#ECJ #AG Ćapeta: #EU law does not preclude national legislation which allows for the screening of foreign direct #investment of third country

#ECJ #AG Ćapeta: #EU law does not preclude national legislation which allows for the screening of foreign direct #investment of third country provenance even if implemented via an EU-based company 👉https://t.co/ATb3CgbPxg

— EU Court of Justice (@EUCourtPress) March 30, 2023

Advocate General’s Opinion in Case C-106/22 | Xella Magyarország
Advocate General Ćapeta: EU law does not, in principle, preclude national
legislation which allows for the screening of foreign direct investment of
third country provenance even if implemented via an EU-based company
Such national legislation falls within the scope of the FDI Screening Regulation1 and thus must ensure that individual
screening decisions are justified and comply with requirements of proportionality as required by the Treaty rules on the
free movement of capital and the freedom of establishment
In 2021, the Hungarian Minister for Innovation and Technology blocked the acquisition of a Hungarian company by
another Hungarian company. The former company owns a quarry from which sand, clay and gravel are extracted. In
its decision, the Minister explained that it would be contrary to Hungarian national interests, including the security
of supply of those raw materials, to allow a company with indirect third country (Bermudan) ownership to take
control of such a ‘strategic’ company.
In deciding on the validity of the Minister’s decision to prevent the acquisition, the Fővárosi Törvényszék (Budapest
High Court, Hungary) has, in essence, asked whether EU law permits Hungary to put in place legislation which
restricts foreign direct investment in EU-based companies if such investments are implemented via another EUbased company.
In today’s Opinion, Advocate General Tamara Ćapeta considers first, that foreign direct investments of third
country provenance fall within the scope of the FDI Screening Regulation. That regulation covers investments
of any type by which the third-country investor gains effective participation or control over an EU company.
That also includes investment whereby a third-country investor indirectly gains control over an EU company,
through acquisition of an EU company by another EU company, which is owned by that third country
company.

Read more: https://curia.europa.eu/jcms/upload/docs/application/pdf/2023-03/cp230057en.pdf