NATIONAL-LEVEL SCREENING MECHANISMS IN THE EU FOR FOREIGN INVESTMENTS

Source: MERICS and Rhodium Group research

No national investment screening mechanism in place or planned

1. Belgium
2. Bulgaria
3. Croatia
4. Cyprus
5. Estonia
6. Greece
7. Ireland
8. Luxembourg
9. Malta
10. Slovakia
11. Slovenia

Group 1

1. Austria: The Ministry of Economic Affairs has to review and approve acquisition of 25 percent or more of a controlling interest by non-EU, non-EEA and non-Swiss persons in an Austrian enterprise engaged in “protected sectors” including defense, telecommunications, energy, water supply, hospitals, traffic infrastructure and education.
2. Finland: Ministries of Trade/Industry and Defense approve foreign investments. If they consider “important national interests” to be jeopardized, ministries defer the decision to the Council of State.
3. Poland:  In addition to approval requirements in specific sectors, foreign investors planning to buy a stake of 20 percent or more in a so-called strategic Polish company need approval from the Ministry of State Treasury. The Council of Ministers maintains a list of strategic companies that can be amended by regulation.
4. Portugal:  Portugal maintains a general safeguard clause in its investment regulation that requires an assessment of compliance with statutory requirements and preconditions established under Portuguese law for non-EU investments that could affect public order, security and health.
5. Romania:  Romania is listed in several EU documents as not having a screening mechanism in place, but the Supreme Defense Council can review referred mergers and acquisitions for potential threats to national security after notification from the Romanian Competition Council
6. Spain:  Foreign investors need to obtain prior approval by the Council of Ministers in defense sector, gambling, broadcasting and air transporation. The Council of Ministers can also intervene on an ad hoc basis if investments affect, or may affect, public powers, public order, security or public health-related activities.

Group 2 (Considering)

1. Czech Republic: Considering setting up a dedicated mechanism or strengthening investment review.
2. Denmark: Considering setting up a dedicated mechanism or strengthening investment review
3. The Netherlands: The Dutch government is considering adopting a sector-specific foreign investment control regime. Debates about and legislative proposals for the telecommunication sector have advanced the most, but other sectors involving vital infrastructure might follow
4. Sweden:  Considering setting up a dedicated mechanism or strengthening investment review

Group 4

1. France: In November 2018, a new decree in France expanded the list of sensitive sectors in which foreign investments are subject to review and approval by the Ministry of Economy. The list now includes areas such as cybersecurity, artificial intelligence, robotics and semiconductors as well as space operations. Further legal changes are expected in 2019 (with the relevant law, “Plan d’Action pour la Croissance et la Transformation des Entreprises,” currently still under review)
2. Germany: In July 2017, the German federal government adopted amendments to its Foreign Trade and Payments Ordinance in order to allow for wider control of foreign corporate takeovers with a focus on critical infrastructures. In December 2018, German authorities further changed investment screening rules so as to review any transaction in which a non-European foreign company plans to buy more than ten percent of a German firm in sectors such as defense, critical infrastructures and the media.
3. Hungary: In October 2018, the Hungarian government adopted new regulations that require investing companies with non-EU shareholders to obtain government approval before acquiring assets in national security-related areas, including dual-use technologies and critical infrastructures.
4. Italy: In October 2017, Italy’s cabinet passed a decree to strengthen disclosure requirements for foreign investors acquiring significant stakes in Italian companies and expanded the “golden powers,” under which transactions in certain strategic sectors can be vetoed, to “high-tech” companies, such as those dealing with data storage and processing, artificial intelligence, robotics, semiconductors, dual-use technology, and space/nuclear technology.
5. Latvia: In March 2017, Latvia strengthened its investment policy related to national security, establishing a mandatory review mechanism for transfer of ownership in companies and facilities “with significance to national security,” or in national and European critical infrastructures.
6. Lithuania: In January 2018, the parliament adopted an updated version of the “Law on Enterprises and Facilities” to require notification and facilitate vetting of investments in certain economic sectors or in certain protected zones.
7. UK. : In June 2018, the UK government expanded its powers to review M&A transactions. The “share of supply test” was amended and turnover thresholds for review have been lowered from GPB 70 million to GPB 1 million for military, dual-use and advanced technology (computing, quantum technology) sectors. A significantly broader and dedicated national security M&A regime is expected to come into force in 2019.