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German Industry Strategy 2030

German Industry Strategy 2030
  • United Kingdom
  • Competition, EU and Trade
  • Aerospace, defence and security
  • Industrials


On November 29, 2019 the German government published its “Industry Strategy 2030” paper. While the strategy paper expresses only the intentions of the Ministry of Economics, it has potential implications for Germany’s foreign direct investment control (“AWV”) regime and for transfers of technology outside of Germany.

The Federal Ministry of Economics and Energy (“BMWi”) views the free movement of international capital as a valuable asset and strongly supports this freedom, because foreign investments in Germany contribute significantly to growth, prosperity and jobs, and numerous German companies invest all over the world. The BMWi therefore pursues a liberal policy if investors from abroad want to invest in German companies or acquire a majority stake in them (p. 27).

However, as technological sovereignty is considered to be an essential basis for the functioning of a highly developed industrial society, there is a need for the Federal Government to examine whether third country investors wish to take over critical infrastructures or defense technology companies. Even though the instruments for the protection of technological sovereignty have proven to be effective, the strategy paper suggests, that they must be modernized in view of rapid technological and geopolitical developments (p. 27).

Technology transfers

It has been common practice to impose requirements for technology transfers to third countries, if companies whose technology has received federal funding are to be taken over. The Federal Office of Economics and Export Control has examined such cases on the basis of existing rules. The BMWi will review if and to what extent a modernization is necessary, for example by adjusting existing deadlines for transfer requirements (p. 27).

Acquisition thresholds

Foreign investment and trade law has recently been modernized by lowering the threshold for acquisitions by third country entities to 10 percent (previously 25 percent). By October 2020, the German government will adapt its national investment audit legislation to the amended EU law (the so-called "European Screening Regulation"). The strategy papers intention is to set up a cooperation mechanism to involve other member states and the European Commission in the screening process and to specify the criteria "public order or security". This would make the state's scope of action more precise and moderately broader (p. 27).

Technology and innovation leadership

When technology and innovation leadership are affected as a consequence of a transaction, but the transfer of sensitive or security-relevant technologies to third countries does not fall within the narrow scope of the Foreign Trade Act (Außenwirtschaftsgesetz – AWG) the strategy paper points to the possibility of private sector players having the possibility to intervene as “white knights” and acquire stakes in the concerned companies. The strategy papers proposes, that the German state could moderate this process (p. 28). While it is unclear what “moderate” exactly means, there have been past cases in which the Ministry tried to intervene (unsuccessfully) in favor of domestic solutions in such cases.

State intervention

As a measure of last resort, the state owned bank KfW can consider and implement a temporary state participation in enterprises for sensitive or security-relevant technologies (so called "national recourse option"). In individual cases this has already been done. KfW receives the indemnity from the state that is possible by law and refinances the transaction on the capital market. Since such operations are generally time-critical, the strategy paper suggests, that structures must be created with which the necessary decisions could be taken more quickly and efficiently. This could be achieved by establishing a Standing Committee "National Recourse Option" of the Federal Government at State Secretary level. The strategy papers states that at the suggestion of the BMWi, the Federal Government will work out a concrete definition and legal basis for the committee. (p. 28).

How can Eversheds Sutherland help?

If you would like to further discuss the implications of the Industry Strategy 2030 paper, and how it may affect you and your business, please get in touch with the team.