Bruno Le Maire and Franck Riester recalled in a press release on November 29, 2021 that the two measures to strengthen the control mechanism for foreign investments in France taken in April 2020 have shown their effectiveness in protecting national interests during the health crisis, while preserving the opening of the French market to foreign investors.
However, the current health and economic context does not make it possible to rule out the risks to national security linked to the acquisition of opportunistic minority stakes in listed French companies. The temporary measure lowering the ownership threshold of the voting rights of these companies triggering the control of foreign investment should be extended until 31 December 2022. This extension would apply from 1 st January 2022, with terms of application unchanged.
The framework for the control of foreign investments in France (IEF) established by the Pacte law has made it possible to adapt in a flexible and rapid manner to changes in the economic context and to new security challenges linked to the health crisis. Two measures to strengthen the IEF control system were taken very quickly after the onset of the health crisis. They have been fully effective until today.
Since the end of April 2020, biotechnologies are now one of the critical technologies subject to IEF control. The essential activities for the protection of public health were already controlled before the health crisis, and this long-lasting measure makes it possible to control foreign acquisitions in this more prospective field, where the players are often start-ups with a research activity. and innovative development in the service of public health. As a result, between 2020 and 2021, controls on foreign investment in biotechnology almost doubled.
From the start of the health crisis, the State also took into account the need to protect listed French companies from opportunistic non-European equity investments that could pose threats to national security. Since July 2020, the measure to lower the control threshold for foreign investments in listed French companies, from 25% to 10% of voting rights, has strengthened the State’s vigilance on these companies and ensured the protection of our national interests throughout the health crisis. The current health and economic context does not allow the risks to be ruled out for these listed French companies, Bruno Le Maire, Minister of the Economy, Finance and Recovery, and Franck Riester, Minister Delegate to the Minister for Europe and Foreign Affairs, in charge of Foreign Trade and Attractiveness, asked that this measure to lower the threshold, which was to end on December 31, 2021, be maintained until December 31, 2022. The decree extending this measure will be studied by the Council of State in the coming days, and will apply from January 1, 2022, thus ensuring the continuity of this crisis measure.
The terms of the measure to lower the threshold triggering the control will remain unchanged:
- it does not concern European investors;
- it only relates to investments made in listed companies;
- it is temporary and will end on December 31, 2022;
- it is carried out according to an accelerated procedure: the investor crossing the 10% threshold notifies the General Directorate of the Treasury. The Minister of the Economy, Finance and Recovery then has 10 days to decide whether the operation should be subjected to a more in-depth examination, on the basis of a complete authorization request, which may lead to refusal. that a non-European foreign investor owns more than 10% of the voting rights of a sensitive French company.
The strengthening of the foreign investment control system in France since the start of the health crisis does not call into question France’s openness to welcoming foreign investment and its growing attractiveness for investors in recent years. On the contrary, it constitutes the essential complement to ensure the protection of security and public order when the investment targets require it.
Fully consistent with the European regulation for the screening of foreign direct investments which entered into force in October 2020, the foreign investment control system also contributes to the preservation of European interests. France calls on all the member states of the European Union to adopt a similar mechanism in order to protect the whole of the EU more effectively when foreign investments present risks to security and public order.