LEGAL PRACTICES: EUROPEAN UNION - FOREIGN DIRECT INVESTMENT - CONTROL - TRANSACTIONAL PRACTICE

Foreign direct investment screening in Europe: A comparative perspective on differences and commonalities within Europe

The authors provide a comparative perspective on foreign direct investment (“FDI”) screening in Europe in light of the EU’s new regulation, Regulation (EU) 2019/452. They explain the key drivers behind FDI screening and offer an analysis of what it implies at a European level. The article further delineates the impact that FDI screening has on transactional practice areas and provides a comparative overview of the concept of “foreign direct investment.” In this regard, the article gives practical guidance for clients and their advisers as to how to deal with an area of law in flux with several ambiguities.

I. Background: Foreign direct investment screening in Europe [1] 1. The Covid-19 pandemic has raised systemic concerns in Europe about the “sell-off” of strategic industries. As such, it has acted as an accelerant for the development of many new foreign direct investment (“FDI”) laws, including the tightening of pre-existing FDI laws; albeit it builds on protectionist sentiments that have been emerging over the past years. [2] Indeed, a number of EU Member States have long had laws in place to enable FDI screening. However, what has traditionally been a national matter has now also gathered pace at an EU level. On 11 October 2020, Regulation (EU) 2019/452 (the “EU FDI Regulation”) [3] has entered into full effect. It is worth noting that the issuance of the EU FDI Regulation predates the

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Authors

  • Covington & Burling (Brussels)
  • Covington & Burling (Frankfurt)
  • Covington & Burling (Frankfurt)

Quotation

Peter D. Camesasca, Horst Henschen, Martin Juhasz, Foreign direct investment screening in Europe: A comparative perspective on differences and commonalities within Europe, November 2020, Concurrences N° 4-2020, Art. N° 96871, pp. 268-272

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