Preventing Unwanted Acquisitions before and after the COVID Crisis

Francesco Salerno; Marco Grantaliano

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Chapter 6 Preventing Unwanted Acquisitions before and after the COVID Crisis

In: International Investment Law and the Pandemic

Authors:

Francesco Salerno

Francesco Salerno
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Marco Grantaliano

Marco Grantaliano
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Type:: Chapter

Pages:: 107–122

DOI:: https://doi.org/10.1163/9789004711204_008

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Abstract

The landscape of foreign direct investment (FDI) screening in the European Union has changed significantly in recent years, with the COVID-19 pandemic acting as a catalyst for accelerated reform. This chapter examines the evolution of FDI screening mechanisms in France, Germany and Italy before and after the pandemic. Prior to 2020, all three countries had already begun to strengthen their FDI screening regimes, driven by growing geopolitical tensions and an awareness of the strategic importance of certain sectors. The COVID-19 pandemic brought these trends into sharp focus, with the European Commission urging member states to strengthen their FDI screening capabilities. This led to a dramatic increase in FDI notifications in all three countries. In Germany, the number of notifications increased from 78 in 2018 to 306 in 2022. Italy saw an even more dramatic increase, from an average of less than 40 notifications per year between 2014 and 2019 to more than 500 in 2022. However, this surge in notifications did not translate into a proportional increase in vetoed transactions. Each country’s approach reflects its specific context: France applies a ‘deterrence doctrine’, Germany maintains a strict sectoral focus, and Italy has gradually expanded its regime. The sectors most affected include defence, telecommunications (especially 5G), semiconductors and critical infrastructure. This focus reflects broader strategic concerns about technological sovereignty and national security that predate the pandemic. While COVID-19 accelerated the strengthening of FDI review mechanisms, the groundwork for this shift was laid earlier. The relatively low number of vetoed transactions suggests that the impact of the pandemic on actual FDI enforcement may have been overstated. Looking ahead, heightened FDI scrutiny is likely to continue as the ‘new normal’ in EU economic policy, reflecting a deeper shift in perceptions of the relationship between foreign investment, national security and strategic economic interests.

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International Investment Law and the Pandemic

Series: Nijhoff International Investment Law Series, Volume: 26

E-Book ISBN:: 9789004711204

Publisher:: Brill | Nijhoff

Print Publication Date:: 01 Nov 2024

Subjects
- International Law
  - International Dispute Resolution & Arbitration
  - International Commercial, Trade & Investment Law

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Chapter 6 Preventing Unwanted Acquisitions before and after the COVID Crisis

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International Investment Law and the Pandemic

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