Does the 9th Ordinance Amending the AWV Benefit Transaction Practice?

Despite significant criticism from business associations and abroad, the 9th Ordinance Amending the Foreign Trade and Payments Ordinance (AWV) came into force on July 18, 2017, which the Federal Ministry for Economic Affairs and Energy (BMWi) wants to bring about fair competition and better protection of critical infrastructures in the case of company takeovers by non-EU investors. In addition to expanding the BMWi's substantive audit competencies by including additional security-relevant areas in the audit process, the procedural requirements for auditing a transaction were revised in particular. As a result, the application for a clearance certificate will play a much more important role in future transaction practice than has been the case to date.

Already in the 12 months prior to the enactment of the regulation, a change in the handling of applications for clearance certificates by the Federal Ministry for Economic Affairs and Energy (BMWi) had become noticeable. In deviation from previous administrative practice, transactions notified for clearance were no longer approved by the mere expiration of the one-month period pursuant to Section 58 AWV (old version) or the issuance of the clearance certificate within this period, but were increasingly transferred by the BMWi to a formal review procedure by requesting additional documents in order to extend the review period and to be able to subject the transactions to a more detailed review.

The background to the change in administrative practice is likely to be not least the public debate that has been going on since the KUKA takeover by the Chinese MIDEA Group or the ultimately failed takeover of AIXTRON by Grand Chip Investment about the feared sell-off of key European technologies and know-how.