Export control / embargoes
For export-oriented companies, the provisions of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG), the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV) and the EU Dual-Use Regulation are particularly relevant to the question of which goods may only be exported with a licence. However, export projects must also always take into account the sometimes considerable restrictions on foreign trade (embargoes) resulting from international economic and financial sanctions against individual states or certain persons, for example from resolutions of the European Union or resolutions of the United Nations.
In addition, as the largest economy in Europe, Germany continues to be an attractive destination for foreign investment. However, the acquisition of a German company or the participation in a German company by a foreign actor is subject to scrutiny by the Federal Ministry of Economics and Climate Protection (BMWK). This is because the Federal Government wants to ensure that such foreign direct investments do not pose a threat to the public order and security of the Federal Republic of Germany. This endeavour has led to a number of significant tightening of the legal requirements in German investment control law, especially since 2017. Against this backdrop, the Federal Government has recently intervened in planned acquisition transactions on various occasions or has prohibited them completely. In addition, the European Union has also created a legal framework since 2019 with the so-called EU Screening Regulation, which obliges the member states and the EU Commission to cooperate in their national investment review procedures. The examination of the acquisition of German companies by foreign actors has thus become considerably more complex within a few years. When planning and preparing cross-border M&A transactions, an early examination of the respective requirements of foreign trade law acquisition control is therefore essential.
Control of third-country subsidies
In addition, the EU Regulation on Third State Subsidies Distorting the Internal Market (so-called Foreign Subsidies Regulation) has been in force since mid-2023. With this instrument, the European Union wants to prevent state-subsidised companies from non-EU states from distorting competition within the European single market. To achieve this goal, the regulation introduces, among other things, a prior notification requirement for mergers above certain thresholds. In cross-border M&A transactions, companies must therefore not only keep an eye on the requirements of investment control under foreign trade law, but also check at an early stage whether the scope of application of the Foreign Subsidies Regulation is opened up and whether notification obligations arise from this.
We provide you with comprehensive support on all issues relating to foreign trade and cross-border business activities. If necessary, we involve our experts from other areas of law (in particular tax, antitrust and customs law) and advisory disciplines.