FDI Rules Soon To Be Tightened

Published date08 January 2021
Subject MatterGovernment, Public Sector, Inward/ Foreign Investment
Law FirmSchoenherr Attorneys at Law
AuthorMr Volker Weiss, Georgiana Bădescu and Cristiana Manea

At the end of December 2020, the Romanian Competition Council (the "RCC") published an updated iteration of the draft Emergency Government Ordinance implementing the FDI Regulation (the "FDI Draft Law"). While the FDI Draft Law is still undergoing the legislative process, it is expected to enter into force soon. As covered here, the new rules will tighten the existing FDI screening, once in force.

Here are the key takeaways:

Parallel filings for merger control and FDI screening

A change of control may trigger merger control ("MC") and/or FDI screening, based on whether the MC turnover thresholds are met or not. While previous legislation did not require a separate FDI filing in case an MC filing was submitted, the FDI Draft Law specifically states that parallel FDI filings will need to be submitted by each foreign investor. Each party is liable for the information provided by it.

The FDI Draft Law also states that MC clearance can only be issued after FDI clearance.

Deadlines

The FDI Screening Commission has a 60-day deadline to review the filing. The review period can be extended if other authorities (such as the Supreme Council for State Defence, "CSAT") need to be consulted. The review period starts as of the date when filing is deemed complete; practically, the authority may revert with additional requests for information which will stay the review period until all information is provided.

Decisions will be communicated to the parties within 45 days from when they are taken.

Sensitive sectors

Sensitive sectors have been amended to mirror the provisions of the EU FDI Screening Regulation.

Essential public services (defined by Law 51/2006 and Government Decision 647/2013) have been removed from the scope of FDI screening. The current main sensitive sectors defined by CSAT continue to be applicable jointly with the new provisions.

Scope of the FDI Draft Law: FDIs and new investments of at least EUR 2m

FDIs are defined as an investment of any kind by a foreign investor1 aiming to establish or to maintain lasting and direct links between the foreign investor and a shareholder, a target company or a part thereof, that benefit from funds provided by the foreign investor to carry out an economic activity in Romania against control rights granted to the foreign investor. Upstream changes of control in an existing investor may also trigger FDI screening.

In addition to FDIs, any new investment in an asset by a foreign investor (including setting up a production...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT