the guidelines clarify: (i) the mechanics of indirect threshold crossings (a foreign investor acquiring control of an entity that holds 10% or 25% of a French company’s voting rights is treated as having itself crossed those thresholds); (ii) that a 10% authorization does not extend to a subsequent crossing of the 25% threshold, which requires a separate filing; (iii) the conditions under which continuation fund transactions may qualify for the intragroup exemption, assessed on a case-by-case basis having regard to fund structure and management arrangements; and (iv) that fund managers are not required to disclose the identity of fund subscribers in the initial filing, though such information may be requested in the course of the review. While the CIEF is supposed to be bound by its guidelines, the latter leave room for discretion on a case-by-case approach to key considerations, such as the definition of “strategic sectors” and control, especially in the case of joint control. In addition, the CIEF may deviate from its guidelines for greater considerations of public interest. In 2024, the CIEF received 392 applications. About half were deemed out of scope or withdrawn, consistent with past trends of precautionary filings. 182 authorizations were granted, of which 99 (i.e., 54%) were granted with mitigation measures and conditions. Among the authorizations granted, 52% involved essential infrastructure, goods or services, 26% concerned sensitive activities and 21% concerned both. The July 2025 annual report disclosed for the first time that six investments were prohibited over the 2022–2024 period. These include notably the acquisition by U.S. group Flowserve of Velan and Segault, which manufacture valves used in French nuclear submarines and reactors. The number and reasons for individual refusals and withdrawals otherwise remain undisclosed. The types of commitments to which investors may be required to agree include, among others, maintaining certain assets in France for a given time frame, commitments to supply strategic national clients, protection of national secrets and governance measures designed to protect public security, such as the prohibition of representatives
a prior authorization to cross the 10% threshold does not automatically cover a later crossing of the 25% threshold, for which a separate authorization request must be submitted. The guidelines also address indirect crossings: where a foreign investor acquires control of an entity that itself holds, directly or indirectly, more than 10% or 25% of the voting rights in a French company, the foreign investor is deemed to have indirectly crossed the relevant threshold and must seek authorization accordingly. Procedure There is an initial review period of maximum 30 business days following the submission of a complete notification. However, the CIEF may stop the clock each time an additional question is posed. In addition, the CIEF may open a second phase for an additional maximum 45 business days if the CIEF considers that the foreign investor should undertake certain commitments to ensure the protection of national interests. Informal exchanges with the CIEF prior to a formal notification may be useful to clarify the purpose of the investment and the activities of the target, thereby enabling a more expeditious assessment of their application. Investments in listed companies are subject to a customized accelerated review process. A contemplated investment in a listed company may be cleared within 10 days on the basis of a simplified procedure unless the CIEF requests the standard procedure to be followed to alleviate potential concerns. Alternatively, investors and French companies may seek, within two months, the binding opinion of the CIEF on the eligibility of the latter to the French FDI screening mechanism. Such an opinion does not preclude the filing of an authorization application where the operation falls within the scope of the French FDI regime. The July 2025 guidelines include a number of changes and clarifications, including reflecting the permanent adoption of the 10% voting rights threshold for listed companies and the expansion of covered sectors. On substance,
36
FDI and National Security Review
Powered by FlippingBook