based on Law 19/2003 (Art. 7 bis) and subsequent Royal Decree-Laws (e.g., RDL 34/2020), activated by the state of emergency due to COVID-19.
• Triggers:
  • Sectors: Critical Infrastructures (energy, transport, health, communications, data, aerospace, defense); critical supplies; sectors with sensitive information; media.
  • Thresholds: 10% share capital (liberalization suspended for treaty screens via transitional regime). 10% notifications mandatory.
• Duration: Indefinite, extended until Dec 31, 2021 (with potential extension).
• Notification: Online form (Formulario para el procedimiento de escrutinio de inversiones extranjeras) to the Ministry of Industry, Trade, and Tourism. Deadline: Pre-closing.
• Government Powers: Nullify unauthorized transactions, levy fines (min €30k for serious infringements), issue warnings.
• Applicability: All non-EU/EFTA investors.
• Penalties: Nullity of operations, fines (up to 5% of acquirer's turnover), imprisonment risks (n/a for non-notification, risk only if Material Influence threshold is breached).

5. UK

• Regulation: New National Security and Investment Act (NSIA) 2021 (Not yet fully enforced but retrospective from Nov 12, 2020).
• Triggers:
  • Sectors: Broad, including defense, space, energy, banking, AI, quantum tech, critical suppliers, communications, critical materials, transport.
  • Thresholds/Mandatory Notification: Acquiring 25%, 50%, or 75%+ shares; influencing policy; acquiring relevant assets; Company reorganizations (Voluntary screening). Mandatory notifications for certain acquisitions (economic concentration rules apply).
• Duration: No inherent limit (legislative intent suggests indefinite).
• Notification: Voluntary or mandatory; online forms.
• Government Powers: 'Call-in' powers (if national security risk), impose conditions, restrictions, or prohibit transactions (unwinding required). Double check beneficial owner/purpose.
• Applicability: Worldwide, no de minimis exemptions. Also applies to UK companies acquiring foreign entities/service providers.
• Penalties: Transaction nullity, legal fees/costs, fines up to 5% of turnover/£10m, directors' imprisonment risk. Retroactive call-ins possible.
• Further Updates: The NSIA is enabling retrospective review for transactions since Nov 12, 2020. Approval process involves multiple government departments.

Contacts

• For specific legal assistance regarding these FDI rules in France, Germany, Spain, the UK, and Italy:
  • France: Yi Sun, Roland Montfort, Chantal Van Stipriaan, Alexandre Gelblat
  • Germany: Yi Sun (Same contact as France), ? (Contact information missing for Germany box)
  • Spain: Simeon Garcia-Nieto Nubiola, Laura De Pedro Martin
  • UK: Suwin Lee, Zhuoqun Wang
  • Italy: Alessia Pastori, Angela Li (different email), EY Global contact assists翻译
• Note: Contact details vary; double-check names/emails for specific countries if needed.