The EU Parliament has given the go-ahead for more intensive controls on direct investment in strategic sectors by foreign companies. MEPs today voted in Strasbourg with 500 to 49 votes for a corresponding regulation. However, the EU’s influence on investment control remains limited as the final decision remains with the Member States.
The Regulation requires Member States to inform each other of foreign direct investment in their countries. The EU Commission is involved in an advisory role. A Member State can prevent participation or takeovers if they endanger public order and security. This applies to companies in the area of important infrastructure, technologies, security of supply and access to sensitive information.
Fear of selling technology know-how to China
In the face of strong interest from China, Germany, France and, originally, Italy had called for an EU-wide approach to prevent a sell-out of strategically important companies and the outflow of technology know-how. „The scheme is of course completely neutral and non-discriminatory,“ said EU Trade Commissioner Cecilia Malmström. But it is no secret that in this context often go to China.
However, the new government in Rome and other Member States were critical of a mandatory exchange of information on acquisitions. Finally, in November, the Member States reached an agreement which has now been formally adopted by the European Parliament.
The Federal Ministry of Economics had already decided in December to tighten the German rules for non-European investors. In the case of critical infrastructures such as power supply or health services, the ministry may, if it purchases more than ten percent of the voting rights in a German company, consider prohibiting the sale. Generally, a threshold of 25 percent applies.
