Romania Plans To Tighten Its Foreign Investment Screening Rules

• Published date: 22 September 2020
• Subject Matter: nti-trust/Competition Law, Government, Public Sector, Inward/ Foreign Investment, Antitrust, EU Competition
• Law Firm: Schoenherr Attorneys at Law
• Author: Mr Volker Weiss, Georgiana Bădescu and Cristiana Manea

The screening of foreign direct investments (FDIs) has been a hot topic for some time now across CEE (as also covered here). Several jurisdictions have adopted stricter measures of scrutiny allowing for the vetting of transactions potentially posing security risks.

In line with this trend, the Romanian Competition Council has put forward new draft legislation aimed at tightening the existing FDI screening rules. This draft is subject to public debate until 6 October.

Context

Under the current rules foreign (and domestic) investments in sensitive sectors would fall under the scrutiny of a state defence authority, directly subordinated to the President of Romania However, this scrutiny is limited to investments leading to a change of control and to a limited number of sectors.

The new FDI regime will broaden the scope of the investment screening.

New filing requirements

Under the new FDI regime, all transactions that meet an investment value in excess of EUR 2m must be notified to the Romanian Competition Council if they occur in or have an impact on any of the following strategic areas:

• infrastructure in the following sectors: energy, transport, water management, healthcare IT&C, media, data processing or storage, aerospace, defence electoral or financial infrastructure and sensitive facilities access to land and real estate of critical importance for the use of such infrastructure;
• essential public services water supply and sewerage; sanitation and waste management production, transport, distribution and supply of thermal energy in a centralised system; public lighting; land use planning and urbanism; local/county public transport;
• access to critical technologies and dual-use products, including artificial intelligence robotics, semiconductors, cybersecurity, aerospace, defense, chemical technologies, energy storage, quantum and nuclear technologies, as well as nanotechnologies and biotechnologies;
• access to raw materials, health security or food security;
• access to important information concerning the protection of Romania's security and sovereignty, its legal order, including investments that involve large-scale actual or potential access to personal data of Romanian citizens or Romanian residents;
• ability to significantly influence public opinion through information distributed via mass-media (mass-media entities/online outlets will be subject to certain additional rules aimed at FDI transparency);
• critical (or potentially critical) IT&C...