Germany: Recent Amendments on Review of Foreign Investments

July 17, 2017

The German government agreed last week to amend the German Foreign Trade and Payments Ordinance (AWV) to address potential concerns raised by foreign investments in certain sectors of the German economy. The amended AWV identifies specific sectors of the German economy in which foreign investments may raise a threat to German public order or security. Moreover, the amended AWV provides for: (i) a new notification obligation of transactions involving foreign investors; (ii) an extension of the current foreign investment review timeframe; and (iii) an extension of deadlines for potential governmental interventions. The amendments are not yet in effect but will become effective within the coming days upon the official publication thereof.

Existing German law already permits the German government to prohibit transactions in which foreign investors will acquire at least 25% of the voting rights in a German entity if the acquisition constitutes a threat to public order or security. Additional information on the current German foreign investment framework is available in our prior Dechert OnPoint “Recent Developments on Review of Foreign Investment into Germany: Is the German Government Tightening the Rules?” from November 2016. The amended AWV provides additional clarity on what non-EU or EFTA investors may be considered to be a threat to German public order or security and also spells out additional requirements that must be followed by parties to such transactions.

Read the full article here.