Skip to main content
Top

2024 | OriginalPaper | Chapter

The Evolving Concept of National Security and Foreign Investment Screening Procedures with Particular Reference to the Italian Regime

Author : Maria Rosaria Mauro

Published in: Weaponising Investments

Publisher: Springer Nature Switzerland

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

Since the 1970s, foreign direct investment (FDI) flows have experienced substantial growth due to the liberalization and protection measures introduced by states. However, this growth came to a temporary stop with the financial and economic crisis of 2007–2010 due also to restrictive measures adopted by states to protect national economies (among which screening procedures). COVID-19 has further impacted FDI flows since many governments have made health decisions to contain the diffusion of the pandemic and economic measures to limit its negative consequences on the domestic economy. In the present context, states more often perceive a need to protect their national security by limiting foreign investments. In fact, national security is a dynamic and evolving concept. Over the years, the scope of this concept has extended going beyond the idea of military protection to include the safeguarding of other public goals that are crucial for state safety or domestic welfare. Currently, economic considerations are increasingly taken into account by governments when assessing their national security. This essay examines the evolving concept of national security and its impact on the FDI approach followed by states, focusing particularly on the recent amendments of the Italian legal framework on foreign investments. This author postulates the idea that, in extraordinary times, extraordinary measures devoted to protecting the national economy are justified. However, adopting an overly expansive interpretation of national security could create new instability in the foreign investment legal framework with negative repercussions on FDI flows.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

Footnotes
1
See, Deutsche Telekom v. India, PCA Case No. 2014-10, Interim Award (December 13, 2017), para 238; CC/Devas (Mauritius) Ltd., Devas Employees Mauritius Private Limited and Telecom Devas Mauritius Limited v. India, PCA Case No. 2013-09, Award on Jurisdiction and Merits (July 25, 2016), para 245.
 
2
UNCTAD (2021), p. 1 ff.
 
3
On this topic, see UNCTAD (2023), p. 3. See also UNCTAD (2022), p. 2 ff.
 
4
The EU has so far (June 23, 2023) adopted eleven santions packages in response to Russia’s military attack against Ukraine, many of which concern investment. However, in the Guidance to the Member States Concerning Foreign Direct Investment from Russia and Belarus in View of the Military Aggression Against Ukraine and the Restrictive Measures Laid Down in Recent Council Regulations on sanctions, 2022/C 151 I/01, April 6, 2022, the Commission acknowledges that the screening of FDI and sanctions are two distinct legal instruments which have a different purpose.
 
5
See UNCTAD (2022), p. 58. On this aspect, see also para 5 below.
 
6
On the concept of national security interests, see Accaoui Lorfing (2021), pp. 179–199.
 
7
See Heath (2020), p. 1025.
 
8
Ibid., p. 1033.
 
9
See Donohue (2011), pp. 1576–1577, 1657–1658.
 
10
On this topic, see Kurtz (2010), pp. 330–333; Burke-White (2008), pp. 202–204.
 
11
See, El Paso Energy Int’l Corp. v. Argentine Republic, ICSID Case No. ARB/03/15, Award (October 31, 2011), paras 563–573; Cont’l Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Award (September 5, 2008), paras 84–89; Sempra Energy Int’l v. Argentine Republic, ICSID Case No. ARB/02/16, Award (September 28, 2007), para 367; Enron Corp. v. Argentine Republic, ICSID Case No. ARB/01/3, Award (May 22, 2007), paras 324–326; LG&E Energy Corp. v. Argentine Republic, ICSID Case No. ARB/02/1, Decision on Liability (October 3, 2006), paras 217–219; CMS Gas Transmission Co. v. Argentine Republic, ICSID Case No. ARB/01/8, Award (May 12, 2005), paras 344–352. On these cases, see Hoelck Thjoernelund (2009), pp. 425–478.
 
12
On this aspect, see Heath (2020), p. 1038. However, in El Paso Energy Int’l Corp. v. Argentine Republic, supra note 11, para 588, the tribunal affirmed that “essential security interests” can only refer to “external” threats. With regard to the approaches followed by arbitral tribunals pertaining the Argentina financial crisis see Burke-White, von Staden (2008), p. 393 ff.
 
13
OECD (2009), p. 11 ff.
 
14
See National Security Law of the People’s Republic of China (2015), adopted at the 15th session of the Standing Committee of the Twelfth National People’s Congress of the People’s Republic of China on July 1, 2015.
 
15
On this topic, see Ripple et al. (2020), p. 11. In May 2019, the UK was the first state to declare a climate emergency.
 
16
See Heath (2020), p. 1020 ff.; Heath (2019), p. 1431 ff.; Ma (2019), p. 899 ff.; Roberts et al. (2019), p. 655 ff.; Blackwill and Harris (2016).
 
17
See Desierto (2018).
 
18
See, for instance, United States—Origin Marking Requirement, Panel Report WT/DS597/R (December 21, 2022); United States—Measures on Certain Semiconductor and Other Products, and Related Services and Technologies,: Request for Consultations by China, WT/DS615/1, G/L/1471, S/L/438, G/TRIMS/D/46, IP/D/44 (December 15, 2022), para 7 ff.; Saudi Arabia—Measures Concerning the Protection of Intellectual Property Rights, Panel Report WT/DS567/R (June 16, 2020); Japan—Measures Related to the Exportation of Products and Technology to Korea, Request for Consultations by the Republic of Kore, WTO Doc.WT/DS590/1 (September 16, 2019), para 7; United States—Measures Relating to Trade in Goods and Services, Request for the Establishment of a Panel by the Bolivarian Republic of Venezuela, WTO Doc. WT/DS574/2 (March 15, 2019), p. 1; United States—Certain Measures on Steel and Aluminium Products, Request for the Establishment of a Panel by Switzerland, WTO Doc. WT/DS556/15 (November 8, 2018), p. 5; United Arab Emirates—Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of Intellectual Property Rights, Request for the Establishment of a Panel by Qatar, WTO Doc. WT/DS526/2 (October 6, 2017), paras 3.1–3.15; Russia—Measures Concerning Traffic in Transit of Ukrainian Products, Request for Consultations by Ukraine, WTO Doc.WT/DS512/1 (September 21, 2016), p. 2 and note 1. On this topic, see Vranes (2023); Boklan and Bahri (2020), pp. 123–136.
 
19
On this topic, see Sornarajah (2021), pp. 134–137.
 
20
They are Austria, Belgium (the Flanders region), China, Hungary, Italy, Latvia, Norway, Poland, the Republic of Korea, the Russian Federation, and South Africa.
 
21
UNCTAD (2019b), p. 94.
 
22
Ibid., pp. 89–90.
 
23
On this topic, see Dimitropoulos (2020); Bariatti (2019), p. 39 ff.; Fumagalli (2019), p. 45 ff.; UNCTAD (2019a).
 
24
UNCTAD (2019a), pp. 7–8.
 
25
This expression is sometimes employed also in IIAs, see for instance Article 4.5(b)(iv) of the EU-Singapore Investment Protection Agreement (signed on October 15, 2018), which considers as an essential security interest “[…]to protect critical infrastructure (this relates to communications, power or water infrastructure providing essential goods or services to the general public) from deliberate attempts to disable or disrupt it (emphasis added).”
 
26
See Article 2(a) of the Council Directive 2008/114/EC of December 8, 2008 on the Identification and Designation of European Critical Infrastructures and the Assessment of the Need to Improve Their Protection.
 
27
According to Subsection 721(d)(1) and (4)(A) of the Defense Production Act, the review is triggered by a “credible evidence that leads the President to believe that the foreign interest exercising control might take action that threatens to impair the national security (emphasis added).” See Defense Production Act of 1950, 50 U.S.C. App. 2170.
 
28
On October 11, 2020, the Law no. 682/2020 entered into force, which amends the Act on the Screening of Foreign Corporate Acquisitions of 2012 (172/2012), clarifying that “key national interest means securing military national defence, functions vital to society, national security and foreign and security policy objectives, and safeguarding public order and security in accordance with Articles 52 and 65 of the Treaty on the Functioning of the European Union, if there is a genuine and sufficiently serious threat to a fundamental interest of society (emphasis added).”
 
29
According to the Circular of the General Office of the State Council on the Establishment of Security Review System Regarding Merger and Acquisition of Domestic Enterprises by Foreign Investors (issued on February 3, 2011), the “content of [the] security review” will include not only “the effect of [the transaction] on the national security,” but also its “effect” on “national steady economic growth” and “basic social living order (emphasis added).” On this topic, see UNCTAD (2019a), p. 8.
 
30
UNCTAD (2019a), p. 8.
 
31
For example, according to the Australian legal order, foreign state-owned enterprises have to respect extended disclosure obligations; furthermore, these companies normally need a governmental approval for their investment. Additionally, in the Russian legal order an approval is required for transactions involving foreign state-owned enterprises in minority stakes of domestic companies, being established also the ban of such transactions in case of majority participation. On this topic, see UNCTAD (2019a), p. 11.
 
32
Furthermore, recent legislations have imposed new disclosure obligations to foreign investors during screening procedures and introduced civil, criminal, or administrative penalties for not complying with or eluding notification and screening obligations.
 
33
See Section 5021 of the Omnibus Trade and Competitiveness Act of 1988 amending Section 721 of the Defense Production Act of 1950. CFIUS operates pursuant to Section 721 of the Defense Production Act of 1950, as amended (Section 721), and as implemented by Executive Order 11858, as amended, and regulations at 31 C.F.R. Part 800, as amended, and 31 C.F.R. Part 801.
 
34
CFIUS was established by President Gerald Ford in 1975 and operates under the auspices of the United States Treasury and the White House. CFIUS includes the heads of the departments of the Treasury, Justice, Homeland Security, Commerce, Defense, State and Energy, as well as the Office of the US Trade Representative and the Office of Science and Technology Policy, with the Director of National Intelligence and the Secretary of Labor as non-voting members.
 
35
Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993, called the “Byrd amendment”, encoding Section 721 of the Defense Production Act.
 
36
Foreign Investment and National Security Act of 2007, Public Law 110–49—July 26, 2007.
 
37
The revised CFIUS text is part of the National Defense Authorization Act for Fiscal Year 2019, Sections 1701 et seq.
 
38
FIRRMA has extended the scope of CFIUS competences to include, for example, investments that have an impact on critical infrastructure and technology sectors (including activities related to the maintenance and collection of sensitive data relating to US citizens, whose dissemination or use could compromise national security), although control over the enterprise established in the United States by a foreign entity is lacking. Furthermore, the CFIUS control activity now also includes operations, transactions, contracts, or agreements that are believed to have been carried out for the purpose of circumventing the legislation on foreign investments. Finally, there is an obligation to notify for acquisitions by foreign subjects if there is a direct or indirect “substantial interest” of a foreign government and the transaction concerns critical infrastructures or technologies or sensitive data of US citizens. On the topic, see: Guaccero (2023) p. 73 ff.; Guaccero (2019), p. 141 ff.; Mann (2019), p. 15 ff.; Connell, Huang (2014), p. 131 ff.; Georgiev (2008), p. 125 ff.
 
39
See Defence Production Act of 1950 Section 721, as amended by FIRMA of 2018 50 USC Section 4565(a)(1).
 
40
However, on September 15, 2022, President Biden issued Executive Order 14083 “Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States”, which provides formal guidance to the CFIUS on factors this body has to take into consideration when conducting national security reviews. The factors are the following: (i) the transaction’s effect on the resilience of critical U.S. supply chains; (ii) the transaction’s effect on U.S. technological leadership in specified industries; (iii) investment trends that may have consequences for a given transaction’s impact on national security; (iv) cybersecurity risks; (v) risks to U.S. persons’ sensitive data. This is the first executive order issued since CFIUS was established in 1975.
 
41
According to Article 346(2) TFEU, any member state may take measures that it considers necessary for the protection of the essential interests of its security. While within the framework of the provisions concerning the movement of capital, Article 65(1)(b) TFEU recognizes the right of member states to take measures which are justified on grounds of public policy or public security.
 
42
On this topic, see Georgaki K (2023); Hindelang and Moberg (2021).
 
43
Regulation (EU) 2019/452 of the European Parliament and of the Council of March 19, 2019 Establishing a Framework for the Screening of Foreign Direct Investments into the Union. On this topic, see Scarchillo (2023), p. 93 ff.; Warchol (2021), p. 53 ff.; Bourgeois (2020); Napolitano (2019), p. 1 ff.; Schill (2019), p. 105 ff.
 
44
See Article 4(1)(d) of Regulation (EU) 2019/452.
 
45
This system checks foreign investment in domestic enterprises in the defence sector and other sectors linked to national security. This was first established under the Circular of the General Office of the State Council on the Establishment of Security Review System Regarding Merger and Acquisition of Domestic Enterprises by Foreign Investors of February 3, 2011.
 
46
On this topic, see Li and Bian (2016), p. 174.
 
47
See National Security Law of the People’s Republic of China (2015), supra note 14.
 
48
On January 1, 2020, the Foreign Investment Law became effective. Finally, on December 19, 2020, NDRC and MOFCOM jointly adopted the Measures for the Security Review of Foreign Investments, which have expanded the scope of national security review, always leaving a great discretion in the hands of Chinese authorities, for example still defining targeted sectors in broad strokes. On this topic, see Toti (2023), p. 119 ff.
 
49
Act No. 228 of December 1, 1949.
 
50
Amendment to the FEFTA was promulgated on November 29, 2019.
 
51
See amendment of Act No. 38 of 2017.
 
52
According to UNCTAD, in 2020 and in the first quarter of 2021, 25 countries (mainly industrialised states) and the EU adopted or boosted screening regimes for foreign investment. Until 2020, countries conducting FDI screening for national security were 34, which accounted for 50% of world FDI flows and 69% of the world stock of FDI. The majority of recent amendments were introduced due to the pandemic. See UNCTAD (2021), p. 111.
 
53
OECD (2020), p. 4 ff.
 
54
C(2020) 1981 final, Guidance to the Member States Concerning Foreign Direct Investment and Free Movement of Capital from Third Countries, and the Protection of Europe’s Strategic Assets, Ahead of the Application of Regulation (EU) 2019/452 (FDI Screening Regulation) of March 25, 2020. According to the Commission: “today more than ever, the EU’s openness to foreign investment needs to be balanced by appropriate screening tools. In the context of the COVID-19 emergency, there could be an increased risk of attempts to acquire healthcare capacities (for example for the productions of medical or protective equipment) or related industries such as research establishments (for instance developing vaccines) via foreign direct investment. Vigilance is required to ensure that any such FDI does not have a harmful impact on the EU’s capacity to cover the health needs of its citizens.”
 
55
See List of screening mechanisms notified by Member States, updated to June 28, 2023, available at: https://​policy.​trade.​ec.​europa.​eu/​enforcement-and-protection/​investment-screening_​en. Accessed on July 5, 2023.
 
56
On this topic, see Papadopoulos (2021), pp. 54–75; Sabatino (2021), pp. 189–195. Furthermore, in 2020, many other restrictions concerning foreign investments were adopted regardless of COVID-19. See, UNCTAD (2021), p. 116.
 
57
OECD, UNCTAD (2022a), p. 4.
 
58
OECD (2022), pp. 13–15.
 
59
OECD-UNCTAD (2022b), pp. 5–6.
 
60
Guidance to the Member States Concerning Foreign Direct Investment from Russia and Belarus in View of the Military Aggression Against Ukraine and the Restrictive Measures Laid Down in Recent Council Regulations on Sanctions, supra note 4.
 
61
Even though the Communication was adopted as an immediate response to the Russian aggression against Ukraine, it also includes general principles regarding FDI screening in the EU. The Commission invites member states to assess and prevent threats linked to Russian and Belarusian investments, asking member states to guarantee a close cooperation both on the national and EU level as far as FDI screening activities, as well as for the enforcement of EU sanctions.
 
62
On this topic, see Rojas Elgueta and Mauro (2020).
 
63
See Article 3 (National Treatment) of Rwanda-United States of America BIT (signed on February 19, 2008): “1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. 2. Each Party shall accord to covered investments treatment no less favorable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.” On this topic, see de Mestral de (2015), pp. 685–699.
 
64
See Article 12 (Exclusions) Mexico-Netherlands BIT (signed on May 13, 1998): “The dispute settlement provisions of this Schedule shall not apply to the resolutions adopted by a Contracting Party for national security reasons (emphasis added).”
 
65
See Annex III (Exclusions from Dispute Settlement) Canada-Moldova, Republic of BIT (signed on June 12, 2018): “A decision by Canada following a review under the Investment Canada Act, with respect to whether or not to permit an investment that is subject to review, is not subject to the dispute settlement provisions under Sections C (Settlement of Disputes between an Investor and the Host Party) or D (State-to-State Dispute Settlement Procedures) of this Agreement.”
 
66
See, for instance, Global Telecom Holding S.A.E. v. Canada, ICSID Case No. ARB/16/16, Award (March 27, 2020). On this topic, see Voon and Merriman (2022).
 
67
See Decree Law No. 332 of May 31, 1994, converted with modifications by Law No. 474 of July 30, 1994. On this topic, see San Mauro (2004).
 
68
See, Commission v. Italy, Case C-326/07 (March 26, 2009), ECJ I-02291, paras 50–55; Commission v. Italian Republic, Case C-58/99 (May 23, 2000), ECJ I-03811, para 20. In the first-mentioned case, the Court of Justice affirmed that the special powers held by the Italian State in Telecom Italia, Eni, Enel, and Finmeccanica infringed EU rules, accepting the conclusions of the European Commission. On this topic, see Papadopoulos (2022), pp. 223–270; De Luca (2015), p. 190 ff.; Gallo (2013), p. 923 ff.
 
69
Decree Law No. 21 of March 15, 2012, converted with modifications by Law No. 56 of May 11, 2012. On this topic, see Comino (2014), p. 1019 ff.; San Mauro (2012).
 
70
See, respectively, Article 1 and Article 2 of Decree Law No. 21.
 
71
On this aspect, see Scarchillo (2020), pp. 575–578.
 
72
For example, resolutions concerning the following items: merger; demerger; transfer of going concern or of subsidiaries; transfer abroad of the registered office; change of the corporate purpose; winding-up; amendment of certain bylaws provisions; transfer of the ownership or of the right to use tangible or intangible assets or providing for encumbrances limiting their use.
 
73
The following criteria are indicated in order to verify the presence of the threat: the suitability of the economic, financial, technical and organizational capabilities of the purchaser, as well as the relevant industrial plan; the existence of objective reasons leading to the conclusion that the purchaser is linked to third countries which are not complying with democratic principles or international law, or which behave in a manner that threatens the international community, or which have relationships with criminal or terrorist organizations; and—for veto on extraordinary corporate resolutions only—the strategic value of the assets or companies to be transferred, and whether the transaction adequately ensures the integrity of the defence and national security system, the safety of military defence information, the international interests of the country, the protection of the national territory, of the critical and strategic infrastructures and of the borders.
 
74
The government has to consider the following criteria: the existence of objective reasons leading to deem the purchaser linked to third countries not complying with democratic principles or international law or behaving in a manner that threatens the international community or having relationships with criminal or terrorist organizations; and the suitability of the economic, financial, technical and organizational capabilities of the purchaser to ensure safety and continuity of supplies and the maintenance, safety and operations of grids and plants.
 
75
The purchaser or the strategic company must notify the Presidency of the Council of Ministers of the acquisition or the corporate resolution, giving all the essential information needed to assess the existence of serious prejudice. The government has 15 business days from the notification to exercise its special powers. Otherwise, the acquisition/resolution is implicitly authorized with no conditions.
 
76
Decree Law No. 148 of October 16, 2017, converted with modifications by Law No. 172 of December 4, 2017.
 
77
See Article 14(1)(b)(2) of Decree Law No. 148.
 
78
See Article 14(5).
 
79
See Article 1 of Decree Law No. 22 of March 25, 2019, converted with modifications by Law No. 41 of May 20, 2019. On this topic, see Clarich (2019), pp. 119–120.
 
80
See Article 4(2) of Decree Law No. 105 of September 21, 2019, converted with modifications by Law No. 133 of November 18, 2019. Furthermore, Article 4-bis of this Decree Law has extended the screening timetable: while the term was previously 15 business days, now the government is allowed to take up to 45 business days for screening operations concerning the original strategic sectors and up to 30 business days for those regarding 5G technology.
 
81
According to Regulation (EU) 2019/452, supra note 43, Article 4(1): “[…] In determining whether a foreign direct investment is likely to affect security or public order, member states and the Commission may consider its potential effects on, inter alia: (a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure; (b) critical technologies and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009 […] including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies.”
 
82
See, in particular, Articles 15 and 16 of Decree Law No. 23 of April 8, 2020, converted with modifications by Law No. 40 of June 5, 2020.
 
83
On this topic, see Donativi (2020); Scognamiglio (2020), pp. 159–178.
 
84
Decree of the President of the Council of Ministers No. 179 of December 18, 2020.
 
85
Decree of the President of the Council of Ministers No. 180 of December 23, 2020.
 
86
Law No. 176 of December 18, 2020, converting Decree Law No. 137 of October 28, 2020.
 
87
Decree Law No. 228 of December 30, 2021, converted with modifications by Law No. 15 of February 25, 2022.
 
88
Decree Law No. 82 of June 14, 2021, converted with modifications by Law No. 109 of August 4, 2021.
 
89
Decree Law No. 21 of March 21, 2022, converted with modifications by Law No. 51 of May 20, 2022. This Decree Law has also introduced provisions concerning exports, establishing the duty of notification of the direct or indirect export of critical raw materials (including ferrous scraps), for Italian companies or companies established in Italy, at least 10 days before completing the transaction at issue, to the Ministry of Economic Development and the Ministry of Foreign Affairs (until July 31, 2022). On this topic see, Santamaria (2023); Chieppa (2022); Liberatore et al. (2022). See also Decree Law No. 187 of December 5, 2022, converted with modifications by Law N0. 10 of February 1, 2023, which has introduced some industrial policy measures to support companies subject to the exercise of special powers.
 
90
For the defence and national security sectors, a duty of notification requirement has been introduced also for internal resolutions, acts or restructurings and refinancing by strategic companies which imply a change of ownership, control, or availability of assets.
 
91
On August 1, 2022, the President of the Council of Ministers adopted Decree No. 133 to accelerate the FDI screening procedure and to introduce a pre-filing procedure for FDI transactions in strategic sectors. A preliminary assessment of transactions by the government in a shorter term is now contemplated. Within 30 days the authority should notify the applicant whether a transaction is subject to screening and should be notified through the ordinary FDI procedure or not.
 
92
A joint notification regime for both the acquiring and the target companies in case of the purchase of equity interests in strategic companies is now foreseen, while in the past the duty of notification existed only for the buyer.
 
93
Furthermore, on July 15, 2022, the Parliament adopted Law No. 91 converting with modifications Decree Law No. 50 of May 17, 2022 which extended the application of the special power pertaining strategic assets in the energy, transport and communication sectors important for national security to concessions for “cultivation of geothermal resources.”
 
94
See, Bian (2021), p. 570.
 
95
Also in EU Regulation 2019/452, supra note 43, the term “security” is deliberately vague, leaving significant uncertainty as to the scope of Commission and member state review. However, this Regulation does not make a reference to the complex concept of “EU security”, while it refersto projects or programmes of “Union interest on grounds of security or public order” (see Article 8).
 
96
Bian (2020), p. 231.
 
97
Esplugues (2018), pp. 449–450.
 
98
On this topic, see Henckels (2018), pp. 2843–2844; Vandevelde (2013), pp. 458–459.
 
Literature
go back to reference Accaoui Lorfing P (2021) Screening of foreign direct investment and the states’ security interests in light of the OECD, UNCTAD and other international guidelines. In: Titi C (ed) Public actors in international investment law. European yearbook of international economic law. Springer, Cham, pp 179–199. https://doi.org/10.1007/978-3-030-58916-5_10CrossRef Accaoui Lorfing P (2021) Screening of foreign direct investment and the states’ security interests in light of the OECD, UNCTAD and other international guidelines. In: Titi C (ed) Public actors in international investment law. European yearbook of international economic law. Springer, Cham, pp 179–199. https://​doi.​org/​10.​1007/​978-3-030-58916-5_​10CrossRef
go back to reference Bariatti S (2019) Current trends in foreign direct investment: open issues on National Screening Systems. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 39–43 Bariatti S (2019) Current trends in foreign direct investment: open issues on National Screening Systems. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 39–43
go back to reference Bian C (2020) National security review of foreign investment: a comparative legal analysis of China, the United States and the European Union. Routledge, LondonCrossRef Bian C (2020) National security review of foreign investment: a comparative legal analysis of China, the United States and the European Union. Routledge, LondonCrossRef
go back to reference Bian C (2021) Foreign direct investment screening and National Security: reducing regulatory hurdles to investors through induced reciprocity. J World Invest Trade 22(4):561–595CrossRef Bian C (2021) Foreign direct investment screening and National Security: reducing regulatory hurdles to investors through induced reciprocity. J World Invest Trade 22(4):561–595CrossRef
go back to reference Blackwill RD, Harris JM (2016) War by other means: geoeconomics and statecraft. Harvard University Press, CambridgeCrossRef Blackwill RD, Harris JM (2016) War by other means: geoeconomics and statecraft. Harvard University Press, CambridgeCrossRef
go back to reference Boklan D, Bahri A (2020) The first WTO’s ruling on National Security Exception: balancing interests or opening Pandora’s box? World Trade Rev 19(1):123–136CrossRef Boklan D, Bahri A (2020) The first WTO’s ruling on National Security Exception: balancing interests or opening Pandora’s box? World Trade Rev 19(1):123–136CrossRef
go back to reference Bourgeois JHJ (ed) (2020) EU framework for foreign direct investment control. Wolters Kluwer, Alphen aan den Rijn Bourgeois JHJ (ed) (2020) EU framework for foreign direct investment control. Wolters Kluwer, Alphen aan den Rijn
go back to reference Burke-White WW (2008) The argentine financial crisis: state liability under BITs and the legitimacy of the ICSID system. Asian J WTO Int Health Law Policy 3(1):199–234 Burke-White WW (2008) The argentine financial crisis: state liability under BITs and the legitimacy of the ICSID system. Asian J WTO Int Health Law Policy 3(1):199–234
go back to reference Burke-White WW, von Staden A (2008) Investment protection in extraordinary times: the interpretation and application of non-precluded measures provisions in bilateral investment treaties. Virginia J Int Law 48(2):307–410 Burke-White WW, von Staden A (2008) Investment protection in extraordinary times: the interpretation and application of non-precluded measures provisions in bilateral investment treaties. Virginia J Int Law 48(2):307–410
go back to reference Clarich M (2019) La disciplina del golden power in Italia e l’estensione dei poteri speciali alle reti 5G. In: Napolitano G (ed) Foreign direct investments screening. Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 116–120 Clarich M (2019) La disciplina del golden power in Italia e l’estensione dei poteri speciali alle reti 5G. In: Napolitano G (ed) Foreign direct investments screening. Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 116–120
go back to reference Comino A (2014) Golden power per dimenticare la golden share: le nuove forme di intervento pubblico sugli assetti societari nei settori della difesa, della sicurezza nazionale, dell’energia, dei trasporti e delle comunicazioni. Rivista italiana di diritto pubblico comunitario 24(5):1019–1053 Comino A (2014) Golden power per dimenticare la golden share: le nuove forme di intervento pubblico sugli assetti societari nei settori della difesa, della sicurezza nazionale, dell’energia, dei trasporti e delle comunicazioni. Rivista italiana di diritto pubblico comunitario 24(5):1019–1053
go back to reference Connell P, Huang H (2014) An empirical analysis of CFIUS: examining foreign investment regulation in the United States. Yale J Int Law 39:131–163 Connell P, Huang H (2014) An empirical analysis of CFIUS: examining foreign investment regulation in the United States. Yale J Int Law 39:131–163
go back to reference De Luca A (2015) The EU and member states: FDI, portfolio investments, Golden powers and SWFs. In: Bassan F (ed) Research handbook on sovereign wealth funds and international investment law. Edward Elgar Publishing, Cheltenham, pp 178–205 De Luca A (2015) The EU and member states: FDI, portfolio investments, Golden powers and SWFs. In: Bassan F (ed) Research handbook on sovereign wealth funds and international investment law. Edward Elgar Publishing, Cheltenham, pp 178–205
go back to reference Dimitropoulos G (2020) National security: the role of investment screening mechanisms. In: Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy, vol I. Springer, Cham. https://link.springer.com/content/pdf/10.1007%2F978-981-13-5744-2_59-1.pdf Dimitropoulos G (2020) National security: the role of investment screening mechanisms. In: Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy, vol I. Springer, Cham. https://​link.​springer.​com/​content/​pdf/​10.​1007%2F978-981-13-5744-2_59-1.pdf
go back to reference Donohue LK (2011) The limits of national security. Am Crim Law Rev 48:1573–1756 Donohue LK (2011) The limits of national security. Am Crim Law Rev 48:1573–1756
go back to reference Esplugues CA (2018) Foreign investment, strategic assets and national security. Intersentia, CambridgeCrossRef Esplugues CA (2018) Foreign investment, strategic assets and national security. Intersentia, CambridgeCrossRef
go back to reference Fumagalli L (2019) The global rush towards national screening systems on foreign direct investment: a movement facing no limits? Remarks from the point of view of public international law. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 45–53 Fumagalli L (2019) The global rush towards national screening systems on foreign direct investment: a movement facing no limits? Remarks from the point of view of public international law. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 45–53
go back to reference Gallo D (2013) Corte di giustizia UE, Golden Shares e investimenti sovrani. Diritto del commercio internazionale 27(4):917–949 Gallo D (2013) Corte di giustizia UE, Golden Shares e investimenti sovrani. Diritto del commercio internazionale 27(4):917–949
go back to reference Georgaki K (2023) The screening of cross-border investments by state-owned enterprises under EU law. In: Delimatsis P, Dimitropoulos G, Gourgourinis A (eds) State capitalism and international investment law. Hart, Oxford, New York, pp 123–142 Georgaki K (2023) The screening of cross-border investments by state-owned enterprises under EU law. In: Delimatsis P, Dimitropoulos G, Gourgourinis A (eds) State capitalism and international investment law. Hart, Oxford, New York, pp 123–142
go back to reference Georgiev GS (2008) The reformed CFIUS regulatory framework: mediating between continued Opennes to foreign investment and National Security. Yale J Regul 25:125–134 Georgiev GS (2008) The reformed CFIUS regulatory framework: mediating between continued Opennes to foreign investment and National Security. Yale J Regul 25:125–134
go back to reference Guaccero A (2019) Compliance e tutela degli investimenti esteri diretti. Spunti di comparazione tra Stati Uniti ed Europa. In: Napolitano G (ed) Foreign direct investment screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 141–151 Guaccero A (2019) Compliance e tutela degli investimenti esteri diretti. Spunti di comparazione tra Stati Uniti ed Europa. In: Napolitano G (ed) Foreign direct investment screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 141–151
go back to reference Guaccero A (2023) The US regulation of foreign direct investments. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 73–92CrossRef Guaccero A (2023) The US regulation of foreign direct investments. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 73–92CrossRef
go back to reference Heath JB (2019) National security and economic globalization: toward collision or reconciliation. Fordham Int Law J 42(5):1431–1449 Heath JB (2019) National security and economic globalization: toward collision or reconciliation. Fordham Int Law J 42(5):1431–1449
go back to reference Heath JB (2020) The new national security challenge to the economic order. Yale Law J 129(4):1020–1098 Heath JB (2020) The new national security challenge to the economic order. Yale Law J 129(4):1020–1098
go back to reference Henckels C (2018) Should investment treaties contain public policy exceptions? Boston Coll Law Rev 59(8):2825–2844. https://lawdigitalcommons.bc.edu/bclr/vol59/iss8/11 Henckels C (2018) Should investment treaties contain public policy exceptions? Boston Coll Law Rev 59(8):2825–2844. https://​lawdigitalcommon​s.​bc.​edu/​bclr/​vol59/​iss8/​11
go back to reference Mann C (2019) The global rush toward foreign direct investment screening: lessons from the United States. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 15–21 Mann C (2019) The global rush toward foreign direct investment screening: lessons from the United States. In: Napolitano G (ed) Foreign Direct Investment Screening – Il controllo sugli investimenti esteri diretti. Il Mulino, Bologna, pp 15–21
go back to reference Mestral de A (2015) Pre-entry obligations under investment law. In: Bungenberg M, Griebel J, Hobe S, Reinisch A, Kim Y (eds) International investment law – a handbook. C.H. Beck, Hart, Nomos, München, Oxford, Baden-Baden, pp 685–699CrossRef Mestral de A (2015) Pre-entry obligations under investment law. In: Bungenberg M, Griebel J, Hobe S, Reinisch A, Kim Y (eds) International investment law – a handbook. C.H. Beck, Hart, Nomos, München, Oxford, Baden-Baden, pp 685–699CrossRef
go back to reference Napolitano G (2019) Il regolamento sul controllo degli investimenti esteri diretti: alla ricerca di una sovranità europea nell’arena economica globale. Rivista della regolazione dei mercati 1:2–20 Napolitano G (2019) Il regolamento sul controllo degli investimenti esteri diretti: alla ricerca di una sovranità europea nell’arena economica globale. Rivista della regolazione dei mercati 1:2–20
go back to reference Papadopoulos T (2022) Privatizations of state-owned companies and justifications for restrictions on EU fundamental freedoms: past, present and future perspectives. In: Chaisse J, Górski J, Sejko D. (eds), Regulation of state-controlled enterprises: an interdisciplinary and comparative examination. Springer, Singapore, pp. 223–270. https://doi.org/https://doi.org/10.1007/978-981-19-1368-6_10 Papadopoulos T (2022) Privatizations of state-owned companies and justifications for restrictions on EU fundamental freedoms: past, present and future perspectives. In: Chaisse J, Górski J, Sejko D. (eds), Regulation of state-controlled enterprises: an interdisciplinary and comparative examination. Springer, Singapore, pp. 223–270. https://​doi.​org/​https://​doi.​org/​10.​1007/​978-981-19-1368-6_​10
go back to reference San Mauro C (2004) Golden shares, poteri speciali e tutela di interessi nazionali essenziali. Luiss University Press, Roma San Mauro C (2004) Golden shares, poteri speciali e tutela di interessi nazionali essenziali. Luiss University Press, Roma
go back to reference Scarchillo G (2020) Golden Powers e settori strategici nella prospettiva europea: il caso Huawei. Un primo commento al regolamento UE 2019/452 sul controllo degli investimenti esteri diretti. Diritto del commercio internazionale 34(2):569–601 Scarchillo G (2020) Golden Powers e settori strategici nella prospettiva europea: il caso Huawei. Un primo commento al regolamento UE 2019/452 sul controllo degli investimenti esteri diretti. Diritto del commercio internazionale 34(2):569–601
go back to reference Scarchillo G (2023) Golden powers in strategic sectors: a European perspective. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 93–118CrossRef Scarchillo G (2023) Golden powers in strategic sectors: a European perspective. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 93–118CrossRef
go back to reference Schill SW (2019) The European Union’s foreign direct investment screening paradox: tightening inward investment control to further external investment liberalization. Legal Iss Econ Integr 46(2):105–128CrossRef Schill SW (2019) The European Union’s foreign direct investment screening paradox: tightening inward investment control to further external investment liberalization. Legal Iss Econ Integr 46(2):105–128CrossRef
go back to reference Scognamiglio A (2020) Lo Stato stratega (o lo Stato doganiere) affila le armi: le disposizioni emergenziali in materia di controllo sugli investimenti esteri. In: Palmieri G (ed) Oltre la pandemia. Società, salute, economia e regole nell’era post Covid-19, vol I. Editoriale scientifica, Napoli, pp 159–178 Scognamiglio A (2020) Lo Stato stratega (o lo Stato doganiere) affila le armi: le disposizioni emergenziali in materia di controllo sugli investimenti esteri. In: Palmieri G (ed) Oltre la pandemia. Società, salute, economia e regole nell’era post Covid-19, vol I. Editoriale scientifica, Napoli, pp 159–178
go back to reference Sornarajah M (2021) The international law of foreign investment, 5th edn. Cambridge University Press, CambridgeCrossRef Sornarajah M (2021) The international law of foreign investment, 5th edn. Cambridge University Press, CambridgeCrossRef
go back to reference Toti E (2023) The PRC regulation of foreign direct investments. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 119–137CrossRef Toti E (2023) The PRC regulation of foreign direct investments. In: Mauro MR, Pernazza F (eds) State and Enterprise. Legal issues in the global market. Springer, Cham, pp 119–137CrossRef
go back to reference Vandevelde KJ (2013) Rebalancing through exceptions. Lewis Clark Law Rev 17(2):449–459 Vandevelde KJ (2013) Rebalancing through exceptions. Lewis Clark Law Rev 17(2):449–459
go back to reference Vranes E (2023) WTO Security Exceptions in practice and scholarship. Curtailing “Trump Cards” through proportionality. Springer, ChamCrossRef Vranes E (2023) WTO Security Exceptions in practice and scholarship. Curtailing “Trump Cards” through proportionality. Springer, ChamCrossRef
go back to reference Warchol J (2021) The birth of the EU screening regulation. In: Hinderlang S, Moberg A (eds) YSEC yearbook of socio-economic constitutions 2020. A common European law on investment screening (CELIS). Springer, Cham, pp 53–75 Warchol J (2021) The birth of the EU screening regulation. In: Hinderlang S, Moberg A (eds) YSEC yearbook of socio-economic constitutions 2020. A common European law on investment screening (CELIS). Springer, Cham, pp 53–75
Metadata
Title
The Evolving Concept of National Security and Foreign Investment Screening Procedures with Particular Reference to the Italian Regime
Author
Maria Rosaria Mauro
Copyright Year
2024
DOI
https://doi.org/10.1007/17280_2023_8

Premium Partner