Update on Investment Screening – September 2021 (Part II)

Luxembourg – Minister for Foreign and European Affairs submits Bill on Investment Screening

On 15 September 2021, the Minister for Foreign and European Affairs has submitted a bill “establishing a national screening mechanism for foreign direct investment that may affect security or public order” for the purpose of implementing Regulation (EU) 2019/452. The Bill concerns investors from third countries that wish to invest in national entities conducting activities in sectors considered to be critical (i.e. energy, defense, etc.). These investors are required to notify their investment to the Ministry of Economic Affairs and may be subject to an investment screening procedure by an inter-ministerial committee at the end of which the investment might be conditioned, allowed or prohibited. On 28 September 2021, the Prime Minister has requested an opinion from the “Conseil d’État” on the Bill.

If you are interested in further information regarding the Luxembourg Bill on Investment Screening, especially in enforcement questions in case of non-compliance with the notification obligation, you can have look at it, in French, here.

Algeria – Preparation of new Investment Law according to Prime Minister

On 16 September 2021 the Prime Minister confirmed that Algeria is preparing a new investment law to improve its business climate and attract foreign investors with the aim of boosting the non-energy sector. The country relies heavily on the energy (oil and gas) sector and has failed to attract foreign investors in other sectors due to various obstacles including bureaucracy. The new law shall, according to the Prime Minister, address the issues among others by creating a one-stop shop.

For further information you might be interested in consulting the press release in French here.

France – List of critical technology sectors extended by Decree of Ministry for Economy and Finance

In order to adapt the French system of foreign investment control to the current developments and challenges of the renewable energy sector, the decree of 10 September 2021 (published on 22 September 2021) on foreign investments in France extends the list of critical technologies (decree of 31 December 2019) to those involved in the production of renewable energy. The decree also provides for changes to the authorisation or prior review procedure.

If you are interested in getting more information about the new rules, you may consult our earlier post here.

EU – First Trade and Technology Council meeting with U.S. and plan to cooperate on Investment Screening

Following the launch at the EU – U.S. summit in June, the Trade and Technology Council (TTC) met for the first time on 29 September 2021 in Pittsburgh.

The TTC’s ten working groups will tackle a diverse set of challenges, including cooperation on technology standards, global trade challenges and investment screening. In the first meeting, the EU and the U.S. to maintain and exchange information on investment screening in order to address risks for national security and public order. The Working Group 8, dedicated to investment screening shall amongst others exchange information on “investment trends impacting security, including strategic trends with respect to industries concerned, origin of investments, and types of transactions” as well as on best practices.

In order to get to know the TTC and especially Working Group 8 on Investment Screening, you may consult the European Commission’s press release here.

Malta – National Foreign Direct Investment Screening Office inaugurated

On 28 September 2021 the Minister for the Economy and Industry inaugurated the National Foreign Direct Investment Screening Office (NFDIS). The latter shall screen foreign direct investments, originating from third countries after notification or ex officio on grounds of security and public order. The sectors considered to be affecting security and public order are amongst others energy, defense, media, health and critical infrastructure. The NFDIS may condition, prohibit or unwind an investment after the screening process. The main purpose of the NFDIS is to implement Regulation (EU) 2019/452.

For more information you may consult the legislative act establishing the NFDIS and a screening mechanism of foreign direct investments in Malta, here.