Foreign Direct Investment Review Regimes in Europe

Foreign Direct Investment Review Regimes in Europe

2 July 2020

Ulrike Binder Partner [phone] [e-mail]	David Harrison Partner [phone] [e-mail]	Jean-Maxime Blutel Counsel [phone] [e-mail]
Philipp Studt Senior Associate +32 2 551 59.57 [e-mail]	Stefan Glasmacher Associate [phone] [e-mail]

Agenda

• Part A: Changing Landscape
• Part B: Scope of Review
• Part C: Key Jurisdictions and Case Studies
• Part D: Recent Trends, Remedies and wider M&A implications

Changing Landscape

Growth in FDI review worldwide

• Marked increase in importance and frequency of foreign investment review of transactions
• Increased scrutiny of investment from countries with perceived “hostile”/closed political regimes or where ultimate ownership is not transparent
• Wider interpretation of national interest
• Covid-19 as an additional catalyst
• Arms race to introduce new rules or strengthen existing regimes
• Established regimes - e.g. USA, Canada and Australia
• Europe catching up - e.g. Germany, France, UK plus EU
• 9 of top 10 economies introduced new/modified rules in last 2 years
• Protectionism, trade wars, safeguarding key assets/technology, vulnerability of supply chains, Brexit…

Development of FDI regimes

• Recent trends
• Recognition that in many jurisdictions, current system is not geared towards significant intervention (e.g. rise of Chinese investments in the mid-2010s or in response to Covid-19)
• Ramping up of enforcement within existing structures
• Creative “sticky tape” measures to fill enforcement gaps
• Reform of existing regimes and introduction of new regimes to increase governments’ ability to intervene
• Increasingly tough EU stance
• Commission Guidance to Member States on FDI (25 March 2020)
• Commission White Paper on foreign subsidies (17 June 2020)
• Impact on UK post-Brexit?
• China, other jurisdictions?