Volvo Personvagnar AB, Kuka,
Aixtron, OSRAM Licht, Daimler, Saxo Bank,
the harbour terminal in Zeebrugge, Spain’s Noatum Port,
Italy’s Vado Ligure Port or the Port of Piraeus –
the list of discussed controversial company takeovers and
acquisitions of major stakes in Europe is getting longer and longer.
The political will in the European Union (EU) and its Member States
is growing to more actively screen, control, or even prevent
investments flowing into Europe.
Third country investments stirring
controversies archetypically share three common characteristics. The
target companies typically operate in “politically sensitive
areas”, the owner structure of the immediate buyer is typically
hard to identify, and not very clear, and the foreign purchaser may
well attempt to circumvent rules for non-EU investors through an
intermediary company resident in the EU.
Even though more or less controversial
takeovers occur on a regular basis, opinion varies amongst the EU
member states on whether or not investment screening is a priority.
Only 13 out of 28 Member States have an investment screening
mechanism in place, signalling that the majority of member states do
not consider screening important. On the other hand, some of the
member states have recently tightened their grip on foreign
investment. The instruments vary greatly in scope and function and
the EU as a whole – in contrast to all G7 countries and China –
is still without any common mechanism to review foreign investment.
Responding to a political proposal by
France, Germany, and Italy, and after the European Parliament
requested a legislative initiative, the European Commission tabled a
for a Regulation establishing a framework for screening of foreign
direct investments into the European Union in September 2017.
In 2018, the proposal was negotiated and an EU institutional
trialogue was conducted in late 2018. EP vote in plenary is scheduled
for 14 February 2019.
The regulatory proposal has received
rather mixed responses. From cautious embraces or indifference by
some Member States to outright rejection by others. The apprehension
of alienating foreign investment with an all too strict review
mechanism is palpable. Among other stakeholders, such as businesses
and trade unions, reception of the EU’s proposal also varies. Some
fear a gradual renunciation of a liberal, open-door economic policy
and turn to protectionism. Others, in contrast, draw the picture of a
slowly exsanguinating European economy, know-how and innovative power
silently flowing to other parts of the world.
Indeed, the list of concerns is long.
Irrespective of political preferences, a screening mechanism
potentially blocking or restricting investment pose a challenge to EU
business. Considering the political dimension, foreign investment is
not seldom viewed sceptically as it may allow foreign governments to
wield political influence in Europe. Moreover, a sense of inherent
unfairness is in the air since there is often a lack of reciprocity
in foreign direct investment (FDI) policy for EU companies investing
abroad. In a nutshell, EU-harmonization of FDI-screening is a
multi-facetted challenge, with consequences in political strategical
level as well as on the level of multinational business.
From 07 to 8
March 2019, thirty international experts from Europe and its mayor
trading partners will come together and debate this multi-facetted
challenge in an international conference on “A
Common European Law on Investment Screening” in
Prior this event
we have invited conference speakers and, additionally, some eminent
scholars to take sides in this controversy in an online symposium.