GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth and David-Julien dos Santos Goncalves, Linklaters
The regime essentially has two prongs: • a screening process for non-EU/EFTA inves - tors, which applies a 25% filing threshold for all sectors and a reduced 10% filing threshold for transactions in sensitive industries (such as critical infrastructures, cloud computing services or media companies), and a reduced 20% filing threshold for specific high-tech and future technologies as well as certain healthcare target companies; and • a screening process for non-German inves - tors, which applies a 10% filing threshold for transactions in the wider military sector. In addition, asset deals are also in scope of the foreign investment regime. If a transaction rais - es concerns, the transaction may be subject to remedies or, in severe cases, even prohibited. Transactions triggering a mandatory filing requirement are subject to a comprehensive prohibition on gun-jumping, which carries severe criminal penalties for non-compliance. Since the regime has generally become significantly strict - er in recent years and the co-ordination of regu - lators on an EU level has increased, companies engaged in M&A activities should consider the potential applicability of any foreign regime early on and allow for a lengthier approval process. The foreign investment regime has been sub - ject to numerous changes in the past years. The 21st and most recent amendment to the For - eign Trade and Payments Ordinance ( Außen- wirtschaftsverordnung ) entered into force on 23 July 2024, containing – alongside some smaller changes – an expansion of the national dual- use items list (German export list Ausfuhrliste Part I, Section B). Previous changes related to the implementation of the sanctions package adopted by the EU in response to Russia’s inva -
sion of Ukraine, which led to a further change in fine provisions for the financial sector. The 20th amendment continued these developments, but mainly sought to digitise and simplify the administrative procedure by introducing a portal which allows submission of all relevant docu - ments online. The commencement of Phase 1 proceedings under Section 14a of the Foreign Trade and Payments Act ( Außenwirtschaftsge- setz ) is marked by the successful import of the filing to the IT system of the Federal Ministry for Economic Affairs and Energy ( Bundesministe- rium für Wirtschaft und Energie ). Furthermore, key points for a potentially major legislative project, a new Investment Screening Act ( Investitionsprüfungsgesetz ), were discussed within the former federal government. It was supposed to extract the regulations applicable to investment screening from the Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance, restructuring them into a separate law. The legislative process came to a stop with the abrupt ending of the last federal government. According to the coalition agree - ment of the new federal government, it intends to present a revised Foreign Trade and Pay - ments Act soon, aiming to accelerate, simplify and make the review procedures more practical to apply. However, it remains unclear what the revision will look like and whether it will be intro- duced in the shape of the envisioned Investment Screening Act. There are no national rules regarding foreign subsidies, due to the Foreign Subsidies Regu - lation on the EU level.
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