France's New Investment Control In The Cybersecurity And Technology Sectors

Author:Ms Stephanie Faber and Véronique Collin
Profession:Squire Patton Boggs LLP
 
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Decree No. 2058-1057 of November 29 2018 on foreign investments subject to prior approval

France, who in recent years has been relatively open to overseas investors, has extended its control over foreign investment into certain 'sensitive' industries, particularly the IT, cybersecurity, communication and technology sectors.

Extension of the relevant activities

The sectors, listed in Articles R.153-2 of the French Monetary and Financial Code, are considered sensitive either because they contribute to the exercise of public authority, or because they represent a significant risk to the national interest with respect to public order and security, or to national defence.

The decree of 29 November 2018, which came into effect on 1 January 2019, extended the range of activities that are considered as sensitive by adding:

Technological devices "able" to intercept correspondence, communication or electronic data; IT security systems' products and services; R&D in relation to cyber security, artificial intelligence, robotics, additive manufacturing/3D printing, and semiconductors; Equipment, products or services, which are essential to guarantee the integrity, security and continuity of aerospace operations; Equipment, products or services, which are essential to guarantee the integrity, security and continuity of the specific IT and electronic systems needed by the national police, the military police, the civil security services or for the public security work of customs officials; Data hosting services of data where its compromise or disclosure is likely to affect public order, public security or national defence; and R&D in relation to dual-use goods and technologies. The existing list already includes, amongst others:

Equipment, products or services, which are essential to guarantee the integrity, security and continuity of the operating of electronic communication networks and service...

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