Brussels, 01/03/2006 (Agence Europe) - France has responded in due time to the Commission's request for an explanation concerning the French decree of December 2005 on monitoring foreign investment, diplomatic sources say. The French authorities consider the decree is not intended to limit the free movement of capital or to question trading laws or public bids. They announce that it is not a matter of protecting companies that have their registered office in France but of guaranteeing public order, territorial security and national defence procurement sustainability. In their views, the scope of the decree was strictly restricted in order to comply with the principle of proportionality and is based on exceptions to the free movement of capital as set out in the Treaty.
On 28 February, the Commission had confirmed the hypothesis of infringement procedure against France on the subject of the decree. “So far, we have not received an answer”, said the spokesman for Charlie McCreevy, European Internal Market Commissioner, adding that the “next stage” would logically consist in “launching infringement proceedings”. When asked the same day about the possible Commission concern over a similar decree being developed in Italy, the spokesman did not wish to comment on the bill. “Charlie McCreevy is informed of the situation and the Commission will play its role of guardian of the treaties”, he simply explained.
At the end of January, the Commission had asked the French authorities to provide an explanation regarding a decree that defines eleven sectors protected against possible takeover bids from foreign investors (see EUROPE 9119). It was concerned about the consequences of such a decree when it comes to the free movement of capital. The sensitive sectors that are to be protected include certain information security services, goods and technology for both civilian and military use, research activities, the production and trade of weapons, private security and gambling. France had one month to justify its action.