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ARTICLE · 09 JANUARY 2019

Germany Tightens Rules On Foreign Direct Investment

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On 19 December 2018, the German government adopted the 12th regulation for the amendment of the German Foreign Trade Regulation.

European UnionGovernment, Public Sector
Axel Vogelmann
Axel Vogelmann
Markus Käppler
Markus Käppler
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Key Points

  • On 19 December 2018, the German government adopted the 12th regulation for the amendment of the German Foreign Trade Regulation. The amendment, which came into force on 29 December 2018, expands the ability of the German Ministry for Economic Affairs and Energy to prohibit certain direct or indirect acquisitions of shareholdings in German companies by foreign investors if the acquisition poses a threat to the security of the Federal Republic of Germany.
  • The amendment lowers the threshold for screening and prohibiting acquisitions of shareholdings in companies that carry out activities that are defined as being relevant for the security of the Federal Republic of Germany from 25 percent to 10 percent. The new 10 percent threshold applies, in particular, to acquisitions of companies in the defense sector and operators of security-relevant civil infrastructure. Based on statements of the German Ministry for Economic Affairs and Energy during the last

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