Disclaimer: This translation is a working translation only and is not legally binding.
6. What are the possible outcomes of the screening procedure?
At the end of the first phase of the screening procedure, the investor will receive one of
three possible answers from the administration:
1. Prior approval by the Minister is not required under foreign direct investment
screening regulation as not all of the three conditions for screening (see Question 2)
have been met.
2. Prior approval by the Minister is required under foreign direct investment
screening regulations and the transaction is authorised without conditions.
3. Prior approval by the Minister is required under foreign direct investment
screening regulations and further investigation is needed to determine if
conditions are required to safeguard national interests.
In the third instance, the Minister for the Economy gives notice to the investor that a second
phase of investigation will begin, to be completed by the regulatory deadline (see
Question 5). The second phase has three possible outcomes:
1. The investment is authorised by the Minister without conditions.
2. The investment is authorised by the Minister subject to conditions in order to
safeguard national interests. Any such conditions must be justified by and
proportionate to the need to protect public order, public security and national defence
interests.
Conditions are primarily designed to (Article R.151-8 of the Monetary and Financial
Code):
a. ensure the long-term survival and continuity of sensitive activities on French
territory and protect any information related to these activities ;
b. preserve and protect the skills and know-how of the French company ;
c. adjust the French company’s internal organisational and governance
arrangements, as well as how the investor’s rights in the target French
company are exercised ;
d. define procedures to share information between the various investment
stakeholders and the government.
The Minister may also make the authorisation conditional on the transfer of a
percentage of the acquired capital, or all or part of a business line operated by the
target French company, to an entity separate from the investor and approved by
the Minister.
Conditions are discussed and agreed upon with the investor prior to notification of
the Minister’s decision. The investor must comply with the conditions for as long
as it exercises control over the French target company or for a specified length of
time. In certain cases, conditions may be modified at the investor’s request or
Minister’s initiative in accordance with the provisions set out in Article R.151-9 of
the Monetary and Financial Code.
3. The investment is not authorised by the Minister. Refusal may or may not be
explicitly communicated; it is implied if no response is given within the prescribed
regulatory deadline of 75 business days. The grounds on which authorisation may be
refused are strictly limited by regulations (Article R.151-10 of the Monetary and
Financial Code), namely if there are doubts about the investor’s character or if it is not
possible to prescribe sufficiently robust conditions to protect national interests.
Any decision taken by the Minister can be appealed before the Administrative Court of Paris
within 2 months.
5
December 2022