2023-08-17 19:00:39
Two Flemish academics point out a number of pitfalls in the new system for screening foreign investment in Belgium.
Scrutinizing foreign investment in Belgium, as planned by the government, will not be easy. This is what two Flemish academics say, Jeroen Delvoie (VUB) and Claire Fornoville (UAntwerp)in the Dutch legal journal Erasmus Law Review.
Since July 1, 2023, Belgian companies that welcome non-European investors on board will have to show their credentials. Transactions granting 25% of the voting rights of a Belgian company to a non-European entity will be subject to approval. This threshold may be even lower (10%) in the case of activities related to Defense or energy in particular. This is the consequence of the signing of the cooperation agreement of November 30, 2022 between the Federal Government and the federated entities. Objective: to prevent the takeover of sensitive segments of the economy by players from third countries. An Interfederal Filtering Committee (CFI) is responsible for carrying out checks.
Triple pitfall
Jeroen Delvoie and Claire Fornoville have identified at least three pitfalls that could make effective filtering difficult. First of all, the spectrum exceeds that of sensitive areas such as Defense or energy. It also includes the strategic interests of the various entities of the country within the framework of their respective competences. “Given the extensive powers available to the federated entities, the transactions which will be notified are likely to be more numerous than expected, if only for the sake of legal certainty”, they predict.
“Given the possibilities of postponement or extension, the procedures are likely to drag on.”
Secondly, if the deadlines provided are strict (30 days for the first screening, 28 days for the second screening), they risk being poorly respected in practice. “Given the possibilities of postponement or extension, the proceedings are likely to drag on. The experience with the Belgian Competition Authority is not very reassuring in this regard.”
Thirdly, the two Flemish academics think that given the different levels of power in Belgium, it cannot be ruled out that proceedings may be initiated simultaneously at several levels, depending on the sectors concerned or the links with a particular territory. Not good for legal certainty. “A lot will depend on how the CFI will assume its coordination mission and the degree of latitude that will be left to it by the government authorities”, they underline.
For its part, the Committee has never concealed the complexity of the task that awaits it, citing from the outset a “dynamic” mechanismwhich may “be permanently adapted depending, in particular, on changes made to the regulatory texts, new requests and the experience acquired”.
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