The 12th package of EU sanctions against Russia, aimed at further increasing economic pressure in response to Russia's continued aggression towards Ukraine, entered into force on 19 December 2023. It includes additional listings of Russian individuals and companies as well as new trade restrictions, such as the long-awaited import ban on Russian diamonds and prohibitions related to enterprise management software. Of particular practical relevance are additional measures against the circumvention of long-standing sanctions, including a new obligation for EU exporters to contractually prohibit the re-export of certain sensitive goods to Russia.

The EU Commission (Commission) consulted stakeholders during the summer to evaluate the Regulation (EU) No 2019/452 (EU-Screening Regulation) and recently published the survey’s results. The consultation is part of the EU’s ongoing evaluation of the current FDI screening framework and follows the recent release of its third "Annual Report on the screening of foreign investments into the Union", as we noted in an earlier briefing. As the Commission is expected to formally propose revisions to the EU Screening Regulation by the end of 2023, the survey’s results highlight the various stakeholders’ views on the framework, which are likely to inform the upcoming changes. Key findings include the following:

In Summer 2023, the Act in Support of Ammunition Production (ASAP) was adopted. ASAP marks the final stage of a three-track plan for the delivery and joint procurement of ammunition for Ukraine. While the first two tracks concerned the intended supply of 1 million rounds of stock ammunition to the Ukraine (track 1) and the promotion of joint procurement by EU member states (track 2), ASAP aims to strengthen the supply-side by increasing the European defense industry’s production capacities of ammunition and missiles (track 3). In contrast to the first two tracks, which responded to an immediate need for military supply following the Russian invasion of Ukraine, ASAP focuses on longer-term objectives.

The German Federal Ministry for Economic Affairs and Climate Action (BMWK) released its report on the evaluation of the current legal framework for the screening of foreign investments (“Evaluation of the First Act Amending the Foreign Trade and Payments Act as well as of the 15th - 17th Ordinance amending the Foreign Trade and Payments Ordinance”) in September this year. The European Commission (“Commission”) followed shortly thereafter and released its third “Annual Report on the screening of foreign investments into the Union” on 19 October 2023. Both underline that there is an ongoing need for an effective screening of foreign investments, especially during times of crisis, such as Russia’s war of aggression against Ukraine.

On 12 October 2023, the notification and declaration obligations of the Foreign Subsidies Regulation (FSR) will finally start to apply. The new review procedures for M&A transactions and bids in public procurement procedures are aimed to address distortions caused by foreign subsidies and thus ensure a level playing field for all companies operating in the EU Single Market. While the European Commission has recently provided further clarity on some of the procedural aspects of the FSR (see our latest briefing), there is still significant uncertainty about the actual compliance requirements for companies. This briefing aims to alert businesses to the pitfalls to watch out for and to provide practical guidance on how to successfully navigate these new regulatory waters.

On August 9, 2023, the President of the United States, Joe Biden, signed an Executive Order on Addressing United States Investments In Certain National Security Technologies And Products In Countries Of Concern. The Executive Order is the first step towards a so-called outbound investment control, which is to complement the export control and inbound investment control of the U.S. Can the U.S. outbound investment control serve as a model for the EU?

BLOMSTEIN advised Helsing, as it did on the previous Series A financing 2021, together with YPOG on the recent Series B financing round with a total volume of EUR 209 million. BLOMSTEIN supported with regard to investment control law. A big thank you goes to Helsing as well as to the entire YPOG team for the trust placed in us!

CELIS Institute invited BLOMSTEIN partner Roland M. Stein to join the Institute as Deputy Director. This appointment marks yet another milestone in the yearlong collaboration between CELIS Institute and BLOMSTEIN, further strengthening their shared commitment to advancing strategic dialogue amongst various stakeholders on foreign direct investment policy and economic security.

On 21 June, Brazil’s competition authority (CADE) issued an unprecedented decision relating to sustainability agreements when approving a joint venture (JV) between leading traders of agricultural commodities worldwide (Cargill, Louis Dreyfus, ADM). In the absence of specific guidelines pertaining to horizontal cooperations, CADE seized the moment presented by the transaction to establish more comprehensive guidance as to its view on sustainability agreements in the context of B2B sector-specific data management systems (see press release here).

Any company who has recently applied to the German Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle – BAFA) for an export licence or any other sanctions-related enquiry has had to reckon with long processing times. To speed up these processes, BAFA has, as announced on 1 August 2023, introduced five new and amended several other general export licences (Allgemeine Genehmigungen – AGGs) as well as implemented further procedural changes.