Study Of National Security Review For Foreign Merger And Acquisition In Germany

With the acceleration of globalization, foreign merger and acquisition as the most important form in foreign direct investment, has subsequently developed unprecedentedly. However, national security problems subsequently become an hot issue to many countries. How to balance between encouraging and regulating foreign investment, avoiding national security threatens, is a common challenge that countries wanting to attract more foreign capitals confronted with.Even though Germany has established its national security review system for foreign merger and acquisition, our articles and researches only focus on Germany’s system are comparatively not enough. Among those articles and researches, most scholars introduce Germany’s system briefly as a whole, without details in-depth. Thus, this thesis chooses Germany which is the representative of civil law system as the object of research, illustrating and analyzing its national security review system for foreign merger and acquisition. Moreover, suggestions for improving China’s system will be offered.This thesis is divided into four parts. The first one is an overview about national security review system for foreign merger and acquisition. In order to clarify the argument, definitions related to the thesis such as foreign merger and acquisition, national security, and national security review system for foreign merger and acquisition are in this part. Followings are the significance of the national security review system, explaining from both risks to host-country in foreign investment and the functions of the system. This part also compares the differences and relations between national security review and anti-monopoly review.The second part describes and analyzes the Germany’s current national security review system for foreign merger and control. The system was built in Germany in 2009, on the basis of the amendments of Foreign Trade and Payments Act and Foreign Trade and Payments Ordinance. And it has been improved through the latest amendments in 2013. Though Germany’s system is effected by the Foreign Investment and National Security Act of 2007(FINSA) in United States, it still reserves its distinctions in review body, object, standards and procedures.The third part gives comments to Germany’s national security review system for foreign merger and acquisition. As a member of EU, Germany should take EU Law in to consideration adequately when it comes to national legislation. Thus, Germany chooses “public order or security” rather than “national security”. For the standards of public order or security, Germany quotes precedents of European Court of Justice directly. Germany also adjusts on legislation to ensure the national security review and anti-monopoly review can work well simultaneously. Meanwhile, sovereign wealth fund and supervision and legal remedy of the system are concerned in Germany’s national security review system for foreign merger and acquisition.The fourth part illustrates the outlines of China’s national security review system for foreign merger and acquisition. Compared to Germany’s system, it has some deficiencies. Taking Germany’s legislation and practical experiences, this thesis offers certain suggestions. China doesn’t put national security on the equivalent legislation level, only mentioned briefly in Article 31 in Antitrust Law. But the details remain for regulations and ordinances. Thus, laws specialized for foreign investment are needed. Nevertheless, China has not defined the object of national security review clearly, which may leave loopholes for vicious foreign investors. How different departments work coordinately in national security review, and how investors protect their legal rights in the review also matter in China’s current system.