Germany is planning to further tighten its FDI regime and screen investments by investors from outside the EU more closely. More acquisitions of German companies will be subject to a notification obligation, and a standstill obligation will prohibit an execution of the deal before the Ministry gave his approval, according to a draft amendment to the Foreign Trade and Payments Act (“AWG”), recently adopted by the German Federal Cabinet (press release here).
Comparable to filing obligations in competition law, FDI filings will become a very important part of acquisitions, depending on a continuously growing variety of case groups affected by the business of the German target company.
This draft is the first step of a massive amendment of the current German FDI regime. The main purposes of the current draft are:
- initializing the establishment of a European cooperation mechanism (following the rules in EU Regulation 2019/452) and by that deepening the European perspective of the German FDI regime;
- lowering the intervention threshold for state measures in the field of foreign trade; and
- implementing a standstill obligation until the end of the official proceeding for all acquisitions being subject to a filing obligation pursuant the Foreign Trade Ordinance (“AWV”).
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