Energy investments from the European Union subject to approval by the CEISD

Loredana Vlasceanu – Partner at Vlasceanu & Partners

Vlad Velcea – Junior Associate at Vlasceanu & Partners


At the beginning of June, the requirement to obtain the prior approval of the Foreign Direct Investment Review Commission (FDI Commission) for the investments in various strategic areas, including energy, was extended to investors from the European Union.

The notion of EU investor has been defined to include persons who are citizens of EU Member States, legal entities established in these countries which are also controlled from the European Union, as well as trustees who are considered to be from the European Union.

As such, June 10, 2023 marked the entering into force of Law 164/2023 for the approval of Government Emergency Ordinance no 46/2022 on measures implementing Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (“GEO 46/2022”), as well as amending and supplementing Competition Law no 21/1996 (“Law 164/2023”).

The main legislative change brought by Law 164/2023 is the expansion of the obligation to obtain the FDI Commission approval also to energy investments to be made by European Union investors, if the following conditions are cumulatively met:

  • The investment does not represent an economic concentration subject to the Competition Council’s review, thus falling under Article 47 para. (1) of the Competition Law no 21/1996;


  • the value of the investment exceeds the threshold of 2 million Euro.

The assessment criteria applicable for establishing the value of the investment have not yet been regulated, and it is unclear at this stage whether only the initial investment for the acquisition of assets/shares in energy companies will be taken into account, or also the expected subsequent investments, such as those related to the final authorisation of energy projects or their construction. Regulating how the value of the investment is calculated would also be of interest in order to understand how loans granted by investors after the initial acquisition for the development and construction of the project are handled. According to the new legislative changes, the Competition Council has the duty to regulate by means of instructions the computation criteria for the investment value.

It is worth mentioning that the definition of foreign direct investment has not been changed and does not include investments from the European Union. Thus, the provisions of GEO 46/2022 referring exclusively to foreign direct investments are not applicable to investments from the European Union.

One of these provisions is related to the Euro 2 million threshold mentioned above. Thus, Art. 3 para. (2) of GEO 46/2022 provides that foreign direct investments with a value below this threshold may also be subject to prior approval if, by their nature or potential effects, they may have an impact on public security or order or represent a potential risk to them. It is unclear whether it was the intention of the legislator for this exception not to apply to European investors or whether it is simply an inadvertent omission.

The relevant sanctions in case of non-compliance with the obligation to obtain the FDI Commission opinion have also remained regulated only with regard to foreign direct investments. It is not clear whether the legislator's intention was to except European investors from the application of these sanctions and what penalties can be applied to European investors.

It is worth mentioning that another change introduced by Law 164/2023 is the possibility to sanction the implementation of an investment without the FDI Commission approval with the annulment of such investment, while in the past the only applicable sanction was the fine. However, as mentioned, this sanction also concerns foreign direct investments, so, at first glance, it would not be applicable to European investors.

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