CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
rights or proprietary rights) or obtains control (which is relatively broadly defined) over the target subject to the Croatian FDI regime, as well as with respect to concessions and public-private partnerships involving foreign investors. The FDI Act provides that the list of target entities subject to the FDI regime will be determined by differ - ent governmental authorities, instead of providing for criteria on the basis of which investors would need to self-assess as to whether investment into such entity would be considered as falling under the Croatian FDI regime. According to the feedback received from the Ministry of Finance, the FDI Act will not be fully applied until the list of target entities has been determined. Screening must be performed before closing the transaction (or before being awarded a concession/ signing a concession agreement or signing the public- private partnership agreement). The process can be summarised as follows: • the process must be initiated by either the foreign investor or the target subject to the Croatian FDI regime, by filing of the application for the approval of foreign investment with the Ministry of Finance; • the Ministry of Finance performs a preliminary administrative review (to determine that the filing is complete), which must generally be completed within 30 days of the filing (but may be extended to a maximum of 60 days); • complete notification is then forwarded to the Commission and the National Contact Point for the purpose of notification of the EU Commission and other EU member states – alternatively, the Ministry of Finance may reject the approval of the investment at this stage if it finds that the foreign investor (or responsible individuals within the foreign investor) has been subject to sanctions and international measures, or if there is suspicion that these entities/persons meet the criteria for place - ment on the sanctions list; • the Committee must prepare its report on the investment’s impact on security and public order within 90 days from the date of receiving a com - plete filing (noting that this deadline may be extended for an additional 30 days); and
• the final decision is rendered by the Ministry of Finance on the basis of the Commission’s report within the deadline of 120 days (which may be extended up to maximum of 150 days) from the date of receiving a complete application filing. The rulings of the Ministry of Finance will not be sub - ject to appeal, but they may be challenged by initiating an administrative dispute before the High Administra - tive Court of the Republic of Croatia. 7.2 Criteria for National Security Review See 7.1 Applicable Regulator and Process Overview . In addition, the criteria for identifying the targets sub - ject to the FDI regime (to be performed by different governmental authorities for the purpose of preparing the list of targets subject to the FDI regime) will be determined under the implementing regulation, which is still to be adopted by the Croatian government. 7.3 Remedies and Commitments The Croatian FDI Act does not provide for the pos - sibility of remedies or commitments (in essence, the foreign investment may either be approved or denied). According to the feedback given by the competent Ministry during the public consultations process, the possibility of determining remedies and/or commit - ments in the course of the screening procedure has not been implemented, as it would not serve the pur - pose of the law whose aim is to protect the security and national order of Croatia and the EU. 7.4 National Security Review Enforcement Under the FDI Act, the Ministry of Finance is author - ised to revoke approval and order divestment within nine months (which may be extended for up to six months in exceptional cases, and on the basis of a reasoned request). During the divestment period, the investor’s shareholder rights would be restricted. The described remedy is also applicable in case of failure to notify.
8. Other Review/Approvals 8.1 Other Regimes
In addition to the foreign investment screening regime (described in 7. Foreign Investment/National Secu-
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