In its judgment of 13 July 2023 in Case C-106/22 Xella, the ECJ ruled that the objective of ensuring the security of supply to the construction sector, in particular at the local level, with respect to basic raw materials such as gravel, sand and clay cannot justify a restriction on the freedom of establishment. The judgment is the first time the ECJ has taken a ruled on the scope of Regulation (EU) No 2019/452 (EU-Screening-Regulation). In addition, it tests the interference with the freedom of establishment by a national investment control regime against established, strict criteria.

On July 12, the first of three instruments of the Foreign Subsidies Regulation (FSR) entered into force. As of this date, the Commission is entitled to initiate investigations into third country subsidies that distort the internal market either on its own initiative or based on a complaint by a third-party (so-called ex officio tool). Later this year, the notification-based instruments for mergers and bids in procurement procedures will enter into force on October 12. Then, companies exceeding the thresholds set by the FSR in the relevant market situations will be required to notify financial contributions granted by third countries to the Commission. Just in time for the entry into force of the ex officio tool, the Commission adopted the Implementing Regulation on July 10, which provides procedural information but also has a direct impact on the scope and interpretation of the FSR. The Commission also responded to the significant criticism raised by companies and associations, particularly with regard to the high administra-tive burden triggered by the FSR.

“We want a competition law with claws and teeth”, Minister for Economic Affairs and Vice-Chancellor Robert Habeck promised last summer. Yesterday, the German Bun-destag took a major step towards fulfilling that promise by passing a new reform bill – the so-called Competition Enforcement Act (CEA). At the heart of the new provisions stand significantly increased powers of intervention for the German Federal Cartel Office (FCO) to remedy distortions of competition following a sector inquiry. Previous-ly, such inquiries only served as a means for the FCO to form the empirical basis for its future case practice. It did not, however, permit the authority to directly intervene against individual companies or anti-competitive conditions. Will the greatly bolstered instrument of the sector inquiry – long dismissed by many as a paper tiger – live up to Mr. Habeck’s bold promise?

After long and apparently tough negotiations, EU Member States have agreed on another, eleventh package of sanctions against Russia. It entered into force on 24 June 2023. The declared aim of the new measures is in particular to prevent the circumvention of the broad range of restrictive measures already in place. But the package also includes further expansions of these measures. We highlight the most important changes below.

On 17 May 2023, the European Commission has published proposals of significant reforms of the EU Customs Union, describing them as ‘the most ambitious and comprehensive reform of the EU Customs Union’ since its inception 1968. The reforms will create a data-driven vision for EU customs and simplify and enhance the customs procedures. According to the Commission’s press release, the reforms respond to the current pressures under which EU customs operates, including a huge increase in trade volumes especially in e-commerce, a fast-growing number of EU standards, unnecessarily complex customs procedures and shifting geopolitical realities and crises. The reforms are promised to make the customs framework fit for a greener, more digital era and contribute to a safer and more competitive Single Market and to reduce costs significantly. The Union Customs Code will be repealed and a new UCC introduced with a complete rearrangement of articles. The reform is awaited, as especially the national customs administrations wish for cost savings and streamlined and simple processes through digitalization.

BLOMSTEIN represents Fastned in review proceedings concerning the award of contracts for the construction, maintenance and operation of fast charging stations at serviced rest stops on the German federal highways. The contract had been awarded to companies of the Tank & Rast Group by the Autobahn GmbH of the German Government without conducting a competitive public procurement procedure.

Over recent months, one of the most highly debated issues in the field of international trade law has been the expected introduction of a novel instrument of trade restrictions – the so-called Outbound Investment Screening. In Berlin, Brussels and Washington DC, governments and legislators are currently engaged in discussions over the exact nature of the tool, which seeks to both monitor and – under certain circumstances – restrict investments by Western companies in third countries (in particular China). While reports suggest that a Presidential executive order on this subject is imminent in the US, the EU has now equally taken a further step to clarify its intentions through a newly published position paper, which forms part of the new “European Economic Security Strategy”. The document entitled An EU approach to enhance economic security begins to illustrate how the European Commission intends to conceptualise the instrument for the EU single market, with European Commission representatives announcing concrete proposals for the end of the year. The position paper’s contents are also likely to have significant influence on the ongoing reform attempts by the German Ministry for Economic Affairs and Climate Action.

Artificial Intelligence (AI) is advancing so quickly that experts around the world are warning against the risks of unregulated deployment. Meanwhile, the European Commission (Commission) is trying to catch up by accelerating its plans to regulate AI. After publishing its first draft of an AI Act Proposal in April 2021, the Council adopted its common position (General Approach) on 6 December 2022. Since then, the Proposal has made great strides: the committee work in the European Parliament was completed on 11 May 2023, and the Proposal was adopted already a month later with a clear majority: 499 votes in favor, 28 against and 93 abstentions. Next up will be trialogue negotiations between the European Parliament, European Commission and the Council. If this pace is maintained, the AI Act could be passed before the end of the year, which would make it the world’s first comprehensive AI law.

Sustainability and competition law has been one of the hottest topics among competition authorities and regulators in recent years. The German Federal Cartel Office (FCO) has always stressed that it is open to give informal guidance on sustainability initiatives. Yesterday, it has proven that it takes this approach seriously and does not stand in the way of sustainability initiatives. It has published a press release that it currently sees no reason for a more detailed examination of the German Initiative on Sustainable Cocoa “Forum Nachhaltiger Kakao e.V.” (Kakaoforum). According to the FCO, there have been no indications that the initiative would incur a clear risk of a restraint of competition. The Kakaoforum is a joint initiative made up of representatives of the public sector, companies in the cocoa and chocolate industry, a large part of the German food retail trade and international NGOs.

BLOMSTEIN assists Goodwin with regard to the foreign direct investment law aspects of Summit Partners’ sale of shares in ELATEC group. The shares will be acquired by SGT German Private Equity, a subsidiary of the renowned private equity firm SGT Capital. With a transaction value estimated at approximately EUR 400 million, the deal is expected to close later this year, pending the fulfillment of customary regulatory approvals.