Foreign investment in sectors for the future now to be subject to prior authorization

Attractiveness – Foreign investment in France – Communiqué issued by the Ministry of the Economy and Finance (excerpts)

Paris, 19 February 2018

(…) The Prime Minister has announced the future expansion of the 2014 decree on foreign investments subject to prior authorization, which already requires foreign investors wishing to invest in a company to obtain the Economy and Finance Minister’s authorization, for certain sectors.

Until now, the strategic sectors targeted by the decree have concerned, inter alia, the gambling industry (excluding casinos), private security services, counter-terrorism, wiretapping, IT, national security secrecy, cryptology, weapons, energy, public health, transport and telecommunications.

Under the PACTE [Action Plan for Business Growth and Transformation], this monitoring and protection mechanism for strategic companies is going to be expanded with a battery of measures designed, precisely, to protect French companies. China and the United States have been doing this [for their companies] for a long time.

To that end, the 2014 decree will soon be extended to include key artificial intelligence technology, the space industry, data storage and semiconductors. It will provide for a mechanism to monitor, through regular external audits, commitments made when an investment is authorized with, in the event of non-compliance, the possibility of these being subject to dissuasive penalties.

An economic grouping, which will bring together the members of the Defence and National Security Council, will be tasked with monitoring and anticipating risks, particularly if a stake is being acquired in a company’s capital or in the event of a hostile takeover. Bpifrance and the Agence des Participations de l’Etat [Government Shareholding Agency] will release funds to protect French companies, especially “nuggets” likely to be targeted by hostile acquisitions.

The PACTE bill will be presented in the Council of Ministers on 18 April 2018./.

Published on 23/02/2018

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