New Restrictions on the Freedom of Investment for Foreign Investors – a Practical View
On 17 July 2020 2020, the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) entered into force (AWG-Amendment) , resulting in further tightening of investment controls. The amendment has the aim to implement the EU-Screening-Regulation 2019/452 (EU-Screening-Regulation) and corresponds to Germany’s industrial strategy 2030 (Industriestrategie 2030), which was announced in November 2019 by the Federal Minister for Economics Peter Altmaier (Bundeswirtschaftsminister). The AWG-Amendment is accompanied by an adjustment to the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV), which was hastily initiated in the wake of the COVID-19 pandemic and has since come into force. A second amendment with the aim of harmonizing the AWV with the new amendment to the Foreign Trade and Payments Act (AWG) is expected for summer 2020.
For the corporate transaction industry, the further tightening of the investment review means increasing legal uncertainty. This uncertainty is caused by the absence of clear definitions and procedural regulations, which would allow the parties to reliably anticipate regulatory review processes when developing transaction structures and schedules.
The following paragraphs will discuss the individual modifications to the AWG and AWV in detail and highlight areas of remaining uncertainty, including their likely practical implications.
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