Czechia – First Annual Report on Foreign Direct Investments Screening in the Czech Republic
On 1 August 2022, the Ministry of Industry and Trade of the Czech Republic published the first Annual Report on Foreign Investments Screening in the Czech Republic. The report provides some interesting insights on the FDI Act that has been in effect for one year. The Ministry of Industry and Trade received 389 notifications from EU Partners of investments made in other Member States. Of the 12 cases investigated, no transaction has been prohibited by Czech authorities. In two cases investors withdrew their filings and two cases are still ongoing. The relatively small number of proceedings is due to the general downward trend in the market caused by various factors like the Covid-19 pandemic or the Russian invasion in Ukraine. Furthermore, the Ministry announced even before the FDI Act entered into force that the prohibition of transactions would only be applied rarely. The practice of the last year confirmed this announcement. Nevertheless, the report shows that the potential Screening by the Ministry remains a risk that must be assessed by potential investors.
For further information you may consult the report here.
Ireland: Publication of the new FDI regime
In our Investment Screening Update for June, we reported on the forthcoming FDI regime in Ireland. On 8 August 2022 the Department of Enterprise Trade and Employment has published the so-called “Screening of Third Country Transactions Bill 2022” to protect Irish critical technology and infrastructure from potentially harmful non-European foreign investment. Although Ireland’s small economy is heavily dependent on foreign direct investments the deputy prime minister has stated that it is important to “be on our guard against forces that threaten our security and strategic assets falling into the hands of unfriendly foreign governments.” In this regard, the Screening of Third Country Transactions Bill 2022 is Ireland’s reaction to the communication from 6 April 2022 in which the European Commission advises member states to be more vigilant about investments originating from Russia or Belarus. The new Bill will enable the Department of Enterprise Trade and Employment to screen foreign investments int the sectors of technologies identified as sensitive, or in critical infrastructure such as health, electricity, military, ports and airports.
The draft new law is currently in the Irish legislative process and is expected to be implemented and progress quickly.
For further information you may consult the draft as well as an Explanatory Memorandum here.
Italy: Decree implementing the Golden Power Procedure
The Presidency of the Council of Ministers will soon issue a decree implementing Law Decree No. 21/2022 from 22 March 2022 reported by our Country Reporters for Italy on 14 May 2022 (you can read the report here). The Decree will introduce the announced simplifications to the FDI notification procedure (the so-called Golden Power). The new “pre-notification” procedure that allows stakeholders to receive an assessment from the government on the question whether a transaction must be notified or not. This way precautionary filings are avoided which often leads to delays in the completion of transactions. Further substantial modifications to the Decree prior to its publication are expected. The Decree will be in force after its publication on the Republic of Italy’s Official Gazette.
Paper launch: The EU’s new Investment Screening measures
Naoise McDonaugh published a paper on the EU’s new Investment Screening measures. The link to the paper “, Protection or Protectionism? State-Driven Foreign Investment Risks and the EU’s New Investment Screening Measures” can be found here.