New body: Interfederal Screening of Investments

On 1 July 2023, the foreign investment screening mechanism will come into force. The main task of the Interfederal Screening Committee (ISC) is to analyse foreign direct investments from third countries outside the EU (whether or not through an EU company), which acquire a certain percentage of voting rights in a Belgian company, and to assess whether they pose any potential risks to Belgium’s national security and strategic interests. It allows to identify potential threats and take preventive measures to protect sensitive national sectors.

Scope

• Foreign direct investment by non-EU individuals and companies
• Only for M&A investments; NO green fields
• Only in certain sectors: vital structures, essential technologies and raw materials, critical inputs, sensitive information and personal data, private security, media, biotechnology, defence, energy, cyber security, electronic communications and digital infrastructure
• Threshold: only investments leading to control of the company or to the acquisition, depending on the sector, of 10% or 25% of the voting rights in the Belgian entity

Procedure

If one of the members of the ISC considers that the foreign direct investment may have consequences for public order, national security or otherwise strategic interests, proceedings will be initiated.

An screening starts (assessment & screening), which normally should not take longer than two to three months, the members of the committee concerned submit their advice to their competent minister. The final decision can be

• positive
• positive, but with corrective measures
• negative (in highly exceptional cases)

The implementation of the investments should be suspended pending the final decision.

Role of flanders and FIT

The ISC is a body that unites all federated states in Belgium alongside the federal state. Each entity acts and makes decisions within the scope of its competences, ensuring a global and coherent position on foreign investment. 

ISC consists of 12 members, one representative of the Flemish Region and two representatives of the Flemish Community. However, the members of the Flemish Government are competent for both the Community and the Region.

• For the Minister-President, this is a representative of the Department of Chancery and Foreign Affairs (DKBUZA) as a coordinating entity given the purpose of the screening mechanism and the competence of DKBUZA to support general government policy: […] 8° the safeguarding of the strategic interests […] and for foreign policy and European affairs.
• For the Minister of Economy, this is a representative of the Department of Economics, Science and Innovation (DEWI).
• Given FIT's authority to attract foreign investments and its central role as investment coordinator, a representative of FIT will take up the third seat or be invited as an external expert in cases in which Flanders is competent.

History

On November 30, 2022, a cooperation agreement establishing the Interfederal Screening Commission (ISC) was approved.

This mechanism is the result of a European demand to strengthen foreign investment control mechanisms, aligned with European Regulation 2019/452, which establishes a framework for the screening of foreign direct investments into the EU. 18 EU Member States already have a screening mechanism.

Secretariat

The FPS Economy acts as the ISC Secretariat. More information is available at Interfederale Screeningscommissie | FOD Economie (fgov.be) (Dutch and French only). This website also contains guidelines that are useful for assessing whether investment plans must be registered.