OVERVIEW
AWV)
The 17th Amendment Ordinance to the German Foreign Trade and Payments Ordinance (
AWV) continues the long-standing trend towards more control rights for the German Federal Ministry for Economics and Energy (
BMWi) with regard to investment control under foreign trade law. In addition to adapting to the requirements of the EU Screening Directive, the scope of application of the sector-specific and cross-sectoral review processes was extended and tightened.
With regard to the primarily defense- and military-related and
sector-specific investment control, the
were extended or newly defined respectively. Thus,
inter alia, the development, production and modification of all (as opposed to only specific goods so far) goods in Part I Section A of the export list now triggers a sector-specific investment control. Furthermore, it was also clarified that even if a German company
The latest amendment of the German FDI rules brings mandatory reviews for 16 additional "critical activities" – but also some welcomed clarifications. The amendment entered into force.
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On January 22, 2021, the German Federal Ministry for Economic Affairs and Energy has published the anticipated draft revision of the German Foreign Trade and Payments Ordinance to align the scope of review more closely with the EU Screening Regulation. The Ministry launched a consultation process the same day and is giving the associations and companies potentially affected the opportunity to discuss their views and propose further revisions.
Following a number of revisions of the German foreign direct investment rules throughout 2020 (including a COVID-19-related broadening of the scope of review, the introduction of a standstill obligation outside of defense deals, and criminal sanctions for non-compliance), the German Federal Ministry for Economic Affairs and Energy (
(only available in German).
For M&A transactions involving German target companies directly or indirectly via the acquisition of a foreign group, the draft contains some good and bad news:
Future deals will be made more difficult by the fact that the catalogue of companies whose acquisition is subject to notification will be
significantly expanded once again.
Moreover, in addition to the acquisition of voting rights, the acquisition of
control and management rights can now, for the first time, also trigger a notification or an
ex officio review. Furthermore, the draft confirms that
share increases beyond existing stake-holdings are subject to foreign investment control, even if the thresholds were already exceeded before the transaction.