EU – Commission prepares revision of the EU’s FDI Screening Regulation
In a communication on its work programme for 2023 dated 18.10.2022, the European Commission announced that it is ready to review the EU FDI Screening Regulation two years after its entry into force. The aim is to identify the necessary modifications that would improve its functioning and effectiveness. In particular, the experience gained from the sanctions against the Russian aggression against Ukraine is to be evaluated. Of particular interest: The EU wants to investigate to what extent an outbound investment screening mechanism is necessary.
The communication is available here.
Germany – FDP publishes resolution on the protection of critical infrastructure in Germany
On 7 November, the German coalition partner FDP published a resolution on the protection of critical infrastructure in Germany. In it, they call for a turning point for critical infrastructure, covering all those key industries that are of such paramount importance that their failure would have drastic consequences for the community. Among other things, in response to the COSCO affair (see CELIS Update of October 2022), the FDP calls for an amendment to the Foreign Trade and Payments Act (the German Investment Screening Law) and the swift adoption of the “umbrella law” agreed upon by the three government parties, which is also to regulate the physical protection of infrastructure.
The resolution is available in German here.
Romania – Adoption of secondary legislation for the organization of the FDI Screening Commission
The Romanian government has adopted the Decision no. 1,326/2022 which approves the Regulation on the functioning of the CEISD, which came into force as of 8 November 2022 (the “CEISD Regulation”). The new secondary legislation concerns the functioning and organisation of the FDI Screening Commission, the authority responsible for reviewing foreign direct investment under the new FDI regime that came into force this year. Under the new regime, there is now a filing obligation when a non-EU investor acquires control over an undertaking in Romania. In addition, there is a filing obligation if the investment falls into a number of sensitive categories or the investment exceeds €2 million.
Further amendments and adjustments are expected. A corresponding “Draft Law” is already under debate in the Romanian Parliament.
EU – Adoption of the foreign subsidies regulation
On 28 November the Council of the European Union has given its final approval to the foreign subsidies regulation. On the 10 November the European Parliament has already announced that it has formally adopted the Regulation on foreign subsidies distorting the internal market. The regulation is supposed to adress distortions created by subsidies that are granted by non-EU countries to companies operating on the EU single market. It lays down the procedural rules for investigating these subsidies in the context of large concentrations and bids in large public procurement procedures. In it’s communication the Council announces that the new regulation aims to restore fair competition between all companies operating in the internal market — both European and non-European.
With the approval of the Council the regulation is now formally adopted. After being signed by the President of the European Parliament and the President of the Council, the regulation will be published in the Official Journal of the European Union and will enter into force on the 20th day following its publication.
India/Canada – Publication of Annual FDI Reports
Both Canada and India published a FDI report this month. The Indian report covers the the period 2021-2022, during which the Indian Ministry of Home Affairs examined a total of 1096 foreign direct investment proposals relating to national security clearance.
In Canada, 1255 applications for investments were registered in the year 2021-2022 alone, which is a new record number. Eight investments were subject to a “net benefit to Canada” review, which is consistent with the three years previous, and all eight were approved.