European Commission calls for more protection of critical European assets from foreign investors following corona pandemic

Against the background of increasing concern that strategic assets and infrastructure may be acquired by non-EU, foreign investors, the European Commission on 25 March 2020 issued a Guidance that calls for more action in relation to foreign direct investment control.

The Guidance is a political commitment to preserve EU companies and critical assets, notably in areas of health, medical research, biotechnology and infrastructures that are essential for the security and public order.

• Member States should make full use of existing screening schemes.

• Member States without screening scheme are urged to create it.

• The Commission refers to powers it and Member States have to interfere in transactions that concern strategically important assets.

• Member States are encouraged to consider Golden Shares schemes.

We may see Member States re-evaluating their positions taken, and may take a tougher stance (e.g. by initiating lengthy investigations, or imposing conditions). Foreign investors are well advised to carefully assess the FDI screening obligations and options. We may see more FDI regimes in the EU going forward, and an increasing desire of the Commission to get involved in individual screenings.

A detailed version of this article can be found here.