Control of foreign investments, a French passion but also an increasingly European one

In 2023, Bercy examined 309 files. Of the 255 files on which the administration ultimately made a decision, 135 operations were authorized. This does not mean that the others were vetoed: a part may have been abandoned by investors or ultimately did not fall within the broad area subject to prior control by Bercy. A high number (44%) had conditions attached. Since last year, the administration has been working to systematize monitoring of compliance with these conditions, whether based on employment criteria, location of production or intellectual property. A step on which the State has long sinned.

24 out of 27 Member States with a control mechanism

But this French activism is no longer entirely an exception in Europe. For two years, the control of foreign investments has been gaining ground in the European Union. In 2021 only 14 member states had an investment control mechanism. There were 24 of them monitoring the takeovers of technological gems or strategic companies at the end of 2023.
Europe has also adopted an investment control mechanism, which is more akin to a coordination of the systems of each Member State than to an additional level. But it is above all the rise in risks that has pushed European states to strengthen their defenses. “The war in Ukraine, the geopolitical context and the emerging risks it poses have increased the focus on advanced technologies and critical infrastructure. Since then, seven Member States have adopted new mechanisms and ten have extended their existing system,” points out the European Commission in its annual report devoted to the subject.

In Belgium, the control has become operational since July 2023, it has been valid since September 2023 in Estonia and March 2024 in Bulgaria, Ireland must implement its own at the end of 2024. And the last three recalcitrant member states are no longer very far from taking the plunge. Long a haven for investments from Russia, Cyprus has sent a bill to its parliament since last year establishing a control mechanism. The legislative process is also underway in Greece while Croatia is still at the beginning of its process. “All 27 Member States now have a system in place to launch consultations and the implementation process,” welcomes the European Commission.

Conditional authorizations still limited at European level

Of course, not everyone has such a broad scope and the intensity of controls still remains very heterogeneous. But overall, the number of files put through the mill increased with 1,808 authorization requests received by all member states. Among these, 488 takeover operations were notified to the European Commission in 2023, compared to 421 notifications in 2022. And this while the number of foreign acquisition projects fell by 15% in Europe, all sectors combined.

These controls, which first targeted American, British and Emirati investors before Chinese groups, remain mainly the work of a minority of Member States, including France, Germany, Italy and Spain. or Romania. At the European level, conditional authorizations were fewer than in France, with 10% overall of the operations concerned and 4% in Germany, according to German statistics. Only 1% of checks resulted in a refusal.