Weekend Edition Nº158 by eulawlive

Nº158

OCTOBER 14

2023

Weekend

Edition

stay alert keep smart

ALEXIA CRIVOI

THE UPCOMING REVIEW OF THE FDI SCREENING REGULATION

www.eulawlive.com

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

The Upcoming Review of the FDI Screening Regulation Alexia Crivoi

1. Introduction In 2019, the European Union (‘EU’, or ‘Union’) took a rst step towards regulating the in ow of foreign capital into the Union with Regulation (EU) 2019/452 (2) (‘FDI Screening Regulation’, or ‘the Regulation’), which entered into force in 2020. Upon its adoption, the FDI Screening Regulation sparked a lively academic discussion ranging from issues of competence and legal basis to questions of the framework’s eﬀectiveness. A er three years in application, the Regulation is now facing an obligatory review by the Commission by October 2023, which is highly likely to result in a proposal for a new legislative act amending the Regulation. is Long-Read explores a few ideas for the upcoming Regulation review. Upon presenting the policy background provided by the novel European Economic Security Strategy, three possible substantive changes are discussed: a) requiring Member States to introduce screening mechanisms, b) making certain screening factors obligatory, and c) capturing intra-EU indirect FDI (point 2). In essence, these changes would lead to a more harmonised approach to screening throughout the Member States (‘MSs’). ese possible amendments raise two key questions: First, an amended Regulation will have to be in line with the fundamental freedoms, which this LongRead discusses in light of the Court of Justice’s recent decision in Case C-106/22 (3) on a Member State’s national screening legislation and the freedom of establishment (point 3). Second, a Regulation amendment raises the issue of suitability and/or suﬃciency of the Regulation’s current legal basis, the Union’s Common Commercial Policy in Article 207 TFEU. Looking at the outlined possible amendments, the Long-Read analyses Article 207 and Article 114 TFEU as potential legal bases for a revised Regulation (point 4).

2. What Next for FDI Screening? 2.1 Starting Point:

e FDI Screening Regulation Facing Review

e FDI Screening Regulation sets a framework for MSs screening foreign direct investment into the Union by (1) providing some guidance and imposing some obligations for MSs that have a screening mechanism in place

1. Alexia Crivoi is a PhD Candidate and Teaching Associate at Vienna University of Economics and Business (WU), Institute for European and International Law. 2. Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investment into the Union, OJ 2019 L 79, p. 1. 3. Judgment of the Court of Justice of 13 July 2023, XellaMagyarország (C-106/22, EU:C:2023:568).

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

or will adopt one, and (2) establishing a cooperation mechanism between MSs themselves and between MSs and the Commission to exchange information on certain transactions. Most notably, the Regulation does not oblige MSs to adopt a screening mechanism. (4) According to Article 15, the Regulation is to be evaluated by October 2023. e Commission, involving the MSs, must present a report on the functioning and effectiveness of the Regulation to the European Parliament and the Council. Where the report recommends amendments to the Regulation, the Commission may accompany it by an appropriate legislative proposal. Ahead of the review, the Commission tasked the OECD with assessing the current state of FDI screening in the Union. In a report from November 2022, the OECD analyses the Union screening framework and MSs’ screening mechanisms. (5) It identi es 12 (procedural and substantive) points in which the system lacks effectiveness and efficiency and suggests possible improvements. is Long-Read will focus on some of the substantive de ciencies identi ed therein: ineffectiveness due to some MSs having mechanisms with too limited scopes of application or lacking screening mechanisms entirely (6) and the possibility to escape screening via intra-EU investment, pro ting from the non-applicability of the Regulation in such cases. (7) In addition, the Commission launched a public consultation in June 2023, welcoming inputs for the upcoming review from stakeholders with rst-hand experience of FDI screening (businesses, legal practitioners, consultants, MSs’ national authorities officials), while insights from other groups (academia, civil society organisations, third states’ governments, etc.) were also appreciated. e consultation deadline ended on July 21 2023 – so far, there has been no report on the feedback received. (8) e feedback published on the Commission’s website seems to mostly back the points in the OECD report. 2.2.

e Bigger Picture: European Economic Security

e review of the Regulation must be seen against the backdrop of the Union’s novel trade policy objective: economic security. e recently presented European Economic Security Strategy (the Strategy) (9) has been described as a Zeitenwende (10) of the Union’s trade policy, possibly constituting a rst step away from the Union’s position on multilateralism. A potpourri of Union responses to ‘risks to European economic security’, the Strategy mixes considerations stretching over various policy and competence areas.

4. According to Article 3 para 1 FDI Screening Regulation, ‘Member States may maintain, amend or adopt mechanisms to screen foreign direct investments’ (emphasis added). 5. OECD, ‘Framework for Screening Foreign Direct Investment into the EU’. 6. Ibid, p. 8. 7. Ibid, p. 81. 8. Commission, ‘Screening of foreign direct investments (FDI) – evaluation and possible revision of the current EU framework’. 9. Commission and High Representative, ‘European economic security strategy’ JOIN (2023) 20 nal. 10. Andi Hoxhaj, ‘Securitizing the Economy’, Verfassungsblog, 19 July 2023; Cora Jungbluth, ‘ e European Economic Security Strategy: Zeitenwende in the EU’s Trade and Investment Policy?’, Global Europe, 22 June 2023.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

e review of the Regulation must be seen against the backdrop of the Union’s novel trade policy objective: economic security

e Strategy mentions FDI as possibly threatening national security. (11) In addition, it also refers to FDI screening in the context of protecting the Union against economic risks. (12) is is particularly noteworthy, as it seems that here, for the rst time, the Commission is admi ing to a possibility of FDI screening being conducted not solely on the grounds of national security. What exactly it envisages as screening on the grounds of economic security is, in the absence of a de nition of the notion, still unknown. Nonetheless, a (real) departure from the current national security and public order-approach seems unlikely: the Commission underlines in its public consultation call that if it proposes a revision of the Regulation, the exclusive focus of the framework on security and public order will be kept. (13) is is backed by the Commission’s call for evidence stating that ‘Investment screening must remain a targeted and limited tool of ‘last resort’ to identify and address risks to security and public order in the EU.’ (14) What seems conceivable, however, is the introduction of additional screening factors that ultimately relate to economic security considerations and may/must be taken into account when screening FDI, such as: • whether the target company is itself active or is a main supplier to an entity active in one of the sectors identi ed as high-risk by the Commission and the MS under the Strategy, • whether a government-linked investor’s home country has previously exercised economic coercion upon the Union or a MS, or • whether a government-linked investor is trying to pursue third-country industrial policy goals. (15)

11. JOIN (2023) 20 nal, p. 6. 12. JOIN (2023) 20 nal, pp. 3 and 8ﬀ. 13. Commission (n 7). 14. Commission, ‘Call for Evidence for an Initiative (without an impact assessment)’, p. 3. 15. Note that defence against third-country industrial policy could be a valid ground for justifying MS restricting the fundamental freedoms, see Christoph Herrmann, ‘Europarechtliche Fragen der deutschen Investitionskontrolle’, 3 Zeitschri für Europarechtliche Studien 22, 2019, pp. 429-476.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

2.3

e Next Steps: Possible Amendments to the Regulation

a) Making the introduction of an FDI screening mechanism by Member States mandatory

An obligation for MSs to screen FDI does not currently exist under the Regulation. e Regulation’s legislative history shows that the co-legislators, in a sense of compromise, opted for a framework that would leave MSs the nal decision of whether to adopt a screening mechanism or not

An obligation for MSs to screen FDI does not currently exist under the Regulation. (16) e Regulation’s legislative history shows that the co-legislators, in a sense of compromise, opted for a framework that would leave MSs the nal decision of whether to adopt a screening mechanism or not – in the hope that this approach, alongside political pressure from the Commission, would nudge MSs to adopting screening mechanisms on their own. National legislative developments over the last six years, since the Commission tabled its Regulation proposal, show that the Regulation has indeed incentivised several MSs to adopt screening legislation. While in 2017 only 11 MSs had an FDI screening mechanism in place, (17) the number rose to 21 by August 2023, with four MSs currently in the process of adopting a mechanism (Croatia, Greece, Ireland and Sweden) and only two MSs (Bulgaria and Cyprus) not having noti ed any formal steps to adopt one so far. (18)

Nonetheless, FDI screening cannot properly function EU-wide when there are still MSs without a screening mechanism. (19) erefore, the Commission is contemplating the introduction of such an obligation in the course of the Regulation’s review. (20) e introduction of such an obligation might at rst glance seem super uous since nearly all MSs have adopted or are preparing to adopt screening mechanisms. Considering that the renewed Regulation must go through the ordinary legislative procedure, it is likely that the two remaining MSs also adopt a screening mechanism until the Regulation’s entry into force in a few years. Nonetheless, this is not guaranteed, especially since political pressure might not suﬃce or the political climate might change. Hence, an obligation would guarantee persistence of national legislation.

16. Article 3 para 1 FDI Screening Regulation. 17. Commission, ‘First Annual Report on the screening of foreign direct investments into the Union’ COM (2021) 714 nal, p. 6. 18. Commission, ‘Second Annual Report on the screening of foreign direct investments into the Union’ COM (2022) 433 nal,p. 8; on the adoption of a mechanism in 2023 in Belgium and Luxembourg see ‘CELIS Update on Investment Screening – June 2023’, CELIS, 2 July 2023 and in Estonia see ‘CELIS Update on Investment Screening – February 2023’ CELIS, 2 March 2023; note that the introduction of an FDI screening mechanism is currently contemplated in Bulgaria, see Iliana Boycheva, ‘Country Note Bulgaria 2023’, CELIS, 14 August 2023. 19. OECD (n 19),p. 65. 20. Commission (n 13).

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

b) Making certain screening factors obligatory

FDI screening cannot properly function EU-wide when there are still MSs without a screening mechanism. erefore, the Commission is contemplating the introduction of such an obligation in the course of the Regulation’s review

In addition to imposing the introduction of a screening mechanism to MSs, the revised Regulation could foresee certain characteristics that national mechanisms must comply with. Today, these are enshrined in Article 3 paras 2-6 of the Regulation and are mostly guarantees of national administrative law, such as an obligation for national screening legislation to be transparent and non-discriminatory, to clearly set out the circumstances triggering the screening, the grounds for screening and the procedural rules applicable. As some authors however rightly point out, these are (or should be) mere concretisations of the rule of law principle (21) or a ‘detailed codi cation of the principles identi ed in the Court of Justice’s case law on freedom of movement of capital’. (22) It can thus be argued that the current Regulation hardly has a harmonising eﬀect, only bringing about a ‘light-touch harmonisation’. (23) A reviewed Regulation could thus introduce ‘genuine’ obligations, both procedural and substantive. One such (substantive) obligation could be the mandatory consideration of certain factors when screening FDI under national legislation. Currently, Article 4 provides a non-exhaustive list of factors that may be taken into consideration when determining whether a foreign direct investment is likely to aﬀect security or public order. e Commission could propose that MSs must consider certain key factors that will be identi ed by the Commission and the MSs in their upcoming risk analysis under the Strategy.

21. Steﬀen Hindelang and Andreas Moberg, ‘ e Art of Casting Political Dissent in Law: e EU’s Framework for the Screening of Foreign Direct Investment’, 5 Common Market Law Review 57, pp. 1427-1460. 22. Régis Bismuth, ‘Screening the Commission’s Regulation Proposal Establishing a Framework for Screening fdi into the EU’ 1 European Investment Law and Arbitration Review 3, 2018, pp. 45-60. 23. Hindelang and Moberg (n 20); Marcus Klamert and Stefan Bucher, ‘Investment Screening in der EU’ EuropäischeZeitschri für Wirtscha srecht, 8/2021,pp. 335-341; see however Jochem de Kok, ‘Towards a European framework for foreign investment reviews’, 1 European Law Review 44, 2019, pp. 24-49 arguing that ‘while the Regulation is not a typical harmonisation measure, it also provides for a degree of procedural and substantive harmonisation’.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

In this context, it is important to remember that, according to the third sentence of Article 4 para 2 TEU, national security is under the prerogative of MSs. (24) It is therefore solely up to a given MS to decide what constitutes a risk to its security. (25) A empts by the Union to de ne the scope of MSs’ screening mechanisms or to impose a certain national security concept could undermine this prerogative. However, the key element is that the ultimate decision on whether to permit or block a transaction ultimately lies with the MS concerned. erefore, an obligation to consider certain screening factors – while safeguarding MSs’ discretion and decision power on how to apply the factors – is unlikely to amount to a breach of MSs’ national security prerogative. c) Capturing intra-EU indirect FDI e exclusion of indirect FDI from the scope of the Regulation poses a signi cant risk to the effectiveness of the Union’s screening framework. (26) Essentially, not covering indirect FDI means that whenever a foreign investor invests through an EU-based subsidiary or company under their effective control which is not only set up as an investment vehicle but undertakes some degree of economic activity, there will be no screening – even if it is a foreign investor ultimately taking effective control of the target.

e exclusion of indirect FDI from the scope of the Regulation poses a signi cant risk to the eﬀectiveness of the Union’s screening framework

In the Xella decision of 13 July 2023, the Court dealt with precisely such a scenario. (27) e case evolved around Hungarian legislation allowing the government to block a seemingly domestic transaction in light of the foreign origin of the acquirer’s parent companies. e Court ruled that the transaction did not fall under the scope of the Regulation. (28) Following the Commission’s view, it argues that the Regulation only applies where there is a ‘foreign direct investment’ by a ‘foreign investor’ in the sense of Article 2 para 1 in connection with para 2, i.e., an investor of a third country. (30) Despite the seemingly wide meaning of the phrase ‘of a third country’ (which could speak for an a ribution of EU-based companies to their ultimate owner), (31) the Court states that this de nition solely encompasses undertakings ‘constituted or otherwise organised under the laws of a third country’. (32) It does clearly not cover ‘investments (…) made by undertakings registered in Hungary or in another Member State over which an undertaking registered in a third country has majority control’. (33) As a result, the Regulation does not apply to intra-EU investment, even if the EU investor is controlled by a foreign entity.

24. Article 4 para 2 Consolidated Version of the Treaty on European Union (TEU) OJ 2016 C202, p. 13; Article 1 para 2 FDI Screening Regulation. 25. Relying on national security grounds cannot, however, render EU law inapplicable or prevent judicial review under Union law, see Judgment of the Court of Justice of 6 October 2020, La Quadrature du Net and Others (C 511/18, EU:C:2020:791, para 99). 26. OECD (n 19),p. 81. 27. Judgment of the Court of Justice of 13 July 2023, XellaMagyarország (C-106/22, EU:C:2023:568); see Bálint Kovács, ‘National Interest and Freedom of Establishment: e CJEU’s Judgment in Xella’, CELIS, 14 August 2023 and Alberto Pérez, ‘ e Court of Justice draws a line in the sand for foreign investment screening: ruling in Xella Magyarország C-106/22’, EU Law Live, 26 July 2023. 28. Judgment of the Court of Justice, Xella, paras 29-31. 29. Advocate General Capeta’s Opinion of 30 March 2020 in Xella Magyarország (C-106/22, EU:C:2023:568, point 40). 30. As argued for example by Klamert and Bucher (n 22); Hindelang and Moberg (n 20); de Kok (n 22). 31. As opposed to om a third country. 32. Judgment of the Court of Justice, Xella, para 32. 33. Ibid,para 33.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

e Court’s conclusion deviates from AG Capeta’s Opinion taking a broader view on the Regulation’s de nition to also include indirect FDI. e AG argues that not subsuming indirect FDI in the scope of application would ‘run counter the purpose’ of the Regulation. (34) She bases this on the de nition of ‘foreign direct investment’, which pursuant to Article 2 para 1 is ‘an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links (…).’ (35) She concludes that ‘of any kind’ means any type of investment through which the foreign investor gains eﬀective participation in or control over an EU undertaking, thus including investment foreign investment through an EU-based company. Nonetheless, ‘of any kind’ arguably relates (merely) to the material characteristics of the investment, not to the way it is procedurally executed. is interpretation would mean that the Regulation should apply, e.g., to both asset and share deals, green eld and brown eld investment or should cover investment by major long-term loans to the target. (36) However, it does not necessarily relate to the structure through which the investment is procedurally handled – be it directly through the foreign investor or indirectly via an intermediary EU-entity. e exclusion of indirect FDI from the scope of the Regulation is further backed by Recital 10, which provides a safeguard against the circumvention of MSs’ screening mechanisms. Accordingly, MSs should screen ‘investments within the Union by means of arti cial arrangements that do not re ect economic reality and circumvent the screening mechanisms and screening decisions, where the investor is ultimately owned or controlled by a natural person or an undertaking of a third country’. (37) is shows the co-legislators speci cally had in mind scenarios of indirect FDI when dra ing the Regulation – and purposely chose to only cover such investments where they embody an arti cial arrangement meant to circumvent screening, and not when they correspond to economic reality. While there is no se led case law on what exactly an ‘arti cial arrangement that does not re ect economic reality’ is, it is certain that a scenario such as the one in Xella would not constitute such a case. Furthermore, the EP INTA-Commi ee had suggested expressly covering indirect FDI (however without specifying intraEU contexts), but this was ultimately rejected. (38) e AG’s view of encompassing indirect FDI seems reasonable from a teleological perspective – it is undeniably true that ‘what ma ers is who ultimately acquires control over the EU undertaking’. (39) Nonetheless, it is rather trying to save a shortfall in the Regulation’s eﬀectiveness – one that is, however, purposely embedded in it by the co-legislators. It is now up to the Commission to remedy this during the review of the Regulation. It is worth no-

34. Opinion in Xella, point 45. 35. Ibid, point 41 (emphasis added). 36. See Sophie Bohnert, ‘EU Investment Screening: A Roadblock in a One-Way Street?’ in Martin Winner (Ed.), Kontrolle ausländischer Direktinvestitionen in Mi el- und Osteuropa, Facultas, 2022, pp. 9-97 with further references. 37. Recital 10 FDI Screening Regulation (emphasis added). 38. See European Parliament, ‘Report on the proposal for a regulation of the European Parliament and the council establishing a framework for screening of foreign direct investments into the European Union’, A8 0198/2018; Bohnert (n 35) 13. 39. Opinion in Xella, point 43 (emphasis added).

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

While there is no se led case law on what exactly an ‘arti cial arrangement that does not re ect economic reality’ is, it is certain that a scenario such as the one in Xella would not constitute such a case

ting that the Xella judgment, unlike argued elsewhere, (40) did not rule out the possibility of national screening legislation to provide for intraEU screening. It merely established that intra-EU investment does not fall under the scope of the Regulation and substantiated the conditions for national screening mechanisms to comply with the freedom of establishment. us, there is no obstacle to legislative change capturing intra-EU indirect FDI.

e Fundamental Freedoms

National screening mechanisms must comply with primary law, in particular with the rules on freedom of establishment in Articles 49 and 54 TFEU (41) and the rules on free movement of capital in Article 63 TFEU. Following the Court’s case law, (42) national FDI screening mechanisms will, in principle, fall under the scope of a fundamental freedom in the following cases: - Free movement of capital: if they contain provisions for the screening of portfolio investment, both in intra-EU and extra-EU cases. - Freedom of establishment: if they contain provisions for the screening of intra-EU direct investment, provided the facts of a given case meet the Court’s conditions.

A key question is what standard of review applies when a national screening decision restricting a freedom can be justi ed under the ordre public exception of both Article 52 para 1 and Article 65 para 1 le er b. (44) In Xella, the Court reiterated that justi cation grounds ‘must, in the EU context and, in particular, as derogations from a fundamental freedom enshrined in the TFEU, be interpreted strictly.’ (45) erefore, ‘public policy and public security may be relied on only if there is a genuine and suﬃciently serious threat to a fundamental interest of society’. (46) A merely potential threat does not suﬃce. (47)

40. Nicolò Andreo i, ‘Screening of foreign direct investment within the Union: protection of essential interests or abuse of rights? (C-106/22, XellaMagyarország)’, EU Law Live, 25 July 2023. 41. Herrmann (n 14). 42. See Judgment of the Court of Justice of 11 September 2014, Kronos International (C-47/12, EU:C:2014:2200 para 29). 43. In intra-EU situations, the Court will examine the facts of a given case in addition to the national measure’s purpose to ascertain whether the freedom of establishment is applicable,see Judgment of the Court of Justice, Kronos International, para 37. 44. On Article 52 para 1 TFEU see Judgment of the Court of Justice, Xella para 63. 45. Judgment of the Court of Justice, Xella para 66. 46. Ibid; Judgment of the Court of Justice of 8 November 2012, Commission v Greece (C-244/11, EU:C:2012:694, para 67 with further case law references [emphasis added]). 47. Judgment of the Court of Justice of 5 November 2002, Commission v Germany (C-476/98, EU:C:2002:631, para 157).

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

e FDI Screening Regulation however seems to provide for a lower threshold, stipulating in Article 4 that the factors enumerated therein may be considered when determining whether a foreign direct investment ‘is likely to affect security or public order’. (48) e arising tension between the two distinct thresholds has so far been overcome in literature by relying on the possibility of different review standards in intra- and extra-EU contexts. (49) e Court’s threshold has been developed assessing intra-EU cases in which MS legislation was restricting another Union citizen’s or entity’s freedoms. (50) e Regulation however only covers third-country scenarios in which the Court seems to leave the MSs a greater leeway in restricting fundamental freedoms. e Court also ruled that its case law on intra-EU restrictions of the free movement of capital ‘cannot be transposed in its entirety to movements of capital between Member States and third countries, since such movements take place in a different legal context’. (51) e question arising ahead of the Regulation review is how to reconcile this line of case law and argumentation with the possible extension of the Regulation’s scope to intra-EU indirect FDI. In Xella the Court applied its intra-EU justi cation threshold requiring a ‘genuine and sufficient threat’. (52) e Court pointed out that ‘freedom of establishment is enjoyed, inter alia, by companies or rms constituted under civil or commercial law, provided that they are formed in accordance with the law of a Member State and have their registered office, central administration or principal place of business within the European Union, that is to say, companies or rms which have the nationality of a Member State’ (53) and thus disregarded arguments to the foreign origin of the company’s shareholders. (54) Given the Court’s unreadiness to ‘pierce the corporate veil’ and take into account the foreign origin of Xella’s ultimate owner, it seems that – if the revised Regulation will capture indirect FDI – the current standard of Article 4 will have to be adjusted so as to differentiate between intra- and extraEU situations.

e question arising ahead of the Regulation review is how to reconcile this line of case law and argumentation with the possible extension of the Regulation’s scope to intra-EU indirect FDI

48. Article 4 paras 1 and 2 chapeau FDI Screening Regulation (emphasis added). 49. Herrmann (n 14). 50. Erich Vranes, ‘EU-Grundfreiheiten und mitgliedstaatliche Investitionskontrolle’ in Martin Winner (Ed.), Kontrolle ausländischer Direktinvestitionen in Mi el- und Osteuropa, Facultas, 2022, pp. 99-119 and the cited case law. 51. Judgment of the Court of Justice of 18 December 2007, Ska everket v A (C-101/05, EU:C:2007:804, para 60). 52. Judgment of the Court of Justice, Xella paras 66-67 and 71. 53. Ibid, para44. 54. Ibid,para46.

10 10

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

4. A Suﬃcient Legal Basis? Knowing that an amendment of the Regulation is highly probable and looking at the possible changes described under point 2.3, a key question is whether these can be achieved under the current legal basis – Article 207 para 2 TFEU. e Commission’s decision to base the Regulation on Article 207 TFEU was anything but uncontroversial: not only is it one of the most contentiously discussed aspects of the Regulation in scholarship, (55) also the colegislators seem to have held divergent views on the relevant competence for an FDI screening instrument. (56) Given the complexity of the delimitation of Union competences in general and the intricate web of possible competences for an FDI screening mechanism in particular, the review of the Regulation is likely to cause further discussion. e Commission has so far indicated that the basis for the revised Regulation will likely continue to be Article 207 TFEU, ‘possibly along with Article 114 TFEU’. (57)

Given the complexity of the delimitation of Union competences in general and the intricate web of possible competences for an FDI screening mechanism in particular, the review of the Regulation is likely to cause further discussion

55. See, e.g., Jacques H.J. Bourgeois (Ed.), EU Framework for ForeignDirect Investment Control, Wolters Kluwer, 2020; Editorial Comments, ‘Playing by the rules – Free and fair trade’, 2 Common Market Law Review 55, 2018, pp. 373-386;for overview see Sophie Bohnert, ‘EU-Investitionskontrolle – Kompetenzrechtliche Voraussetzungen und Grenzen’ in Myriam Becker et al (Eds.), Gesellscha liche Herausforderungen – Öﬀentlich-rechtliche Möglichkeiten, Jan Sramek,2020. 56. European Parliament, ‘Proposal for a Union Act submi ed under Rule 46(2) of the Rules of Procedure on the Screening of Foreign Investment in Strategic Sectors’ B[8-0000/2017]; see also European Council, ‘Conclusions – 22 and 23 June 2017’. 57. Commission (n 13), p. 2.

11 11

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

4.1. Article 207 as the Legal Basis of the FDI Screening Regulation e Regulation was enacted on the basis of Article 207 para 2 TFEU, the Union’s exclusive Common Commercial Policy (CCP). According to Article 207 para 1, the scope of the CCP covers ‘foreign direct investment’, which the Court de ned in its Opinion 2/15. (58) Given the Regulation’s overlapping de nition of FDI, (59) Article 207 seemed like the obvious choice for the Commission to base its Regulation proposal on. However, Opinion 2/15 further clari es that for a Union act to fall within the scope of the CCP, it is necessary that it relate speci cally to trade with one or more third states ‘in that it is essentially intended to promote, facilitate or govern such trade and has direct and immediate effects on it’. (60) Merely having implications for such trade is not enough. (61) e Regulation aims to create a framework for the MS to restrict foreign investors’ commercial activity in the Union. Looking at the Regulation as it currently stands, doubts have been raised on how direct and immediate its effect on international trade is, given the Regulation’s ‘light-touch harmonization’ approach and its merely procedural obligations (that are already guaranteed by Union principles and the Court’s case law). (62) However, if the Regulation will be revised to contain an obligation for MS to introduce a screening mechanism, there is no room le for doubt that it would constitute an act with ‘direct and immediate effects’ on trade with one or more third states, as it would mean that FDI ows into the Union would have to undergo some form of screening. is is even more so if the revised Regulation will further harmonise certain screening factors, thus providing a uniform screening approach and, most importantly, minimising the risk of MS creating toothless mechanisms with limited effect on international trade. 4.2. Article 114 – An Additional Legal Basis for the Reviewed Regulation For a long time, Article 114 TFEU was seen as a ‘loi de plein pouvoir’ containing a general authorisation for the Union to regulate the internal market. (63) However, the Court explicitly rejected such an interpretation and laid down precise conditions for the usage of Article 95 EC Treaty (ex Article 114 TFEU) as a legal basis. (64) Measures under Article 114 TFEU must be intended to improve the conditions for the establishment and functioning of the internal market, which is typically the case when a Union act contributes to removing obstacles to funda-

58. Opinion of the Court of Justice of 16 May 2017, Accord de libre-échange avec Singapour (2/15, EU:C:2017:376, para 80). By citing its se led case law on the de nition of foreign investment stemming from the free movement of capital, the Court eﬀectively ruled that FDI can fall under the scope of both the CCP and the rules on the free movement of capital. is arising tension was not resolved by the Court and disregarded by the Commission in its 2017 proposal, as well as in its call for evidence for a new legislative proposal, see Commission (n 13). 59. Article 2 para 1 FDI Screening Regulation; Hindelang and Moberg (n 20); Herrmann (n 14). 60. Opinion of the Court of Justice, Singapore FTA, para 25. 61. Ibid. 62. Hindelang and Moberg (n 20). 63. Christian Tietje, ‘Artikel 114 AEUV’ in Eberhard Grabitz, Meinhard Hilf and Martin Ne esheim (Eds.), Das Recht der Europäischen Union: EUV/AEUV, C.H.Beck, 2023. 64. Judgment of the Court of Justice of 5 October 2000, Germany v Parliament and Council (Tobacco Advertising I) (C-376/98, EU:C:2000:544, paras 76-88).

12 12

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

While a revised Regulation would not contribute to removing trade obstacles between MSs, but in fact create them (by capturing intra-EU investments or by harmonising screening factors), it can still be argued that the subsidiarity principle is ful lled

mental freedoms. (65) In addition, Article 114 can be used for measures aiming to eliminate distortions of competition liable to result from disparities between national rules, (66) as is the case for the Regulation review. If there is a majority of MSs with, but still some MSs without, screening mechanisms, then a foreign investor could choose to invest in a MS without a mechanism and then take advantage of the freedom of establishment to gain access to the screening MS’s markets. A key consequence of choosing Article 114 TFEU, a shared competence, as an additional legal basis is the applicability of the subsidiarity principle, requiring the Commission to justify that Union action is necessary and has additional value compared to MS action. (67) Generally, there is a strong presumption for both necessity and added value where a Union act seeks to harmonise MSs’ legislation so as to resolve trade obstacles and improve the functioning of the internal market. (68) Furthermore, the Court deems the necessity test ful lled where there are ‘immediate eﬀects on trade, and, accordingly, intraCommunity trade’. (69) While a revised Regulation would not contribute to removing trade obstacles between MSs, but in fact create them (by capturing intra-EU investments or by harmonising screening factors), it can still be argued that the subsidiarity principle is ful lled. e main objective of the revised Regulation – to create an eﬀective FDI screening framework – makes the harmonisation of MSs’ legislation necessary, which cannot be achieved by MSs action alone. (70)

4.3. A Dual Legal Basis? According to the Court’s se led case law, a Union measure should be based on the legal basis required by the aim and content of the measure in question. If a measure pursues two aims or has several components and if one of those is identi able as the main one, the measure must be founded on the legal basis corresponding to the main or predominant objective or component. (71) If however a measure pursues several objectives or has several components that are ‘inseparably linked without one being incidental to the other’, the measure will have to be based

65. Ibid, paras 83-84. 66. Ibid, para 84. 67. Marcus Klamert, ‘Article 5 TEU’ in Manuel Kellerbauer, Marcus Klamert and Jonathan Tomkin (Eds.), e EU Treaties and the Charter of Fundamental Rights, OUP, 2019. 68. Ibid. 69. Judgment of the Court of Justice of 9 October 2001, Netherlands v Parliament and Council (C-377/98, EU:C:2001:523, para 32). 70. Ibid: ‘ e objective pursued (...), to ensure smooth operation of the internal market by preventing or eliminating diﬀerences between the legislation of the various Member States, could not be achieved by action taken by the Member States alone.’ 71. Judgment of the Court of Justice of 6 September 2012, Parliament v Council (C-490/10, EU:C:2012:525, paras 44-45).

13 13

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

on the corresponding legal bases, provided the procedures laid down therein are compatible with each other. (72) e main objective and content of the reviewed Regulation can only be determined once a nal regulation text is available. Nonetheless, some preliminary arguments can already be shared at this stage. Regarding a possible obligation for MSs to adopt screening mechanisms, this should be possible under Article 207 TFEU alone. A Union act obligating MS to adopt national screening mechanisms would have an ‘immediate and direct effect on trade between the Union and one or more third states’, thus classifying as a CCP-act. (73) Article 114 does not apply because the purpose of such an obligation does not lie in the approximation of national laws. While the notion of ‘approximation’ is generally interpreted widely, it does require that national laws on the subject ma er already exist, so that they can in turn be approximated. (74) Since two MSs since do not have screening mechanisms, this is not ful lled. If the revised Regulation will capture intra-EU investment in order to enhance the effectiveness of the framework, Article 207 could be a sufficient legal basis. Clearly, capturing intra-EU investment will have an effect on the internal market. However, this would be an ancillary aspect to the revised Regulation’s main objective and to its predominant content – regulating FDI ows from third countries possibly done via EU-based companies in the ownership or under the effective control of a foreign entity. A dual legal basis would not be possible in such a case since the internal market effect would be merely ‘incidental’. If the Commission decides to propose making certain screening factors obligatory so as to approximate national screening legislation, this will not only add to the ‘direct and immediate effectiveness’ of the Union act with regard to international FDI ows, but also constitute a harmonising act that will ultimately require the use of Article 114 TFEU in addition to Article 207 TFEU. Union secondary law amending national laws with the aim to approximate them to Union-wide standards – as would be the case for making certain screening factors obligatory – is the textbook example for an Article 114-act. (75) In that case, given that such approximation would lead to a more direct effect on trade with third states, the purpose and content of the revised Regulation – corresponding to both Article 114 and Article 207 TFEU – would be inseparably linked, without any of the components being merely ‘incidental’ to the other. us, a revised Regulation making both the introduction of a screening mechanism and certain screening factors obligatory would need to be based on both Articles 114 and 207 TFEU.

72. Ibid, paras 46-47. 73. See point 4.1. 74. Stefan Korte, ‘Artikel 114’ in Christian Calliess and Ma hias Ruﬀert (Eds.), EUV/AEUV. Das Verfassungsrecht der Europäischen Union mit Europäischer Grundrechtecharta, C.H.Beck, 2022. 75. Ibid.

14 14

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

5. Conclusion As entry-level legislation, the FDI Screening Regulation comes with several de ciencies – most notably, its ‘light-touch harmonisation’ approach has resulted in deep fragmentation of MSs’ investment screening legislation. e OECD has identi ed a total of 12 shortfalls in efficiency and effectiveness of the Regulation which should now be addressed (and hopefully at least partly remedied) in the course of a review of the Regulation by the Commission. is Long-Read analyses three possible substantive changes to the Regulation which would ensure that every MS: a) has a screening mechanism in place and b) must consider certain (harmonised) factors when screening foreign transactions, thus minimising disparities in screening across the Union. In addition, c) seemingly domestic or European transactions should also undergo screening when the entity gaining ultimate control over a target is foreign. e la er however would constitute a restriction on European companies’ freedom of establishment, thus requiring justi cation in light of the ordre public exception. e Court’s Xella decision of July 13 2023 provides a high threshold to justify the restriction of seemingly European companies’ freedoms, even when they are ultimately foreign-held. A key question for the review of the Regulation will be the sufficiency/suitability of its current legal basis – Article 207 TFEU. Finding the right legal basis for an amendment will be no easy exercise – already the proposal for the current Regulation sparked a discussion on the intricate web of competences for FDI screening. Not only does FDI fall into the ambit of both the CCP and the free movement of capital, thus sparking a horizontal con ict, but the screening also takes place on grounds of security and public order, which are under the prerogative of MSs. It is argued that the Union’s CCP competence suffices for requiring MSs to adopt a screening mechanism, as well as for capturing intra-EU indirect FDI. If however the Commission plans to harmonise obligatory screening factors, recourse to Article 114 TFEU may be required. A revised Regulation making both the introduction of a screening mechanism and certain screening factors obligatory should be based on both Articles 114 and 207 TFEU.

15 15

A revised Regulation making both the introduction of a screening mechanism and certain screening factors obligatory should be based on both Articles 114 and 207 TFEU.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

News Highlights 9 to 13 October 2023

General Court to hear case concerning damages resulting from the adoption of rules on speci cations for alarm and signal weapons Monday 9 October

READ MORE ON EU LAW LIVE

General Court to hear seven more actions for annulment concerning Decision of the SRB on the calculation of the 2023 ex-ante contributions to the SRF

Oﬃcial publication was made of a case concerning an action, where the General Court has been sought, by the applicant, to nd the EU liable for damages caused as a result of the adoption, by the Commission, of Commission Implementing Directive (EU) 2019/69 laying down technical speci cations for alarm and signal weapons: Keserű Művek v Commission (T-519/23).

Monday 9 October

Court of Justice to clarify the concept of excessive requests for the purposes of Article 57(4) of the GDPR

Preliminary ruling request on the interpretation of Arts. 18 and 21 TFEU to the extradition of EU nationals

Monday 9 October

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of a request for a preliminary ruling from the Verwaltungsgerichtshof (Austria) lodged on 6 July 2023 concerning the interpretation of the concept of excessive requests for the purposes of Article 57(4) of the GDPR: Österreichische Datenschutzbehörde (C-416/23).

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of 7 actions against the Single Resolution Board (SRB) for the calculation of the 2023 exante contributions to the Single Resolution Fund.

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of a request for a preliminary ruling from the Audiencia Nacional (Spain) lodged on 28 June 2023 concerning a situation for extradition, requested by the Kingdom of Morocco in relation to a citizen with dual Moroccan and Dutch nationality, in view of the response of the Dutch authorities, to whom the request for extradition submi ed by the Kingdom of Morocco was communicated: Dimas (C-402/23).

16 16

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Consumer Credit Directive for safer borrowing, approved by the Council

Action concerning alleged failure to act of the Council, within the context of restrictive measures tackling Russia’s threatening of Ukraine’s territorial integrity, published in OJ

Monday 9 October

READ MORE ON EU LAW LIVE

e Council gave its nal approval to the Consumer Credit Directive, signaling a signi cant step toward improving consumer protection for credit applicants in the EU, particularly in the digital era.

A case concerning an alleged misreference of the yacht ‘Valerie’ in the summary of reasons in Annex I to Decision 2014/145/CSFP and Regulation (EU) 269/2014, supplemented by Council Decision (CFSP) 2022/582 on the adoption of restrictive measures concerning actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, was oﬃcially published in the OJ: Sulberg Services v Council (T-409/23).

Council adopts RefuelEU aviation initiative to decarbonize European aviation sector and new Renewable Energy Directive to raise the share of renewable energy

Action for annulment against Commission decision rejecting internal review of decision to approve French strategic plan on common agricultural policy, published in OJ

Monday 9 October

READ MORE ON EU LAW LIVE

e Council adopted a new regulation as part of the “ReFuelEU aviation” initiative, aiming to reduce the carbon footprint of the aviation sector in the EU, and the new Renewable Energy Directive, aimed at signi cantly increasing the share of renewable energy in the EU energy consumption.

Oﬃcial publication was made of a case concerning the annulment of the Commission decision contained in its le er of 5 May 2023 (Ares(2023)3182983), by which the Commission rejected the request for internal review, lodged pursuant to Article 10 of the Aarhus Regulation: ClientEarth and Collectif Nourrir v Commission (T-399/23).

Council approves Regulation on geographical indication protection for cra and industrial products

EU restrictive measures on chemical weapons prolonged for another year

Monday 9 October

Tuesday 10 October

READ MORE ON EU LAW LIVE

On 9 October, the Council extended for three years, until 16 October 2026, the sanctions regime against the proliferation and use of chemical weapons, as well as the existing restrictive measures against persons and entities for another year, until 16 October 2024.

e Council adopted a regulation on geographical indication protection for cra and industrial products, which is one of the key proposals under the Intellectual Property Action Plan, presented by the European Commission in November 2020.

17 17

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Court of Justice to hear case on the compatibility of the Convention for avoidance of double taxation between France and Belgium with EU fundamental rights and freedoms Tuesday 10 October

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of a case concerning a preliminary ruling request, by which the referring court (the First Instance Court of Luxembourg (Belgium)) has sought clari cation regarding the compatibility of the Convention between France and Belgium for the avoidance of double taxation with the free movement of workers, the right to an eﬀective remedy and to a fair trial, and the principle of proportionality: Monmorieux (C-380/23).

Commission Decision on the State aid implemented by Denmark for USO compensation to Post Danmark, published in OJ Tuesday 10 October

Preliminary ruling request on EU Law and residence permit eligibility for Union citizen parents of minors Tuesday 10 October

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of a request for a preliminary ruling from the Sozialgericht Detmold (Germany) lodged on 29 June concerning the eligibility for a residence permit for the purpose of care and custody of a minor child who is a Union citizen of a Member State other than the host country.: Jobcenter Arbeitplus Bielefeld (C-397/23).

Council approves EDIRPA to enhance common procurement in EU defence industry Tuesday 10 October

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of Commission Decision 2023/2388 on the state aid SA.57991 – 2021/C (ex 2021/NN), implemented by Denmark for USO compensation to Post Danmark A/S for 2020.

e Council adopted the European Defence Industry Reinforcement through common Procurement Act (EDIRPA), a regulation designed to bolster the European defense industry through coordinated procurement eﬀorts among EU member states.

ECtHR: Judge's suspension in Pengezov v. Bulgaria violates fair hearing and privacy rights

Commission will not extend the Block Exemption Regulation for shipping consortia

Tuesday 10 October

READ MORE ON EU LAW LIVE

e European Commission decided that the Consortia Block Exemption Regulation (‘CBER’) no longer promotes competition in the shipping sector and therefore it will let it expire on 25 April 2024.

e European Court of Human Rights delivered its judgment in Pengezov v. Bulgaria (Application No. 66292/14) concerning the suspension of a judge from his duties due to criminal proceedings initiated against him for alleged oﬀenses commi ed in his previous judicial roles.

18 18

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Regulation 2023/2131 enhancing digital information exchange in terrorism cases, published in OJ

State Aid approval decisions in the Oﬃcial Journal Wednesday 11 October

READ MORE ON EU LAW LIVE

Information was published regarding the European Commission’s decisions pursuant to Articles 107 and 108 TFEU not to raise objections against the following State aid measures.

Wednesday 11 October

Directive 2023/2123 aligning data protection rules with counterterrorism measures, published in OJ

Commission Recommendation on critical technology areas for the Union’s economic security, published in OJ

Wednesday 11 October

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of Regulation (EU) 2023/2131 of the European Parliament and of the Council of 4 October 2023 amending Regulation (EU) 2018/1727 of the European Parliament and of the Council and Council Decision 2005/671/JHA, as regards digital information exchange in terrorism cases.

READ MORE ON EU LAW LIVE

Oﬃcial publication was made of Directive (EU) 2023/2123 of the European Parliament and of the Council of 4 October 2023 amending Council Decision 2005/671/JHA as regards its alignment with Union rules on the protection of personal data, aiming to ensure consistent data protection practices in the context of counterterrorism eﬀorts.

Oﬃcial publication was made of Commission Recommendation 2023/2113 of 3 October 2023 on critical technology areas for the EU’s economic security for further risk assessment with Member States.

Court of Justice: An electric bicycle is not covered by the obligation to insure motor vehicles

Court of Justice: Eﬀectiveness of tax supervision does not justify restrictions on the free movement of capital

ursday 12 October

READ MORE ON EU LAW LIVE

e Court of Justice handed down its judgment in KBC Verzekeringen (C-286/22), a case concerning the interpretation of Directive 2009/103 on insurance against civil liability in respect of the use of motor vehicles (as amended).

READ MORE ON EU LAW LIVE

In BA (C-670/21), the Court of Justice rendered its judgment concerning a preliminary ruling request, whereby it was asked to assert the compatibility of national legislation on the calculation of inheritance tax with the free movement of capital, as prescribed by Articles 63, 64, and 65 TFEU.

19 19

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Court of Justice clari es certain concepts in the 2014 Guidelines on State aid for environmental protection and energy ursday 12 October

Application of Article 25 of Regulation No 1215/2012 is subject to an international element, not ful lled solely by the choice of court, suggests AG Richard de la Tour

READ MORE ON EU LAW LIVE

ursday 12 October

e Court of Justice delivered its judgment in Est Wind Power (C-11/22), a preliminary reference from the Administrative Court of Tallinn concerning the interpretation of paragraph 19(44) and footnote 66 to paragraph 126 of the Guidelines on State aid for environmental protection and energy 20142020 (‘the 2014 Guidelines’).

Regulation 650/2012 does not preclude that third-country nationals be impeded from choosing the law of their home country to govern their succession, holds Court of Justice ursday 12 October

READ MORE ON EU LAW LIVE

e Court of Justice handed down its judgment in OP (Case C-21/22), a case concerning the interpretation of the EU Succession Regulation (Regulation 650/2012).

Court of Justice: Ne bis in Idem principle requires the taking into account of all relevant information concerning facts of previous criminal proceedings leading to a nal decision ursday 12 October

READ MORE ON EU LAW LIVE

Advocate General Richard de la Tour rendered his Opinion in Inkreal (C-566/22), a case regarding a preliminary ruling request from the Supreme Court of the Czech Republic, which has sought, in essence, clari cation on the interpretation of Article 25(1) of Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial ma ers.

AG Collins: EU-Algeria Association Agreement does not preclude adjustment of survivors’ pension to take account of cost of living ursday 12 October

READ MORE ON EU LAW LIVE

Advocate General Collins handed down his Opinion in X v. Raad van bestuur van de Sociale verzekeringsbank (C-549/22), a preliminary reference from the Higher Social Security and Civil Service Court in the Netherlands concerning the interpretation of the Euro-Mediterranean Association Agreement between the EU and Algeria.

State Aid approval decisions in the Oﬃcial Journal

READ MORE ON EU LAW LIVE

e First Chamber of the Court of Justice rendered its judgment in INTER CONSULTING (C-726/21), a case concerning a preliminary ruling request, whereby the referring court sought the interpretation of Article 54 of the Convention implementing the Schengen Agreement between the Benelux, Germany, and French Republic on the gradual abolition of checks at their common borders, and Article 50 of the Charter of Fundamental Rights.

ursday 12 October

READ MORE ON EU LAW LIVE

Information was published regarding the European Commission’s decisions pursuant to Articles 107 and 108 TFEU not to raise objections against the following State aid measures.

20 20

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Implementing Regulation imposing provisional anti-dumping duty on imports of electrolytic manganese dioxides from China, published in OJ Friday 13 October

Commission adopts restorative measures to unwind the acquisition of G IL by Illumina Friday 13 October

READ MORE ON EU LAW LIVE

e European Commission, following its decision to prohibit the transaction, adopted restorative measures requiring Illumina to undo its acquisition of G IL.

Oﬃcial publication was made of a Commission Implementing Regulation imposing a provisional anti-dumping duty on imports of electrolytic manganese dioxides originating in the People’s Republic of China.

Commission sends formal request for information to X under the Digital Services Act

European Public Prosecutor's Oﬃce dismisses charges in European parliamentary assistant employment case

Friday 13 October

READ MORE ON EU LAW LIVE

e European Commission sent to X a formal request for information under the Digital Services Act (DSA), following indications of the alleged spreading of illegal content and disinformation, in particular the spreading of terrorist and violent content and hate speech.

In an announcement made on October 11, 2023, the European Public Prosecutor’s Oﬃce has chosen to close the proceedings related to a case involving the suspected ctitious employment of a European Parliamentary Assistant.

EU’s action to improve situation of people with disabilities has minor impact, European Court of Auditors’ report shows

General Court rejects the stay of execution of EU-US Privacy Shield in Latombe v Commission

Friday 13 October

READ MORE ON EU LAW LIVE

Friday 13 October

READ MORE ON EU LAW LIVE

e President of the General Court issued an order in Latombe v Commission (case T-553/23 R), concerning a request for the stay of execution of Commission Implementing Decision (EU) 2023/1795, which con rms, under Regulation (EU) 2016/679, the adequate level of personal data protection provided by the EU-US Privacy Shield framework.

New report issued by the European Court of Auditors showed that the EU’s action to improve the situation of people with disabilities has made li le diﬀerence in real life, as the key equality indicators have barely improved, and people with disabilities still struggle to get a job and remain more susceptible to poverty.

21 21

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Commission launches stakeholder survey on dra guiding principles for safe AI development Friday 13 October

READ MORE ON EU LAW LIVE

e Commission launched a stakeholder survey on the dra International Guiding Principles for organisations developing advanced AI systems, which have been agreed upon by G7 ministers for stakeholder consultation.

Insights, Analyses & Op-Eds EU Agencies and Financial Regulation: the proliferation of a new mode of governance by Jonathan Bauerschmidt and Diane Fromage

READ MORE ON EU LAW LIVE

Op-Ed, part of a Symposium on EU Agencies, examining the governance model of the European System of Financial Supervision, and its composing agencies and bodies, which, according to the authors appears to be crucial at this stage, not only because of its numerical importance and determining role in EU nancial integration but also because these agencies have been subject to intensive litigation before the Union Courts.

22 22

e ITD judgment: the European Commission’s obligation to initiate the formal investigation procedure when faced with serious diﬃculties in analysing the State aid nature of national measures by Nieves Bayón Fernández

READ MORE ON EU LAW LIVE

Analysis of the Court of Justice’s judgment in ITD (Case T525/20), a case concerning the partial annulment of the underlying European Commission Decision SA.52489 and SA.52658, which had found (without initiating the formal investigation) that three national measures implemented in favour of PostNord Logistics did not constitute State aid.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Speci c features of conservation objectives under the Habitats Directive and further challenges to prove a persistent breach of EU nature conservation legislation (C-116/22, Commission v Federal Republic of Germany) by Francesco Male o

READ MORE ON EU LAW LIVE

Op-Ed on the Court of Justice’s judgment in Commission v Federal Republic of Germany (C-116/22), a case regarding Germany’s failure to comply with its obligations under the Habitats Directive, which, according to the author, is particularly interesting due to the in-depth analysis around the requirements of conservation objectives to be set under Article 4(4) of that Directive, as well as for the further considerations on the standard of evidence to be met by the Commission in proving repeated and persistent infringements of the same Directive.

'Time out' for the EU cooperation mechanism in Austria due to Xella (C-106/22) by Judith Feldner and Felix Frommelt READ MORE ON EU LAW LIVE

Op-Ed, part of a Symposium on the Xella Magyarország case, where the authors argue that the issue of whether or not to get the European Commission and other Member States involved via the EU cooperation mechanism, within the context of the Austrian Investment Control Act (ICA) incorporating the EU cooperation mechanism as an integral part of any investment control proceedings, must be resolved by adhering to the primacy of EU law until the national legislator amends the procedural provisions of the ICA.

23 23

e intertwined fates of the ‘economic advantage’ and the ‘selectivity’ conditions of a State aid conferred by a tax measure (C-831/21, Fachverband Spielhallen eV and LM v Commission) by Camilla Cozzani

READ MORE ON EU LAW LIVE

Analysis of the Court of Justice’s judgment in Facheverband Spielhallen eV and LM (C-831/21), a case concerning the absence of State aid in regard to the deductibility from the tax base of a levy borne by a public casino, where the Court clari ed that both of the two components of a selective advantage need to undergo a comparative test with the reference system.

Procedural Overkill, or how Lu hansa (Nearly) Fell Down Again at the reshold of Standing (Rheinland-Pfalz v Lu hansa, C-466/21 P) by Roberto Caranta

READ MORE ON EU LAW LIVE

Op-Ed on the Court of Justice’s judgment in Rheinland-Pfalz v Lu hansa, C-466/21 P), a case concerning the challenging of a State aid decision, which, according to the author, demonstrates, strikingly, the growth of formalism in the Courts’ standing tests that seems to be devised ad hoc just to give a simulacrum of reasoning.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

e Contribution of EU Agencies to Ma- What is seen cannot be unseen. An naging the COVID-19 Pandemic: a Poly- emerging standard for interim measucentric approach to Public Health res at the General Court? And what comes next in Amazon v Commission by Ruben Della Pia and READ MORE ON EU LAW LIVE

Mariolina Eliantonio

by Stijn Huijts

Op-Ed, part of the Symposium on EU Agencies, noting, according to the authors, the increasingly prominent role these bodies are assuming as a systemic force, particularly by undertaking a wide range of actions, showing their capability to eﬀectively manage critical situations comprehensively, providing valuable insights to their 'peers' and other institutional stakeholders throughout the entire duration of these challenges.

What is the signi cance of EFTA Court rulings for the ECJ? - AG Emiliou’s opinion in Case C-128/22 BV NORDIC INFO v Belgian State by Mads Andenas and Carl Baudenbacher

READ MORE ON EU LAW LIVE

Op-Ed on the signi cance of the EFTA Court case law for the Court of Justice, within the context of AG Emiliou’s Opinion in BV NORDIC INFO v Belgian State ( C-128/22) concerning the right to travel during the COVID restrictions on free movement.

24 24

READ MORE ON EU LAW LIVE

Op-Ed on the General Court’s judgment in Amazon v Commission (T-367/23 R), discussing an emerging standard for interim measures cases involving disclosure of con dential information, and the diﬃcult decision the judges hearing the main application will face.

On EU agencies with enforcement powers by Miroslava Scholten

READ MORE ON EU LAW LIVE

Op-Ed, part of the Symposium on EU Agencies, on the EU enforcement agency model as an emerging actor in the EU governance landscape, which, as it argues, necessitates further public and academic debate to ensure the democratic credentials of the Union and the rule of law.

Nº158 · OCTOBER 14, 2023

Weekend

Edition stay alert keep smart

Library - Book Review

Merijn Chamon READ ON EU LAW LIVE

Hans Kundnani Eurowhiteness: Culture, Empire and Race in the European Project is book, authored by Hans Kundnani, critiques the foundational myths of the EU and according to the reviewer, while it may not resonate with everyone, it's worth a read. e primary critique in the text is Kundnani's construction of a "strawman" argument: he creates an exaggerated image of the EU as a magical, all-encompassing entity for critique purposes, rather than a realistic portrayal of the EU's intentions. e book also touches upon the colonial origins of the EU and argues that the EU, which was founded a er World War II, had a colonial role by allowing European states to maintain their colonial possessions. However, this argument overlooks the broader context, such as the declining power of European states post-WWI, which led to the creation of supranational cooperation projects, including the EU, to maintain peace and relevance internationally. According to the reviewer, the author also suggests that the EU is now a neoliberal entity, ignoring the EU's commitment to social policies, as evident in the European Pillar of Social Rights.

25 25

Permission to use this content must be obtained from the copyright owner

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the publishers.

stay alert keep smart

Editor-in-Chief: Daniel Sarmiento In-Depth and Weekend Edition Editor Sara Iglesias Sánchez

Editorial Board: Maja Brkan, Marco Lamandini, Adolfo Martín, Jorge Piernas, Ana Ramalho, René Repasi, Anne-Lise Sibony, Araceli Turmo, Isabelle Van Damme, Maria Dolores Utrilla and Maria Weimer.

Subscription prices are available upon request. Please contact our sales department for further information at

subscriptions@eulawlive.com

EU Law Live 2695-9585 EU Law Live Weekend Edition 2695-9593

ISSN

26 26

www.eulawlive.com

27 27