• BEL FEB announced screening mechanism for foreign investments has been agreed.
• After over 3 years of negotiations, federated entities and federal government finally agreed on draft cooperation agreement for mechanism to screen foreign investments.
• Follows EC May 2019 issued update on actions against hybrid threats.

Overview

• In principle aims to set by 1 January 2023 a mechanism to safeguard national security, public order, strategic interests of all entities concerned (regions, communities, state).
• Interfederal Filtering Committee (CFI) created, made up of representatives of various public services, president delegated by FPS where the secretariat will also be located.
• Certain investments will therefore have to be notified if they may have an impact on security, public order or strategic interests and if there is a lasting direct relationship.
• Relationship between foreign investor and company or entrepreneur; the draft text clarifies what can be considered such an investment; further details on this provided.
• During the procedure, investment is therefore temporarily put on hold; if indications of a possible risk, a screening procedure is then launched.
• After examination, the investment can then be either authorized, admitted with corrective measures or rejected; CFI can also impose fines if investor ignores points.
• In addition, in certain cases, CFI may also open an investigation on its own initiative.

Context

• Reflection began post EC proposal for framework to screen foreign direct investments.
• Reg certain principles to ensure legal certainty in Member States that use mechanism.
• Further, intention is also to cooperate more with EC, other Member States in this area.
• At Belgian level, however, process was very difficult as there were many discrepancies.
• So the process took longer than initially expected; in addition, the process is not yet complete since the proposal in agreement must still be analyzed by Council of State.
• Then subject to 2nd reading in consultation committee; text as agreed Jun. 1 not yet final but can be submitted to parliaments pre-31 December 2022, effective on 1 January 2023.

Impact on Country's Attractiveness

• BEL FEB, together with VOKA, UWE, BECI, always defended certain principles so that the mechanism does not harm Belgium's attractiveness as an investment country.
• It agrees with a single, interfederal system, to avoid fragmentation and not to discourage investors through screening carried out by different bodies.
• In effective establishment of new mechanism, efficiency, predictability must be basic.
• Reasonable deadlines to examine applications must be set so that Belgium remains attractive and competitive in relation to neighboring countries.
• Also crucial this future mechanism offers all the guarantees in terms of legal certainty, both for Belgian companies and their foreign investor partners.
• In addition, important to set up sustained dialogue between the authorities involved in screening mechanism and private sector, mainly re future technological developments.