EU Singles Out FDI “Hostile Investors” For the First Time: Russia and Belarus
International Trade and Investment Alert™ | April 29, 2022
The European Commission (the “Commission”) has taken the unprecedented step of singling out two hostile investor countries for Member States to take into account in applying foreign direct investment (“FDI”) screening laws. The direction, which comes on the back of the EU’s already unprecedented sanctions package targeting Russia, Belarus, and individuals linked with Russia’s political elite, advises “greater vigilance” towards investment from Russia or Belarus (regardless of whether it originates with a sanctioned party). Dealmakers should expect (i) longer review timetables, (ii) increased scrutiny of acquirer group structures, potentially extended to limited partners, (iii) the prospect of more ex-officio investigations, and (iv) the rollout of further mandatory FDI regimes across the EU.
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