YSEC Yearbook of Socio-Economic Constitutions 2020 : A Common European Law on Investment Screening (CELIS)

This book presents the very first, interdisciplinarily grounded, comprehensive appraisal of a future “Common European Law on Investment Screening”. Thereby, it provides a foundation for a European administrative law framework for investment screening by setting out viable solutions and evaluating their pros and cons. Daimler, the harbour terminal in Zeebrugge, or Saxo Bank are only three recent examples of controversially discussed company takeovers in Europe. The “elephant in the room” is China and its “Belt and Road Initiative”. The political will in Europe is growing to more actively control investments flowing into the EU. The current regulatory initiatives raise several fundamental, constitutional and regulatory issues. Surprisingly, they have not been addressed in any depth so far. The book takes stock of the current rather fragmented regulatory approaches and combines contributions from leading international academics, practitioners, and policy makers in their respective fields. Due to the volume’s comprehensive approach, it is expected to influence the broader debate on the EU’s upcoming regulation of this matter. The book is addressed to participants from academia as well as to representatives from government, business, and civil society. Foreword: A Common European Law on Investment Screening Contents Towards a ``Common European Law on Investment Screening (CELIS) ́ ́ Part I: Economic and Political Context The Political Economy of Capital Controls and Liberalization in the European Union 1 Introduction 2 A Brief Historical Overview 2.1 Economic Motives 2.2 Political Motives 3 The Erga Omnes Principle 4 History Revisited: The Case of Japan 5 The European Investment Screening Proposals 6 Conclusion References Investment Screening: The Return of Protectionism? A Business Perspective 1 The Issue 2 The EU Reaction and Its Legal Implications 3 Evaluation from a Business Perspective 3.1 Investment Screening Mechanism 3.2 EU Investment Policy 4 Conclusion References Investment Screening: The Return of Protectionism? A Political Account 1 Introduction 2 Calls for a More Restrictive Approach to FDI 3 Calls for a Liberal Approach to FDIs 4 Contextualisation of the EU Screening Regulation 5 Conclusion References The Birth of the EU Screening Regulation 1 Introduction 2 The EU Needs to Ensure a Level Playing Field for Foreign Direct Investments 3 How Does the Screening of FDI Fit in the Framework of EU Law? 3.1 Free Movement of Capital 3.2 Definition of Foreign Direct Investment 3.3 Security Reviews 4 From Idea to Regulation: The Evolution of the EU Screening Regulation 4.1 EPP Group Proposal for a Union Act on the Screening of Foreign Investment in Strategic Sectors 4.2 Light Bulb Moment: State of Union in September 2017 4.3 The EC Proposal from September 2017 4.4 Position of the European Parliament as Adopted in May 2018 4.5 The Provisional First Reading Agreement (Trilogue) 4.6 The Achievement of the First Reading Agreement: A Win-Win Situation 5 Conclusions References Part II: The European Origins - the EU Member States’ Rules on Screening Foreign Investment Foreign Investment Screening in Germany and France 1 Introduction 2 Germany 2.1 Cross-Sectoral Review 2.1.1 Scope of Application 2.1.1.1 Object of Acquisition: ``Domestic Company ́ ́ Definition of ``Domestic ́ ́ Definition of ``Company ́ ́ 2.1.1.2 Foreign Investor Parallel Application on State and Private Investors Prevention of Misuse and Circumvention Pursuant to Sec. 55(2) AWV 2.1.1.3 Acquisition Transaction (Erwerbsgeschäft) Company Acquisition Acquisition of Shareholding Acquisition Threshold Attribution of Voting Rights 2.1.1.4 Acquisition of Further Shareholdings 2.1.1.5 Iterative Acquisition of Additional Voting Rights 2.1.1.6 Agreements on Exercising Voting Rights 2.1.1.7 Indirect Acquisitions 2.1.2 Threat to Public Order or Security 2.1.3 Scrutiny Procedure 2.1.4 The Ministry ́s Powers to Act 2.1.5 Certificate of Non-objection Pursuant to Sec. 58 AWV 2.1.6 Legal Consequences 2.1.7 Legal Protection 2.2 Sector-Specific Review 2.2.1 General 2.2.1.1 Scope of Application 2.2.1.2 Threat to ``Essential Security Interests ́ ́ 2.2.2 Scrutiny Procedure 2.3 Comparative Description 3 France 3.1 Investment Control Regime 3.1.1 Regulated Economic Sectors 3.1.2 Definition of ``Foreign Investor ́ ́ 3.1.3 Authorization Requirement 3.1.3.1 EU Investor 3.1.3.2 Non-EU Investor 3.1.3.3 French-Controlled Foreign Investor 3.1.4 Exemptions 3.2 Scrutiny Procedure 3.3 National Interest Clearance/Ministry ́s Power to Act 3.4 Legal Consequences 3.5 Sanctions 3.6 Legal Protection 4 Implications of the EU Screening Regulation References Foreign Investment Screening in Italy, Spain, Portugal and Greece 1 Introduction 2 Investment Screening in Greece and the Lack of a Formal Screening Mechanism 2.1 Private Investment Aid Schemes: Law 4399 of 2016 2.2 The Promotion of Strategic Investment: Laws 4146/2013 and 3908/2011 2.3 The EU Screening Regulation and the Absence of a Screening Mechanism 3 A Liberal Approach to Foreign Investment: Spain ́s Screening Mechanism 3.1 The Scope of Application of the Spanish Screening Mechanism 3.2 The Screening Procedure 3.3 Considerations on the Implementation of the EU Screening Regulation in Spain 4 Discretion and Foreign Investment Screening: The Case of Portugal 4.1 The ``Opposition Procedure ́ ́ 4.2 The ``Opposition Procedure ́ ́ and the EU Screening Regulation 5 Mitigation over Objection: The Screening of Foreign Investment in Italy 5.1 The Screening Procedure and Its Scope of Application 5.2 The Screening of Investments in Investments in Energy, Transport and Telecommunication 5.3 The Italian Screening Mechanism and the EU Screening Regulation 6 Concluding Remarks References Foreign Investment Screening in Poland, Lithuania and Latvia 1 Introduction 2 Poland 2.1 Principal Laws Governing Investment Screening 2.2 Screening Mechanism According to the Law on Control of Certain Investments 2.2.1 Investors Subject to Screening 2.2.2 Protected Enterprises 2.2.3 Transactions Subject to Screening 2.2.4 Screening Criteria 2.2.5 Competent Authorities 2.2.6 Procedure 2.2.7 Administrative and Judicial Review 2.2.8 Consequences of Unlawful Transactions 2.2.9 LCCI in Action 2.3 The Polish Law on Control of Certain Investments in the Light of the EU Screening Regulation 2.4 Conclusion 3 Lithuania 3.1 Principal Laws Concerning Investment Screening 3.2 Screening Mechanism According to the Law on the Protection of Objects of Importance to Ensuring National Security 3.2.1 Investors Subject to Screening 3.2.2 Protected Objects 3.2.3 Transactions Subject to Screening 3.2.4 Screening Criteria 3.2.5 Competent Authorities 3.2.6 Procedure 3.2.7 Judicial Review 3.2.8 Consequences of Unlawful Transactions 3.3 Law on the Protection of Objects of Importance to Ensuring National Security in the Light of the EU Screening Regulation 3.4 Conclusions 4 Latvia 4.1 Principal Laws Concerning Investment Screening 4.2 Screening Mechanism According to the National Security Law 4.2.1 Investors Subject to Screening 4.2.2 Protected Objects 4.2.3 Transactions Subject to Screening 4.2.4 Screening Criteria 4.2.5 Competent Authorities 4.2.6 Procedure 4.2.7 Administrative and Judicial Review 4.2.8 Consequences of Unlawful Transactions 4.3 National Security Law in the Light of the Screening Regulation 4.4 Conclusions References Foreign Investment Screening in Hungary and Romania 1 Introduction 2 Romanian Competition Law No 21/1996 3 The Scope of Application of Hungarian Law LVII of 2018 3.1 The `Foreign ́ Investor 3.2 `Operating ́ in Hungary 3.3 In a `Sensitive ́ Economic Sector 3.4 Ratione Temporis 4 The Procedural Framework Set Out by Hungarian Law LVII of 2018 4.1 The Obligations of the Foreign Investor 4.2 The Procedure and Judicial Redress 4.3 The Effects of the Minister ́s Decision 4.4 What if Investors Do Not Comply with the Obligation to Declare Their Activities? 5 The Interplay with the EU Screening Regulation 5.1 The Subject Matter and Scope 5.2 The Procedural Mechanisms 5.3 Factors to Be Taken into Consideration 6 Conclusion References Reports and Studies National and EU Legislation Foreign Investment Screening in Finland, Norway, Sweden and Denmark 1 Introduction: Investment Screening in Four Nordic Countries 2 Monitoring Acquisitions in Finland 2.1 Which Acquisitions Are Screened? 2.2 Which Sectors and Factors Are Considered When Determining to Allow an Investment? 2.3 Which Procedure Is Applied When Determining Whether to Allow an Investment? 2.4 Competence and Reasons for Rejection 2.5 Legal Consequences and the Possibility to Appeal 3 Norway ́s Security Act 3.1 The Former and New Norwegian Security Act on Protective Security Agreements 3.2 Monitoring Acquisitions in Norway 3.2.1 Which Sectors and Factors Are Considered? 3.2.2 What Are the Reasons for Rejection? 3.2.3 The Possibility to Appeal 4 Sweden and the Protective Security Act 4.1 A Proposal for a New Protective Security Act 4.1.1 Which Acquisitions Are (or Should Be) Monitored? 4.2 Sweden and a Limited Investment Screening Act 4.2.1 What Investments Are to Be Screened? 4.2.2 Which Factors Are Considered? 4.2.3 What Are the Reasons for Rejection? 4.2.4 The Possibility to Appeal 4.3 Sweden and a Comprehensive Investment Screening Act 5 Denmark 6 Similarities and Differences References Part III: Existing EU Secondary Legislation on (Discriminatory) Treatment of Third Country Investments - A Plurality of Regula... The Banking and Insurance Sector 1 Introduction 1.1 Outset 1.2 The EU Screening Regulation and Prudential Ownership Control Procedures 1.3 Prudential Ownership Control Procedures 1.3.1 Objectives, Requirements and Responsibilities 1.3.2 Third Country Investors 1.4 FDI Screening Mechanisms Under the EU Screening Regulation 1.4.1 Basic Elements of the EU Screening Regulation 1.4.2 Screening Mechanism for Financial Institutions 1.4.3 Flexibility of the Member States 1.4.4 FDI Screening and Prudential Ownership Control 2 Investment Control Under Supervisory Law 2.1 Overview 2.1.1 Regulated Sectors and Regulations 2.1.2 Main Supervisory Aims 2.1.3 Supervisory Law and Third Country Investors 2.2 Supervision in the Single Supervisory Mechanism 2.3 Supervision of Insurance and Reinsurance Undertakings and Investment Firms 3 Ownership Control Under EU Supervisory Law 3.1 Harmonized Rules and Objectives 3.2 Main Terms and Requirements 3.2.1 Intended Acquisition of a Qualifying Holding 3.2.2 General Concepts Under JC/GL/2016/01 3.2.2.1 Acting in Concert 3.2.2.2 Significant Influence 3.2.2.3 Indirect Acquisition Control Criterion Multiplication Criterion 3.2.2.4 Proportionality Principle General Rules Third Country Acquirers 3.2.3 Notification and Assessment Procedures 3.2.3.1 Notification and Pre-notification 3.2.3.2 Coordination in Cross-Border Transactions 3.2.3.3 Assessment Period 3.2.3.4 Information Requirements Essential Information Information Regarding Third Country Investors 3.2.3.5 Assessment of Proposed Acquirers General Assessment Criteria Reputation and Reliability Financial Soundness Compliance with Prudential Requirements Suspicion of Money Laundering and Terrorist Financing Assessment of Third Country Investors Protection of Confidential Information 3.3 Sector-specific Competencies and Procedures 3.3.1 CRR Credit Institutions 3.3.2 Insurance Undertakings 3.4 Legal Remedies 3.4.1 Legal Remedies Against Decisions Within the SSM 3.4.2 Legal Remedies Against Decisions Outside of the SSM 4 Relationship Between FDI Screening Mechanisms and Prudential Ownership Control 4.1 The Design of Screening Mechanisms 4.2 Screening Mechanisms for Financial Institutions 4.2.1 Investments in Financial Infrastructure 4.2.2 Investments in Collectors of Sensitive Information 4.2.3 Foreign States as Investors 4.2.4 Investors Involved in Criminal Activities 4.3 Cooperation Mechanisms 5 Conclusion References The Defence, Military and Dual-Use Sector 1 Investment Screening in the Defence Industry: Report from the Bermuda Triangle of EU Law 2 Secondary Law 2.1 Merger Control 2.2 Public Procurement Law 2.3 The New European Defence Fund/EDIDP 3 Primary Law: Free Movement of Capital and Article 346 Para. 1 (b) TFEU 3.1 Investment Screening as a Restriction of the Free Movement of Capital and the Freedom of Establishment 3.2 The Special Security Exemption Under Article 346 TFEU 3.2.1 Scope 3.2.2 Essential Security Interests 3.2.3 Necessity 3.2.4 No Negative Impact on the Civil Market 3.2.5 Scrutiny and Enforcement 4 Bermuda Triangle Demystified: The Future Application of Article 346 TFEU References Literature Legal Documents and Case Law Merger Regulation and Related Cases The Transport Sector 1 Introduction 2 The Establishment of a Common Transport Policy Aiming to Create a Single EU Transport Area 3 Is There Any Existing EU Legal Basis for Foreign Direct Investment Screening in the Transport Sector? 4 The Legal Basis for the Trans-European Transport Networks (TEN-T) 5 Long-Term Investment Measures to Implement the TEN-T Objectives 5.1 First Example: Developing EU Sea Ports and EU Sea Port Facilities 5.2 Second Example: Motorways of the Sea as a Horizontal Priority 5.3 Relevance to the EU Screening Regulation 6 Conclusions References The Energy Sector 1 Introduction 1.1 Critical Systems 1.2 Investments 2 The EU Energy Sector 2.1 The Internal Market 2.2 The EU Energy Policy 2.3 The Need for Investments 3 Existing EU Secondary Legislation Relating to FDI 3.1 Hydrocarbons Directive 3.2 Authorizations 3.2.1 Authorization to Operate 3.2.2 Authorization for New Capacity 3.3 Risk Assessment 3.4 Unbundling Requirements 4 The Energy Charter Treaty 5 Concluding Remarks References The Telecommunications and IT Infrastructure Sector 1 Introduction: Huawei ``Ante Portas ́ ́ 2 Initial Findings 2.1 No Directly Applicable Rules or Judicial Precedents 2.2 Reasons: Different Objectives 3 Utilising General Rules for Hidden Investment Screening 3.1 Telecommunication Networks and Services in General 3.1.1 Reinterpreting Prohibitions of Discrimination? 3.1.2 Lack of Specific Authorisation of a Screening Mechanism 3.1.3 Possible Conditions Linked to the General Authorisation 3.1.4 No Direct Action Against Mere Suppliers of Technology 3.2 In Particular: Auction of Frequencies 3.2.1 Conditions Linked to Individual Rights of Use 3.2.2 Eligibility Requirements in the Competitive Selection Procedure 4 Conclusion References Literature Part IV: Beyond Europe - The Screening Schemes of Major EU Trade Partners Foreign Investment Screening in Russia 1 Introduction 2 Russia ́s Primary Rules on the Control of Foreign Direct Investments 3 Definition of a Foreign Investor 3.1 General Definitions in Law 160-FZ and Law 57-FZ 3.2 Sovereign Investors 3.3 Control Test 4 Substantive Obligations of Foreign Investors 4.1 Definition of Strategic Sectors of the Economy 4.2 Obligation of Prior Approval 5 Approval Procedures and Consequences of Non-compliance 5.1 Approval Procedures 5.2 Consequences of Non-compliance 6 Secondary Legislation in Place 7 EU Rules and the Foreign Investment Control Experience of Russia: Questions for Discussion References Foreign Investment Screening in the USA 1 Overview 1.1 Key Legislative Measures 1.2 CFIUS Membership 2 CFIUS Review 2.1 Authority 2.2 Covered Transactions 2.3 CFIUS Process 2.4 CFIUS Analytical Approach 2.5 Mitigation 3 FIRRMA 4 Conclusion Appendix: 27 NAICS Code Industries Foreign Investment Screening in Japan 1 Foreign Investment Regulations in Japan 1.1 Overview 1.2 FEFTA Restrictions on Foreign Direct Investment and Specified Acquisitions 1.3 Definition of Foreign Investor(s) 1.3.1 Foreign Investor(s) 1.3.2 Special Related Persons 1.4 Definitions of ``FDI ́ ́ 1.5 Prior Notification and Posttransaction Report System of Foreign Direct Investment 1.5.1 Overview 1.5.2 Foreign Direct Investment Subject to Prior Notification 1.5.2.1 Overview 1.5.2.2 Specified Industries Subject to Prior Notification 1.5.3 Foreign Direct Investment Subject to Posttransaction Reports 1.6 Amendment of the FEFTA 1.6.1 Overview 1.6.2 Revision of the Scope of FDI Subject to Prior Notification 1.6.3 Introduction of a Prior Notification Exemption System 1.6.3.1 The Prior Notification Exemption System 1.6.3.2 Exceptions to the Exemption System 1.6.3.3 Conditions of the Exemption System 1.6.4 Other Amendments 1.7 Competent Authorities 1.8 Procedures for Prior Notification 1.8.1 Prior Notification Procedure 1.8.2 Substantive Test for Clearance 1.8.3 Informal Guidance 1.9 Procedures for Posttransaction Report 1.10 Order to Modify or Discontinue the Investment 1.10.1 Order or Recommendations to Modify or Discontinue the Investment 1.10.2 Sanctions 1.10.3 Challenges to the Negative Orders 1.10.3.1 Prior Challenge 1.10.3.2 Postorder Challenge 2 The J-Power Case 3 Concluding Remarks References Foreign Investment Screening in China 1 Evolving Foreign Direct Investment Regime in China 1.1 A Historical Account of the Evolving Foreign Direct Investment Regime 1.2 The Legislative Framework of the FDI Regime 1.3 Determining Factors of the Evolving FDI Regime 2 Case-by-Case Approval Approach: The Main Feature of the FDI Screening Mechanism Before 2016 2.1 Screening 2.2 Entry Restrictions or Prohibitions on Sectors or Industries 2.3 Certain Areas Not Open to Foreign Investment 2.4 Ownership and Control 3 Introduction of the Negative List and Amendment of the Three FIE Laws 3.1 Pre-establishment National Treatment Plus Negative List Mode and the 18 Pilot Free Trade Zones 3.2 FDI Screening-Related Issues in the 2019 Foreign Investment Law 3.2.1 Article 4 of the Foreign Investment Law 3.2.2 Article 7 of the Foreign Investment Law 3.2.3 Chapter IV Investment Management 3.2.3.1 Pre-establishment National Treatment Plus Negative List Mode 3.2.3.2 Relevant Laws and Regulations Involved in the New FDI Framework 3.2.3.3 Foreign Investment Information Reporting System 3.2.3.4 National Security Review System 3.2.4 Chapter V Legal Liability 4 Concluding Remarks on China ́s FDI Screening Mechanism Vis-à-Vis the EU ́s Annex 1 Relevant Articles for Part 3 References Part V: EU Constitutional Preconditions and Limits Exploring the Possibilities and Limits of the EU and Member States to Set Up an Investment Screening Mechanism in the Light of... 1 Terminology and Risk Analysis 1.1 Relevant Investments of Capital for Screening Mechanisms 1.2 Risks Connected to Capital Investments 2 Screening Mechanisms in National (Member State) Law 2.1 Applicability of Article 345 TFEU and Article 346 Para 1 Lit. b) TFEU 2.1.1 System of Property Ownership, Article 345 TFEU 2.1.2 Interests of National Security, Article 346 Para 1 Lit. b) TFEU 2.2 Direct Investments Out of Third States 2.2.1 Violation of the Fundamental Freedoms 2.2.2 Violation of the System of Competences in the Treaties 2.2.2.1 The Meaning of Article 207 Para 2 TFEU 2.2.2.2 Unacceptable Attempts to Explain National Screening Mechanisms Exclusive Competences ``ex nunc ́ ́ Exclusive Competences Only for Treaties No Barrier Effect by Articles 52, 65 TFEU No Barrier Effect by Article 4 Para 2 Sent 2 TEU 2.2.2.3 Eligible Attempts to Explain National Screening Mechanisms Applicability of Article 64 Para 2 and 3 TFEU Despite Article 49 TFEU Applicability of Article 64 Para 2 and 3 Despite Article 207 Para 2 TFEU Relationship Between Those Titles of Competence in ``Screening Cases ́ ́ General Principals of Classification Meaning of Article 64 Para 3 TFEU Meaning of Article 64 Para 2 TFEU 2.2.3 Preliminary Result 2.3 Direct Investments Out of Member States 2.4 Portfolio Investments 3 Screening Mechanisms in Union Law 3.1 Direct Investments Out of Third States 3.1.1 Principle of Conferral 3.1.1.1 Common Commercial Policy, Article 207 Para 2 TFEU Purpose of the Competence Screening the EU Screening Regulation Comparable Regulations Grandfathering-Regulation Trade Barrier Regulation Regulation on the Export of Cultural Goods Dual-Use-Regulation Preliminary Result 3.1.1.2 Secondary Law Based on Article 64 Para 2, 3 TFEU 3.1.1.3 Remaining Possibilities for the Union to Adopt Screening Rules 3.1.2 Restrictions for the Use of Union Competences 3.1.2.1 Violation of the Principle of Proportionality 3.1.2.2 Violation of Fundamental Rights 3.2 Direct Investments Out of Other Member States 3.3 Portfolio Investments 4 Result References Comment on ``Exploring the Possibilities and Limits of the EU and Member States to Set Up an Investment Screening Mechanism in... 1 Screening Mechanisms and Article 207 TFEU 1.1 Scope of the Common Commercial Policy 1.2 Principles for the Common Commercial Policy 1.3 Realization of the Common Commercial Policy 2 The Question of Compatibility of Article 65 TFEU and National Screening Mechanisms 2.1 Nonconferral of Member States ́ Right to Take Measures 2.2 Qualification of Member States ́ Right to Take Measures 2.3 Tension in the Motivation for Regulation 2019/452 2.4 Article 207 TFEU Revisited 3 The Allocation of Competences in Article 64 TFEU 3.1 The Grandfather Clause and Deliberalization 3.2 Realization of the Free Movement of Capital: Foreign Direct Investments 4 Concluding Remarks References Part VI: Possible Functions of a Common European Law on Investment Screening Screening for What Threat: Preserving ``Public Order and Security ́ ́, Securing Reciprocity in International Trade, or Supportin... 1 New Geopolitical and New Geoeconomic Conditions: Diffuse Fears 2 Terminology: Use and Abuse of the Concept of Security and Order 3 The Empirical Dimension: Expansion and Reformulation of the Regulatory Approach 3.1 Shifts in Objectives 3.2 From the Defense of Territorial Security to the Management of Economic Structures 3.3 Changes in the Concept of Risk 4 The Normative Dimension: Coherence and Rationality of Investment Screening 4.1 Securing the Provision of Public Services 4.1.1 Relevant Sectors: Areas and Extent of Political Responsibility 4.1.2 Definition of Hazard and Damage Scenarios 4.1.3 Identification of Specific Risk Exposure 4.1.4 Definition of Adequate Response 4.2 Combating the Brain Drain, Technology, and Jobs 4.2.1 The Political Aim of Securing Relative Advantages in System Competition 4.2.2 Definition of Damage Scenarios 4.2.3 Identification of Risk Situations 4.2.4 Adequate Response 4.3 Opening Up of Foreign Investment Markets 4.3.1 System Competition and Openness of Markets 4.3.2 Definition of the Damage Scenario 4.3.3 Identification of Risk Situations 4.3.4 Adequate Response 4.4 Other Objectives (e.g. Fairness in the Markets) 4.5 Cumulative Objectives 5 Conclusion References Part VII: The EU Screening Regulation in Perspective What Is a Foreign Direct Investment? 1 The Times They Are A-Changin ́ 2 FDI Restrictions Embedded in Fundamental Global Challenges 3 Third Country Direct Investments Under EU Secondary and Primary Law 3.1 Direct Investments as Defined in the Screening Regulation 3.2 Direct Investments in EU Primary and Secondary Law 3.2.1 Direct Investments as Defined by the Capital Movements Directive 3.2.2 All Third Country Direct Investments Are Protected by Art 63(1) TFEU 3.2.3 Third Country Direct Investments Are Protected by EU Fundamental Rights 3.2.4 EU Competence for Rules on Third Country Direct Investments 4 Approaching a Common Understanding of Third Country Direct Investments 4.1 A Common European Screening Law and Politics 4.2 Interpreting the Screening Regulation in Uneasy Contexts 4.2.1 The Screening Regulation as New Policy 4.2.2 Screening Law and Politics as Key Concepts in the Global Struggle for Adequate Rules 4.2.3 Use of Screening Law as a Bargaining Chip 4.2.4 Potential Spillover Effects of Third Country Investment Screening on the Internal Market 4.3 Interpreting the Screening Regulation by a Strictly Legal Approach 4.3.1 Legal Terms Open to Interpretation 4.3.2 Considering Notions of Reciprocity as Part of the Screening Decision 4.3.3 Understanding the Paradigm Shift: The Screening Regulation as Restriction of Free Capital Movements 4.4 International Law 5 Approaching Specific Elements of Third Country Direct Investments 5.1 Investments Aiming to Establish or Maintain Lasting and Direct Links 5.1.1 Subjective or Objective Test? 5.1.2 Types of Investment 5.1.3 Targets and Transactions, Especially Greenfield Investments 5.1.4 Lasting and Direct Links 5.1.4.1 Lasting Links 5.1.4.2 Direct Links 5.1.4.3 Effective Participation in the Management or Control Participation in the Control Participation in the Management Quantitative and Qualitative Factors to Determine `Effective Participation ́ Examples of a Quantitative-Qualitative Approach 5.2 Ex Post Screening 5.3 Circumvention 5.3.1 CJEU Case Law on `Wholly Artificial Arrangements ́ 5.3.2 Accommodation with a `General Anti-Avoidance Rule ́ 5.4 Third Country Investor 5.4.1 EU Corporations and Third State Owners 5.4.2 Qualifying as Third Country Investor Even if Constituted or Otherwise Organised Under the Laws of an EU Member State? 5.4.3 Third Countries 5.4.3.1 OECD Countries 5.4.3.2 Overseas Countries and Territories 5.4.3.3 European Economic Area States: Iceland, Liechtenstein, and Norway 5.4.3.4 Switzerland 5.4.3.5 United Kingdom Legal Situation During the Transition Period Legal Situation After the Transition Period Third Country Direct Investments into an EU Member State That Could Affect the Security or Public Order of the UK Third Country Direct Investments to the UK That Could Affect the Security or Public Order of EU Member States Direct Investments by UK Undertakings in an EU Target 6 Concluding Remarks: Is Winter Coming? References Legal Provisions and Legislative Material Case Law and Decisions of Public Authorities Articles, Books, Chapters, and Online Publications Building Pipelines: Experiences with Formal and Informal Screening Mechanisms 1 Introduction 2 The Nord Stream 1 v. Nord Stream 2 Pipelines: Experiences in Regulatory Treatment 3 Experiences from Formal and Informal Screening Mechanisms 3.1 Domestic Measures: Competition and Security 3.1.1 Challenges Under Polish Competition Law 3.1.2 `Investment Screening ́ Under the Danish Continental Shelf Act 3.2 EU Measures 3.2.1 The Amendment of the Directive:Changing the Rules Mid-Game 3.3 The Risk of Third Country Intervention 4 European Investment Screening Regulation 4.1 The Impact on the Building of Pipelines: Positive Changes? 5 Conclusions References Navigating Between Openness and Protectionism: EU Investment Screening in 25 Years ́ Time 1 Predicting the Future of EU Foreign Direct Investment Screening 1.1 The Delicate Act of Legislating Member State Public Order and Security 1.2 Is There a Basis for Transforming the Framework Into Something More? 1.3 EU Alignment and Global Evolution 1.4 Underlying Rationale of the Framework and Basis for Comparison with EU Export Controls 2 The EU Export Control Framework for Military Equipment 2.1 The Rationale of Defence Cooperation and Link to FDI Screening 2.2 The Example of Sweden: FDI Screening as a Prerequisite for Defence Strategy 2.3 History of the EU Export Control Rules on Military Goods: The Common Position 2.4 Features of the Current Common Position 2.4.1 A Pragmatic Approach: The User ́s Guide 2.4.2 Legal Basis for the Common Position 2.4.3 Implementing the Common Criteria: The EU Military List 2.4.4 Evolution and Tests of the Common Position 3 The EU Dual-Use Regulation 3.1 Link to FDI Screening 3.2 The Evolution of the Dual-Use Regulation 3.3 Features of the Dual-Use Regulation 3.3.1 Legal Basis 3.3.2 Common EU Rules 4 What Lies Ahead for the EU FDI Framework? 4.1 Legal Basis 4.2 Consultation Procedure 4.3 Annual Reports and Statistics 4.4 Possible Outcomes of FDI Consultation Procedure 4.5 Perspective of Moving Decision-Making to the Union Level 4.6 Long-Term Predictions References The One Belt and One Road (OBOR) Initiative: Reconceptualisation of State Capitalism Vis-à-Vis Remapping of Global Governance? 1 Introduction 2 State Capitalism Vis-à-Vis the Washington Consensus 2.1 The Rise of a Distinct Form of State Capitalism in China 2.1.1 Legitimacy 2.1.2 Geo-Economics and Geopolitical Perspectives 3 One Belt One Road (OBOR) 3.1 Overcapacity and Energy Security 3.2 OBOR Vis-à-Vis the ``Marshall Plan ́ ́ 4 Reshaping the Global Governance Landscape? 4.1 Existing Global Governance Regime 4.2 Global Governance Characterised with Chinese Elements 4.2.1 China as an Ideological Rival: Paving the Way to a New Global Order? 4.2.2 A Hybrid Model: State ́s Dominance Vis-à-Vis Private Actors ́ Emerging Role 4.3 Compatibility Vis-à-Vis Transplantation 4.4 The Chinese OBOR Initiative: An Alternative Concept of International Order? 4.4.1 Is Thucydides ́ Trap Inevitably Unavoidable? 4.4.2 Is the Creation of a Rival International Order Viable Under the OBOR Initiative? 4.4.3 Too Early to Conclude! 5 Going Beyond Geopolitical Power Play 5.1 Strategic Focus: Geopolitical Manoeuvrings Vis-à-Vis Economic Enhancement 5.1.1 Geopolitical Influence and Perceptions 5.2 Promote More Transparent and Inclusive Procedures 5.2.1 Theory of Localisation 5.2.2 Transparency Facilitation 5.3 Legal and Regulatory Framework in Response to Other Concerns 5.3.1 Provisions and Guidelines 5.3.2 Supreme People ́s Court (SPC) ́s Judicial Interpretations 5.3.3 (In)adequate? 5.4 Who Will Write the New Global Order? 5.4.1 The UN ́s Endorsement of Global Community of Common Destiny 5.4.2 Asian Infrastructure Investment Bank (AIIB) in the OBOR Initiative 6 Conclusion References Screening of Foreign Direct Investments Through European Company Law 1 Introduction 2 Freedom of Establishment of Companies, CJEU ́s Case Law on Corporate Mobility and Screening of Foreign Direct Investments 3 Privatizations of State-Owned Companies, Golden Shares and Screening of Foreign Direct Investments 3.1 Golden Shares as an Effective Tool to Screen Foreign Directive Investments 3.2 Privatizations of State-Owned Companies and Conflicts of Interests 4 Harmonization of European Company Law and Screening of Foreign Direct Investments 4.1 The Relationship Between the Goals of the Harmonization of European Company Law and the Screening of Foreign Direct Invest... 4.2 Takeover Bids Directive and Screening of Foreign Direct Investments 4.2.1 Basic Concepts and Key Provisions 4.2.2 Optionality and Screening of Foreign Direct Investments Made Through a Takeover Bid 4.2.3 Screening of Foreign Direct Investments and the Powers of the Target Company ́s Board to Look for Competing Bids and to P... 4.3 Disclosure of Information in Takeover Bids and Screening of Foreign Direct Investments 4.4 Political Considerations and Protectionism in Takeover Bids and Their Impact on the Screening of Foreign Direct Investments 4.5 Shareholders Rights Directive II and Screening of Foreign Direct Investments 4.5.1 Introduction 4.5.2 Identification of Shareholders, Transmission of Information and Facilitation of the Exercise of Shareholder Rights in th... 4.5.3 Engagement Policy and Screening of Foreign Direct Investments 4.5.4 Related Party Transactions and Screening of Foreign Direct Investments 4.5.5 Shareholder Rights Directive I and Screening of Foreign Direct Investments 4.6 Transparency in Listed Companies and Screening of Foreign Direct Investments: The Role of