Source: iStock.com/JoeGough

© iStock.com/JoeGough

In the informal trilogue with representatives of the Council Presidency, the European Parliament and the European Commission, a final overall understanding on the establishment of an EU legal basis was achieved with a view to national action against individual cases of state-controlled or state-funded strategic direct investments.

Federal Minister for Economic Affairs and Energy Peter Altmaier said:

“I welcome the political agreement in the context of the trilogue negotiations at EU level and hope we will soon be able to wrap up the dossier. The EU Regulation is based on an initiative from Germany along with France and Italy. It marks an important step towards our being able to afford sensitive German and European sectors of industry more effective protection against state-controlled or state-funded strategic acquisitions from non-EU countries. At the same time, we continue to be one of the world’s most open economies for foreign direct investment – concerns about European protectionism are unfounded. But we will be able to screen acquisitions in greater detail, for example in the field of critical infrastructures. The rapid agreement at EU level reflects the great significance attached to this legislative project by all parties.”

Last autumn, the German government joined with France and Italy to initiate a legislative procedure at European level with a view to establishing an EU framework for the screening of foreign direct investment. The aim is to expand the possibilities for Member States to screen investments, in particular so that they can take action against individual cases of state-controlled or state-funded strategic direct investments. The compromise achieved takes up all of the interests raised by Germany. It retains the criterion for screening of “public order or security” for a prohibition, but explicitly defines critical infrastructures, critical technologies, security of supply and access to / control of sensitive information as aspects of public order and security. This means it will remain possible to give consideration to additional aspects in the screening at national level. Further to this, an exchange of information is established between Member States and the European Commission. The compromise text now needs to be officially adopted both by the European Parliament and the Council. We hope that the procedure can be completed before the end of 2018.

The revision of German foreign trade and payments legislation, which has been initiated in parallel by the Economic Affairs Ministry, is to be adopted by the cabinet before the end of the year. It aims to reduce Germany’s thresholds for screening in the case of corporate acquisitions by buyers from outside the EU in certain sensitive areas of the economy.