As the largest economy in Europe, Germany is an attractive destination for foreign investment due to its innovative and technological strength. While most investments are highly welcome and important for a prospering economy, some of the investments could possibly pose a threat to the national security. Therefore, the German legislation provides various tools to safeguard those national security interests from foreign interference. Foreign direct investment (FDI) control, one of the tools, continues to gain importance in light of an increasingly interconnected and globalized world. However, Germany as well as other countries are faced with the critical task of balancing the benefits of foreign investments with the imperative of protecting their sovereignty. While a ban on threatening investments would be the most effective measure to avoid possible threats, it could represent a disproportionate interference in the freedom of capital and investment. As a result, remedies play a critical role in the context of FDI screening procedures, particularly when it comes to addressing national security concerns. Remedies, in this context, refer to the legal mechanisms used to mitigate potential risks associated with foreign investments, while allowing the investment that raised the security concerns in the first place. The different types of remedies as well as their scope of application form the main subject matter of this article. The article further analyses their role in FDI screening procedures and their relevance in safeguarding national security concerns.

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The Role of Remedies to Mitigate National Security Concerns in Germany

  • Roland M. Stein,
  • Vanessa Kassem

摘要

As the largest economy in Europe, Germany is an attractive destination for foreign investment due to its innovative and technological strength. While most investments are highly welcome and important for a prospering economy, some of the investments could possibly pose a threat to the national security. Therefore, the German legislation provides various tools to safeguard those national security interests from foreign interference. Foreign direct investment (FDI) control, one of the tools, continues to gain importance in light of an increasingly interconnected and globalized world. However, Germany as well as other countries are faced with the critical task of balancing the benefits of foreign investments with the imperative of protecting their sovereignty. While a ban on threatening investments would be the most effective measure to avoid possible threats, it could represent a disproportionate interference in the freedom of capital and investment. As a result, remedies play a critical role in the context of FDI screening procedures, particularly when it comes to addressing national security concerns. Remedies, in this context, refer to the legal mechanisms used to mitigate potential risks associated with foreign investments, while allowing the investment that raised the security concerns in the first place. The different types of remedies as well as their scope of application form the main subject matter of this article. The article further analyses their role in FDI screening procedures and their relevance in safeguarding national security concerns.