EU Commission Guidance on Foreign Direct Investments from Russia and Belarus

In April 2022, the European Commission published a special FDI guidance for EU Member States that concerns foreign direct investments from Russia and Belarus (the “Guidance”).

The European Commission believes there is a significantly heightened risk that FDIs by Russian and Belarusian investors may pose a threat to security and public order, which is why such FDIs should be systematically checked and scrutinised very closely by the competent authorities of the Member States. Particular attention must be given to the threats posed by investments by persons or entities associated with, controlled by or subject to influence by the two respective governments.

Against this background, the European Commission inter alia advised the Member States to:

• systematically use their FDI screening mechanisms to assess and prevent the threats related to Russian and Belarusian investments on grounds of security and public order;
• ensure close cooperation between national authorities competent for sanctions and those competent for the screening of FDIs;
• ensure full compliance with the requirements of the Anti-Money Laundering Directive to prevent the misuse of the EU financial system; and
• ensure close cooperation between all relevant institutions and the Member States in order to identify investments that could affect security or public order in the EU and to facilitate full compliance with the imposed sanctions.

The attached Annex provides an interesting overview of Russian and Belarusian assets in the EU, broken down by the type of controlling entity and by the type of target, as well as by sector, in which the companies with Russian influence or control are active.

The complete text of the Guidance and its Annex is available here