On 10 April 2019, Regulation (EU) 2019/452 (the “Regulation”) entered into force, establishing a European Union framework for the screening of foreign direct investments (“FDI”). The Regulation does not require EU member states to implement national FDI screening mechanisms or transfer decision-making power with regard to FDI from member state authorities to the European Commission. However, it imposes certain basic requirements on those member states that have domestic FDI regimes and establishes cooperation obligations among the relevant national authorities and the European Commission. In particular, it creates a framework for the exchange of information and opinion between EU member states and the European Commission. In practice, the cooperation obligations set out in the Regulation could impact transaction timelines and risk allocation considerations, in particular because authorities could intervene up to 15 months after the closing of transactions that have not been subject to a national FDI screening regime.
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