The transaction involved the acquisition of essentially all of Sympatex Technologies GmbH’s assets, in particular its trademark rights and other key intangible assets. With this acquisition, Pidigi ensures the continuation of the day-to-day operations of the long-established trademark Sympatex.

ADVANT Beiten provided Pidigi with comprehensive advice on all legal aspects of the transaction, including the structuring and execution of the asset deal, as well as matters relating to corporate law, intellectual property law and labour & employment law.

Advice on the Italian legal aspects was provided by Stefano Dindo, a lawyer at the law firm Dindo, Zorzi e Associati in Verona which referred the matter to ADVANT Beiten.

Since 1986, Sympatex Technologies GmbH has been developing innovative, PFAS-free membrane technologies for functional clothing, footwear, protective clothing and technical applications. Pidigi S.p.A. has been operating internationally since 1953 as a supplier of materials to the footwear, leather goods and sportswear industries.

Advisor to Pidigi S.p.A.:
ADVANT Beiten: Matthias W. Stecher (in charge, IP/IT), Virginia Mäurer, Maike Pflästerer (both Labour & Employment), Christoph Heinrich (Antitrust), Tanja Hogh Holub and Christian Hess (both IP/IT), Mario Weichel (Corporate/M&A).

Dindo, Zorzi e Associati: Stefano Dindo

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The DGQ is a leading German professional association for quality management and quality assurance. Since its foundation, it has been committed to developing and promoting quality expertise in business, public administration and society. The DGQ’s key areas of focus include continuing professional development, personal certification, professional exchange, and the promotion of modern management systems and sustainable organisational development.

DQS stands for the German Society for the Certification of Management Systems. The organisation was founded in 1985 by DGQ, DIN and other German industry associations, and is now an international provider of certification, auditing and business assurance services, with clients in more than 60 countries. DQS supports companies across all sectors with regulatory requirements, quality standards, and ESG and compliance issues.

Montagu is an international private equity investor specialising in the healthcare, financial services, technology and industrial sectors. The firm supports its portfolio companies in achieving sustainable growth, realising operational potential and strengthening their market position over the long term. Montagu’s investment is intended to support DQS through its next phase of growth. In particular, the firm plans to invest in digitalisation, international expansion and the broadening of its service offering in the areas of digital trust, medical devices and ESG. With extensive industry experience and a clear focus on value creation, Montagu is one of the established investors in the European mid-market segment.

ADVANT Beiten comprehensively advised DGQ on all legal aspects of the transaction.

Advisors to Deutsche Gesellschaft für Qualität e.V. (DGQ):
ADVANT Beiten: Dr Christof Aha, Mark Thönißen (both Corporate/M&A, Frankfurt), Prof. Dr Christian Heinichen (Antitrust), Dr Markus Ley (Corporate/M&A, both Munich).

Advisors to DQS Holding:
act legal: Christoph O. Breithaupt, Julia Rosigkeit, Sandra Ryssok, Christoph Tornau 
Houlihan Lokey as M&A Berater: Christian Keller, Kevin Rogstad, Alexander van Aubel, Jack de Laney

Advisors to UL Solutions:
Eversheds Sutherland: Anthony Cross, Dr Johannes Pfeiffer 

Advisors to DIN e.V.: 
PwC Legal: Thomas Moritz, Alexander Friedheim

Advisor to VDMA e.V.:
LPA Law: Dr Leif Gösta Gerling 

Advisor to ZVEI e.V.:
Baker Tilly: Jens Suhrbier

Advisor to SPECTARIS e.V.:
Grothmann Geiser: Frank Geiser

Advisor to HDB e.V.:
Inhouse: Dr Henning Koewius

Advisor to Montagu: 
Linklaters: Dr Ralph Drebes, Dr Christian Hundeshagen, Dr Johannes Porsch, Anna Tamara Castaner Coll

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Christof Aha
Lawyer
ADVANT Beiten 
+49 69 756095-451
christof.aha@advant-beiten.com

Klinikum Ernst von Bergmann has sold its majority stake in Lausitz Klinik Forst GmbH to the Foundation Stiftung Evangelische Diakonissenhaus Berlin Teltow Lehnin as part of a structured bidding process.

Advisors to Klinikum Ernst von Bergmann:

ADVANT Beiten: Dr Karl-Dieter Müller (Berlin, in charge), Robert Schmid, Benjamin Knorr, Dr Thomas Jilg (all Corporate/M&A, Berlin), Dr Silke Dulle (Medical Law, Berlin), Helmut König (Tax, Dusseldorf), Christoph Heinrich (Antitrust, Munich)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr. Karl-Dieter Müller
Lawyer, Tax Consultant
ADVANT Beiten 
+49 30 26471-262
Karl-Dieter.Mueller@advant-beiten.com

Wienerberger, headquartered in Vienna, is a globally active producer of pipe systems, façade materials, roofing materials, wall-building materials, pavers and solar systems. With this transaction, Wienerberger continues its international growth strategy and supplements its product portfolio. 

The Italcer Group is a globally active manufacturer of premium ceramic products with production sites in Italy and Spain. The company employs nearly 1,200 people and generated revenues of approximately EUR 350 million in 2025. In a first step, Wienerberger will acquire 50 percent plus one share from the sellers. A call option to acquire the remaining shares is scheduled for the first half of 2027.

The merger control aspects of the transaction are led by ADVANT Beiten partners Uwe Wellmann and Christoph Heinrich, who jointly oversee the German merger control proceedings. In addition to the filing with the German Federal Cartel Office (Bundeskartellamt), they are coordinating the parallel filing in Austria in close cooperation with E+H (Vienna). 

The M&A workstream is led by an E+H team headed by partner Josef Schmidt and associate Alina Holzer. ADVANT Nctm partners Matteo Trapani and Filippo Ughi are responsible for the Italian aspects of the transaction and, together with a multidisciplinary team, provide comprehensive advice on Italian law. Cuatrecasas advices in Spain. Legance represents the sell-side. 

ADVANT regularly advises Wienerberger AG on strategic transactions. These include, among others, the largest acquisition in the company’s history to date – the acquisition of significant business operations of the French Terreal Group, which substantially strengthened Wienerberger’s position in the roofing and solar solutions sector. By once again advising on a cross-border transaction, ADVANT underscores its integrated European platform and the close cooperation of its teams in complex M&A and merger control mandates.

Advisor Wienerberger AG:

ADVANT Beiten: Uwe Wellmann (Berlin) and Christoph Heinrich (both lead partner), Dr Cathleen Laitenberger (both Munich, all Antitrust).

ADVANT Nctm: Matteo Trapani und Filippo Ughi (both lead partner), Stefano Casamassima, Marianna Loprevite und Giacomo Zagaria (all Milan, all Corporate/M&A).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Uwe Wellmann
Rechtsanwalt
ADVANT Beiten 
+49 30 26471-243
Uwe.Wellmann@advant-beiten.com

The ADVANT team headed by Dr Christof Aha had already advised LUEHR FILTER GmbH in 2021 on the sale of its 50% stake in EWK Umwelttechnik GmbH to the Swedish Valmet Group.

LUEHR FILTER GmbH has been successfully operating in the field of air and gas purification for 85 years and specialises in dry flue gas cleaning systems in particular.As a third-generation family-run business, it combines flexibility with technical expertise and, with more than 300 employees and a large number of references, is now a globally respected partner for gas purification systems in almost all branches of industry.

MARTIN GmbH für Umwelt- und Energietechnik is one of the world's leading suppliers of thermal waste treatment plants. Following the integration of LAB SA in 2022, the MARTIN Group is gaining another renowned supplier with the acquisition of LUEHR, consolidating its role as an innovative full-service provider in the field of flue gas cleaning.
 

Advisor to LUEHR Filter GmbH:
ADVANT Beiten: Dr Christof Aha, Dr Markus Ley (both lead), Mark Thönißen (all Corporate/M&A) and Christoph Heinrich (Antitrust Law).

Advisor to MARTIN GmbH:
Rödl & Partner: Patrick Satzinger and Frederic Wolff

PR
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The Büter Group comprises German and Dutch (production) companies and is one of Europe's leading companies in the hydraulics industry. Founded in 1965, the family-owned company is headquartered in Emmen (NL) and has production facilities in Haren and Meppen (DE). It employs around 550 people. Over the past six decades, the family-owned company has developed numerous patents and utility models in cylinder and lifting technology and is now one of the technological market leaders in the industry.

NPM Capital, part of the family-owned SHV Group, is an investment partner based in the Benelux countries that focuses on long-term partnerships with family-owned and entrepreneurially managed companies. As part of the transaction, NPM Capital is acquiring the entire group of companies, including the two German subsidiaries Büter Hebetechnik GmbH and Büter Maschinenfabrik GmbH.

By joining forces with NPM Capital, Büter Group is well positioned to accelerate its growth strategy and continue to invest in technological innovation and international expansion. Under the new ownership, Büter Group will continue to operate independently.

Regarding the sale of the Dutch entities, the international law firm Houthoff acted on ADVANT Beiten's recommendation. Taurus Corporate was involved as an M&A advisor. The acquisition is still subject to the usual regulatory and antitrust approvals. The parties have agreed not to disclose the transaction volume. 

Advisors to the shareholders of Büter Group:
ADVANT Beiten: Dr Guido Krüger (Corporate Succession/Taxes), Prof Dr Hans-Josef Vogel (M&A, both lead partners), Julian Krause (Corporate Succession/M&A), Dr Magdalena Rindermann-Haugwitz (Corporate/M&A), Volker Küpper (Taxes), Thomas Herten (Real Estate), Dr Andreas Imping, Anna Kubitz (both Labour Law, all Dusseldorf), Christoph Heinrich (Antitrust Law, Munich) and Maximilian Steffen (Taxes, Hamburg).

PR
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Yancoal International Holding Co., Ltd. acquires 51 percent of the shares in CFH GmbH within the scope of the transaction. The parties have agreed not to disclose the transaction volume.

The globally operating CFH Group of Companies bundles under its umbrella a number of subsidiaries and holding companies, all specialising in engineering services enabling innovative solutions related to the topic of air at the workplace. 

Yancoal International Holding Co., Ltd. brings comprehensive experience in global resource allocation and industrial cooperation. The stake of Yancoal International Holding Co., Ltd. represents an important milestone in the international growth strategy of CFH Group of Companies. The partnership opens up new opportunities for technological innovation, global market presence and sustainable development. New standards in developing intelligent ventilation and environmental technologies are defined together - in particular for applications in mining, tunnelling and industry. 

The international team of ADVANT Beiten headed by Dr Martin Rappert (Dusseldorf) and Susanne Rademacher (Beijing) regularly advises companies on investments and business activities in Europe and the People's Republic of China.

Advisors to CFH GmbH: 
ADVANT Beiten: Dr Martin Rappert, Nico Frielinghaus, Prof Dr Hans-Josef Vogel, Dr Winfried Richardt, Sarah Heinrichs, Simon Litterst (all Dusseldorf), Susanne Rademacher (Beijing, all Corporate/M&A), Christian Döpke, Mathias Zimmer-Goertz (Data Protection/IP, Dusseldorf), Christoph Heinrich (Antitrust, Munich), Dr Christian von Wistinghausen (Foreign Trade Law, Berlin), Thomas Herten (Real Estate, Dusseldorf), Vasily Ermolin (Sanctions, Moscow).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Laumann Group, a family-owned group with headquarters in Sendenhorst in the Northwest of Germany, is a leading provider of building-related product solutions and IT-services. The Group's range of services extends from PVC profiles for windows and doors ("VEKA" and "GEALAN"), aluminium profiles, PVC panel and façade solutions to surface technology and IT consulting. It generates annual sales of EUR 1.6 billion.

Epwin Group is listed on the London Stock Exchange and generates annual sales of over EUR 380 million. The company is a leading British manufacturer of PVC and aluminium profiles for windows and doors, finished windows and doors, façade systems, decking and GRP building products. Apart from that, Epwin Group is also active in the trading and recycling of building materials.

The merger control workstream of the transaction is being led by ADVANT Beiten Partner Christoph Heinrich who is coordinating the proceedings with the UK Competition and Markets Authority (CMA) in collaboration with Euclid Law (London). ADVANT Beiten is also advising on the future integration of the target business into Laumann Group.

ADVANT Beiten regularly advises Laumann Group and its subsidiaries, such as on the acquisition of the aluminium system manufacturer Procural in 2023 and the façade specialist Vinylit in 2021.

Advisors to Laumann Group:
ADVANT Beiten: Christoph Heinrich (Munich, Antitrust Law), Dr Guido Krüger (Dusseldorf, Tax Law), Dr Christian Ulrich Wolf (Hamburg, Corporate Law)
Euclid Law: Oliver Bretz, Becket McGrath (both London, Antitrust Law)
Osborne Clarke: Jonathan King, Ed Nisbeth, Stuart Miller, Oliver Woods, Tim Rouse, Dominic Ross (all London, Corporate & Finance), Olexiy Oleshchuk (Munich, Finance)
Inhouse: Björn Baltes, Raphael Nießen

Advisors to Epwin Group: 
Eversheds Sutherland UK (Corporate)

Public Relations
Frauke Reuther
Communications Manager
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Christoph Heinrich
Rechtsanwalt 
ADVANT Beiten
+49 (89) 35065 - 1332
Christoph.Heinrich@advant-beiten.com

ApoBank and the AXA Insurance Group have been cooperating in the sale of financial and insurance products for more than 25 years. Both companies now want to bundle the sales activities of their mobile sales companies apoFinanz and Deutsche Ärzte Finanz more closely. 

As part of the restructuring, apoFinanz will be merged with Deutsche Ärzte Finanz. At the same time, apoBank acquires additional shares in Deutsche Ärzte Finanz. The merger creates the largest financial sales organisation for academic health professionals in Germany. With around 500 independent financial advisors, the new company will serve more than 320,000 customers. The merger will be completed in August 2025. A cross-office team from ADVANT Beiten is providing apoBank with comprehensive legal advice.

With more than half a million customers and total assets of around EUR 52 billion, apoBank is the largest cooperative retail bank in Germany and the number one financial services provider in the healthcare sector. Its customers are primarily members of the healthcare professions, their professional organisations and associations, healthcare facilities and companies in the healthcare market.

With the reorganisation of their joint sales subsidiaries, the partners want to combine the strengths of the companies and use the synergies for additional growth. 

Advisors to apoBank: 

ADVANT Beiten: Heinrich Meyer, Rainer Süßmann (both lead partners in charge, Banking/Finance, Frankfurt), Dr Christian Ulrich Wolf, Maren Dedert (both Corporate/M&A, Hamburg), Christoph Heinrich, Prof Dr Christian Heinichen (both Antitrust Law, Munich), Oliver Korte, Christopher D. Harten (both Commercial, Hamburg), Dr Thomas Drosdeck, Dr Gerald Müller-Machwirth (both Labour Law), Susanne Klein, Lennart Kriebel and Daniel Trunk (all IT- and Data protection Law, all Frankfurt)

Advisor to AXA: Hengeler Mueller

Public Relations
Frauke Reuther
Communications Manager
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Heinrich Meyer
Rechtsanwalt 
ADVANT Beiten
Phone: +49 69 756095-414
heinrich.meyer@advant-beiten.com

The financing of the EU's tasks must be secured in the long term and requires comprehensive budget planning. The basis of this budget planning is the so-called "Multiannual Financial Framework“, and the next one must be adopted unanimously by the Member States for the years 2028 to 2034 on a proposal from the European Commission with the consent of the European Parliament. The Commission presented its draft on July 16, 2025, and it is quite ambitious. But what exactly is the "Multiannual Financial Framework"? Which changes does it make compared to the previous funding period? What happens next?

What is the "Multiannual Financial Framework"?

Based on Art. 312 of the Treaty on the Functioning of the European Union (TFEU), the "Multiannual Financial Framework" (MFF), which is the responsibility of the European Commission, covers the EU's budget planning for at least five – usually seven – years. It determines the financial scope of the annual EU budget by setting binding ceilings. The focus is always on promoting European cooperation, particularly in terms of growth and competitiveness. Long-term budget planning enables investment projects to be aligned over several years and thus designed more efficiently. Variable elements of the MFF allow a flexible response to crises and emergencies such as natural disasters. Moreover, it enables financial resources to be deployed quickly and precisely.

In addition to the MFF, the EU also has subsidiary budgets. The most prominent example of this is NextGenerationEU (NGEU). This is a temporary recovery program that was launched in 2020 to deal with the economic and social impact of the COVID-19 pandemic. With a volume of more than EUR 800 billion, NGEU aims to finance economic recovery in the EU and promote investment.

There are also other budgets outside the traditional financial framework, such as the European Peace Facility (EFF). The facility was set up for the period 2021-2027 with a volume of EUR 5.69 billion and serves to support countries affected by military conflicts.

What are the main innovations of the MFF 2028-2034?

A – Increasing the budget and new sources of revenue

The Commission wants to significantly increase the budget. The current MFF 2021-2027 has a total volume of around EUR 1,211 billion, which corresponds to around 1.11% of the gross national income (GNI) of the EU-27. In addition, there are funds from the "Next Generation EU" reconstruction program amounting to around EUR 800 billion.

The current EU budget, including NGEU funds, therefore amounts to around EUR 285 billion per year. In comparison, the German federal budget alone is already around EUR 450 billion, i. e. almost twice as much.

The European Commission considers the current budget volume for the future MFF 2028-2034 to be insufficient, particularly regarding the need to overcome global instabilities and to finance climate protection and biodiversity. The European Commission wants to invest EUR 2,000 billion to future-proof the EU. "The next Multiannual Financial Framework is the most ambitious we have ever proposed. It is more strategic, more flexible, more transparent", says European Commission President Ursula von der Leyen. But where will this funding come from?

To keep the Member States' national contributions stable, the European Commission is trying to tap into new own resources. At present, the fulfilment of EU tasks is largely financed by contributions from the Member States, and they would rather "transfer less to Brussels" than more. On the one hand, ecological levies are proposed, i. e. revenues from the EU Emissions Trading System (ETS) and the Carbon Border Adjustment Mechanism (CBAM) are to be used permanently as own resources, with 30 % of ETS revenues flowing into the EU budget in addition to the proceeds from the CBAM. On the other hand, revenue is to be generated from the taxation of multinational corporations: With the planned taxation of corporate profits in the EU through the BEFIT (Business in Europe: Framework for Income Taxation) instrument as well as revenue from the OECD-driven Pillar One of the global minimum tax system.

B – Changes

The heart of the new MFF are the national and regional partnership plans, which shall form the basis for investments and reforms. The European Commission would like to invest EUR 865 billion just for this.

In addition, the European Commission intends to modernize the Common Agricultural Policy (CAP) and adapt it to new ecological and social requirements. A further EUR 300 billion has been earmarked as income support for farmers, which corresponds to double the amount of the agricultural reserve compared to the previous MFF.

In addition, programmes to reduce economic and territorial disparities between regions should be more efficient and customs and excise duties should be optimized.

Another important proposal is the establishment of a European Competitiveness Fund with almost EUR 410 billion. This fund bundles up to 14 previously separate programmes, including innovation, digitalization, climate protection, health and defence, into a single, thematically focused fund. The aim is to promote strategic investments in key technologies, drive forward industrial decarbonization and strengthen Europe's global competitiveness.

What criticism is there of the planned changes to the MFF 2028-2034?

The European Commission's draft has not met with a positive response everywhere. The European Parliament has already rejected the European Competitiveness Fund proposed by the European Commission as inadequate. Large funds are considered unsuitable for guaranteeing parliamentary control. It also criticizes the model of a national plan per member state ("single plan"), as is practiced with the Recovery and Resilience Facility. The European Parliament will not accept any restriction of its duty of oversight and democratic control over EU funds. Instead, it is calling for a differentiated structure with strong parliamentary control and the involvement of regional and local authorities.

Several member states also reject a significant increase in the EU budget. If this were to be accompanied by an increase in the expenditure ceiling above the current level of 1 % of GNI, which in turn is criticized by the European Parliament and the European Commission. "Frugal" states such as Germany have already spoken out against an increase in the EU budget. France has even announced its intention to cut payments to the EU budget in 2026.

Many member states are sceptical about new, mandatory own resources and additional financial burdens that go beyond management or structural reforms. Regardless of the Commission's proposals for new financing instruments, differences remain, for example regarding the integration of new thematic areas or centralized control.

How will defence be financed?

There is overwhelming consensus on increasing the defence budget. The financing of defence is based on the European Defence Fund (EDF). This is the central EU instrument for promoting research, development and joint procurement of modern defence technologies. For the current period 2021-2027, the fund has a budget of EUR 7.3 billion at its disposal. Given the current geopolitical situation, the European Commission has invested EUR 910 million in strengthening the innovative and interoperable defence industry in Europe this year. The European Commission's proposal provides for a special mechanism with a financial impact of almost EUR 400 billion to deal with serious crises. EUR 131 billion is to be invested from the Competitiveness Fund in the areas of defence and space. A further EUR 100 billion is earmarked for Ukraine's recovery and resilience. 

In addition to the EDF, the European Commission is planning a comprehensive rearmament as part of its "ReArm Europe" initiative. To this end, it plans to borrow EUR 150 billion through capital market bonds. This should enable rapid and targeted investments without placing an undue burden on national budgets. Over the next four years, around EUR 800 billion will be mobilized, a large part of which is to be covered by an increase in national defence spending by the member states of 1.5 % of GDP.

Further considerations concern the establishment of a so-called "rearmament bank", which is supported by EU member states as well as foreign partners such as the USA and the UK, to simplify and bundle financing for defence technologies. This bank would issue triple-A bonds backed by the shareholder states and thus mobilize additional funds without increasing the debt levels of the member states.

What happens next?

The proposal for the 2028-2034 MFF submitted by the European Commission on 16 July 2025 will be discussed over the next two years. The new MFF must be adopted unanimously in the Council and by simple majority in the European Parliament.

How the European Commission will manage the balancing act between future-orientated policy with new tasks and expenditure desired by the European Parliament and the savings wishes of the Member States cannot be predicted. So far, negotiations have been characterised by the paradox that every Member State wants to get more out than it pays in. Furthermore, in the EU as elsewhere, regrettably, different points are being linked together: For example, the approval of EU sanctions with commitments in favour of individual EU Member States, as in the recent case of Slovakia's delayed approval of the 18th sanctions package against Russia. In the next two years, there will certainly be tough disputes over the proposal. Besides, the MFF 2028-2034 will certainly look different from what was proposed.

Sources

Proposal of the European Commission

https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/eu-budget-2028-2034_en

Parliament's priorities for the Multiannual Financial Framework from 2028 onwards | News | European Parliament

Budget proposal "simply not enough", say MEPs | News | European Parliament

Example comments from Baden-Württemberg

https://stm.baden-wuerttemberg.de/de/service/presse/pressemitteilung/pid/vorschlag-der-eu-kommission-fuer-mehrjaehrigen-finanzrahmen 

Lysine is an essential amino acid that is used in the pharmaceutical, food and animal feed industries. Lysine is a key ingredient for health and food security in the EU, as it is used in many medicines (painkillers, parenteral nutrition, perfusion) and is contained in all modern animal feed for livestock farming. The essential amino acids produced in the EU through fermentation reduce the European Union's dependence on imports and reliance on imported soya meal.

Protecting the EU lysine industry from dumped and injurious imports of lysine from China is imperative to prevent the EU from becoming completely dependent on imports of this and other essential amino acids by fermentation. Lysine of Chinese origin is sold at high dumping margins, causing serious injury to the EU industry.

Eurolysine also contributes to the achievement of environmental targets, as the carbon footprint of lysine produced in the EU is at least five times lower than that of lysine produced in China.

Several EU Member States have requested that lysine be categorised as a critical chemical under the EU Critical Chemicals Act.

The product concerned is imports of lysine and its esters, salts thereof and feed additives, consisting of 68 % or more but not more than 80 % by weight of lysine sulphate and not more than 32 % by weight of other components such as carbohydrates and other amino acids, on the anhydrous basis. 

The process underlines ADVANT Beiten's successful trade practice. Only recently, in January 2025 that Prof. Dr Rainer Bierwagen's team achieved the imposition of definitive anti-dumping duties in favour of the European erythritol industry.

Advisors to the European lysine industry:

ADVANT Beiten: Prof Dr Rainer Bierwagen (lead), Gábor Báthory, Christian Hipp, Dr Dietmar O. Reich.

Source EU: 

Commission Implementing Regulation (EU) 2025/1330 of 10 July 2025 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of lysine originating in the People's Republic of China
Commission Implementing Regulation (EU) 2025/74 of 13 January 2025 imposing a provisional anti-dumping duty on imports of lysine originating in the People's Republic of China; OJ L of 15 January 2025;
Commission Implementing Regulation (EU) 2024/2732 of 24 October 2024 making imports of lysine originating in the People's Republic of China subject to registration; OJ L of 25 October 2024; 
Notice of initiation of an anti-dumping proceeding concerning imports of lysine originating in the People's Republic of China; OJ C of 23 May 2024 (C/2024/3392).

Press contact
Mrs Frauke Reuther
Communications
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Mindfactory, based in Wilhelmshaven, was founded in 1996 and has since become one of the largest online retailers for gaming and hardware components. The company has more than 100,000 items in its product range and receives over 4 million visitors to its website every month.

The media company heise is part of the internationally active heise group based in Hanover. The current acquisition expands heise's existing portfolio, which includes the areas of IT knowledge (c't, heise online), online marketing (heise regioconcept) and price comparison (guenstiger.de and Geizhals), to include hardware trading. All employees and customer relationships will be taken over by heise and the site in Wilhelmshaven will be fully retained.

The cross-location team of ADVANT Beiten represented heise in the merger control proceedings before the German Federal Cartel Office. The authorities have yet to decide on the merger.

ADVANT Beiten regularly advises the heise group on antitrust law, most recently in 2023 on the investment in "gewusst-wo".

Advisors to heise: 
ADVANT Beiten: Uwe Wellmann (Berlin), Christoph Heinrich (Munich, both Antitrust Law).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Uwe Wellmann
Rechtsanwalt 
ADVANT Beiten
+49 (30) 26471 – 243
Uwe.Wellmann@advant-beiten.com

MFP is a major Irish supplier of pipe solutions which previously belonged to the Irish Grafton Group plc. In 2024, MFP generated sales of around EUR 25 million with drainage, gutter and cable protection systems. In future, their production will be bundled at the Wienerberger site in Cork to ensure greater efficiency and sustainability and to achieve attractive synergy effects. With this transaction, Wienerberger AG, which is listed on the Vienna Stock Exchange, is further pursuing its growth strategy and recognising the significant growth potential in the construction sector in Ireland.

ADVANT regularly advises Wienerberger AG, for instance on its largest acquisition in the company's history, the purchase of key business areas of the French Terreal Group last year.

Advisor to Wienerberger AG:
ADVANT Beiten: Uwe Wellmann (Berlin), Christoph Heinrich (Munich, both Antitrust Law).
William Fry (Ireland) – Irish Antitrust Law
Eversheds Sutherland (Ireland) – Corporate/M&A

Public Relations
Frauke Reuther
Communications Manager
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

The Forced Labour Regulation is explicitly not intended to create any additional human rights due diligence obligations for economic operators that are not already provided for in Union or national law. Rather, the Forced Labour Regulation is intended to complement the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D), which is to be transposed into national law by mid-2026, and the human rights due diligence obligations for certain (large) EU and non-EU companies to be introduced by mid-2027 at the latest (cf. our German blog post from March 18, 2024: EU Supply Chain Act: Agreement and agreement text | ADVANT Beiten) or alongside the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG, see the commentary on the LkSG by Depping/Walden). In contrast to the aforementioned "due diligence laws", the Forced Labour Regulation contains a general ban on products made with forced labour (see our German blog post from 14.03.2024 EU Regulation banning forced labour is coming (and EU Supply Chain Act perhaps still?) | ADVANT Beiten). In order to avoid the sanctions that could be imposed in the event of a breach of the ban, the companies concerned have an economic incentive to ensure that the products they sell are not made with forced labour.   

1. Rules for economic operators, the Commission and the Member States

The ban is aimed at economic operators. This is any natural or legal person or association of persons who places or makes available products on the Union market or exports products, regardless of their registered office, company size, sector or similar. In future, the authorities designated by the Member States or the Commission will monitor whether economic operators comply with the obligations under the Regulation - i.e. not placing on the market, not making available and not exporting the relevant products.

For cooperation and communication between the authorities and the Commission, the Commission coordinates the work on the Union network. The Commission provides a website, the forced labour single portal. In particular, helpful information is to be published on this portal. This includes, for example, guidelines still to be drawn up by the Commission (including with regard to due diligence obligations in relation to forced labour), a database still to be set up for areas and products with a risk of forced labour and notifications in connection with inspections and bans. The monitoring authorities are going to use these, for example, to transmit data in connection with investigations.

2. Official investigations

In future, economic operators must be prepared for preliminary and main investigations and field inspections by the competent monitoring authorities. As part of the preliminary investigation, they must provide the competent monitoring authority with documentation on their measures to identify, prevent, mitigate or even end the risk of forced labour in their operations and supply chain at short notice. If there are reasonable grounds for suspicion, the authority will initiate a main investigation, which is accompanied by in-depth inspections. The authorities should apply a risk-based approach to the investigations. They use information from various sources and apply the following criteria:

• the scale and severity of the suspected forced labour, including whether forced labour imposed by state authorities could be a concern.
• the quantity or volume of products placed or made available on the Union market.
• the share of the part of the product suspected to have been made with forced labour in the final product.

The lead competent authority may respond differently if it determines that the product under investigation was produced with forced labour. Depending on the product and the type of violation, it can, for example, prohibit the placing on the market or making available of the product or request the economic operator to prove that forced labour in the supply chain has been eliminated within a certain period of time. Fines can also be imposed.

The Commission is responsible if the suspected forced labour takes place outside the EU. If the forced labour takes place on the territory of a member state, the authority there has lead responsibility. They may cooperate with other competent authorities and request information.

3. Challenges for economic operators

All economic operators should (also) take a critical look at the supply chain of their products with regard to the EU Forced Labour Regulation and the sanctions that may be imposed in the future for violations of the ban on forced labour (in addition to fines, in particular the ban on further distribution of the products in question). To this end, they can also make use of the tools provided by the Commission. In future, companies should monitor their supply chain and document this in order to prepare for investigations. They must be able to make their findings available within a few working days in order to be able to refute the suspicions of the respective authority that justify the preliminary investigation as far as possible. In particular, companies that are subject to the Act on Corporate Due Diligence Obligations in Supply Chains (LkSG) can draw on their already established risk management measures and supplement them accordingly.

4. Outlook

The Forced Labour Regulation is intended to open new possibilities for the authorities to intervene in EU law, such as the detention of products, and thus take a further step towards combating forced labour. Once the Regulation has been signed by the President of the European Parliament and published in the Official Journal of the European Union, the Forced Labour Regulation will enter into force on the day after publication. It will apply three years after its entry into force, i.e. probably at the end of 2027.

Dr Daniel Walden
Prof. Dr Rainer Bierwagen
Dr André Depping

^{1 See the press release of the Counsil and the English version of the Regulation}

Amphenol is one of the world’s largest designers, manufacturers and marketers of connectors and interconnect systems, antennas solutions, sensors and high-speed cable.

Luetze International Group is active worldwide and consists of various companies in a holding structure. The group of companies has a tradition of over 60 years in automation and is one of the leading companies in the industry today. Luetze Group offers innovative solutions in the areas of highly flexible cables, cable assemblies, interfaces, power supply and monitoring as well as control cabinet wiring.

Luetze Group's range of services complements Amphenol's portfolio in various segments of the fast-growing electronics market and underlines Amphenol's future-oriented, cross-border positioning.

In this transaction, ADVANT partner firm ADVANT Altana advised on French law, Fox Williams advised on UK law, Havel & Partners advised on Czech law, Kellerhals Carrard advised on Swiss law and E+H advised on Austrian law.

ADVANT regularly advises Amphenol on European M&A projects, most recently ADVANT Altana and ADVANT Beiten jointly advised Amphenol on the acquisition of the CMR Group based in France.

Advisor Amphenol Corporation: ADVANT Beiten: Dr Christian von Wistinghausen, Tassilo Klesen (both lead partners in charge), Olga Prokopyeva (all Corporate/M&A, Berlin), Susanne Rademacher, Lelu Li, Kelly Tang, Dr Jenna Wang-Metzner (all Corporate/M&A, Beijing), Michael Riedel (Labour & Employment, Berlin), Carsten Pütger, Danah El-Ismail (both Real Estate, Berlin), Mathias Zimmer-Goertz, Christian Döpke (both IP/IT/Media, Dusseldorf), Uwe Wellmann (Antitrust Law, Berlin), Christoph Heinrich (Antitrust Law, Munich), Dr Marion Frotscher and Simon Bauer (both Tax, Hamburg).

Advisor Sellers of Luetze Group: Heuking Kühn Lüer Wojtek: Dr. Rainer Herschlein, LL.M., Dr. Emanuel Teichmann (both Corporate/M&A, Stuttgart), Dr. Stefan Bretthauer, Jia-Xi Liu (both Antitrust Law, Hamburg).

Public Relations
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Background

The new EU regulation on foreign subsidies 2022/2560 ("Foreign Subsidies Regulation" or FSR) has become an important tool of subsidy control since its entry into force. The FSR contains rules that enable the European Commission to address distortions caused by foreign subsidies, and thereby allows the EU to ensure a level playing field for all companies operating in the EU internal market comprising 27 countries, while remaining open to trade with and investment from third countries. The FSR applies to foreign subsidies granted to companies engaging in economic activities in the EU, regardless of their ownership, legal structure or origin, and this to merger and acquisitions as well as participation in public tenders. The rules complement those concerning imports of subsidized goods.

Chinese subsidies were often investigated 

There has been a greater number of cases than expected and the attention has primarily focused on merger and acquisitions. The European Commission expected some 30 notifications in the year 2024 but was dealing within the first 100 days with pre-notification discussions in over 50 M&A cases. The cases examined ranged from mergers within the same Member State to mergers between EU and non-EU countries. The cases came from a wide variety of sectors, ranging from basic industries to fashion retail and high-tech sectors; for instance the planned acquisition of a telecommunication provider's pension fund by a State-controlled actor telecommunications provider domiciled in the United Arab Emirates. 

The Commission highlights the fact that an investment fund was involved as the notifying party in around a third of the cases. (It should be noted that M&A projects may also be subject to EU- or national merger control rules and the screening rules concerning foreign investment in sensible sectors.)

As regards the participation of non-EU companies in public tenders, to date, the Commission has opened: in-depth investigations following public tenders notifications for solar photovoltaic supplies in Romania and electric “push-pull” trains in Bulgaria, ex officio investigations in wind turbine supplies for wind parks in Romania, Greece, Bulgaria, Spain, and France; and security equipment, including a dawn-raid at the producer’s premises in the Netherlands. The Commission decision ordering the inspection in the security equipment case is contested by the company in court.

All but a few of the Commission's in-depth investigations concerned Chinese companies that may have received potential subsidies from China. While the FSR is designed to be country-neutral, as a matter of fact mostly Chinese subsidies were scrutinized, as the Chinese economy is the world's second biggest with Chinese companies investing in the EU and participating in public tenders.

Chinese officials and industry groups have nevertheless repeatedly criticized the EU’s FSR, arguing the regulation is just another protectionist tool created by the EU to target Chinese businesses. In July China's Ministry of Commerce announced that it launched a trade and investment barrier investigation into EU's related practices in its investigations of Chinese enterprises based on the FSR. 

The outcome of the investigations so far is mixed. In some cases, the companies withdrew or modified their projects.  In March 2024, Chinese train maker CRRC withdrew from a EUR 610 million public tender for a Bulgarian railway project, after the EU launched an investigation into the bid under the FSR framework. In other cases, offers were even withdrawn without a formal investigation opened.

Preliminary Clarifications

In a speech in April 2024, Competition Commissioner Margrethe Vestager outlined the direction for the Commission's enforcement efforts and criticised distortions of competition caused by subsidies granted by non-EU countries. She emphasised that in some markets, Chinese companies repeatedly offer significantly lower prices than EU companies, which are allegedly financed by State aid from third countries and often include payment deferrals that are not granted to EU companies. This practice leads to a considerable competitive disadvantage for EU companies, especially in sectors such as solar or wind energy. 

In July 2024 the European Commission published a Staff Working Document providing preliminary guidance concerning the distortion test under the new rules. 

The Commission mentions that in the context of M&A transactions, different standards of review apply under the FSR and under the European Merger Regulation, as the two procedures serve different purposes. Consequently, the two procedures can also lead to different results. 

In the context of public procurement procedures, the Commission's review is however limited to the specific public procurement procedure and the distortion test applied is different for M&A deals than it is for public tenders. The Commission only examines whether the respective public procurement procedure is potentially distorted by the foreign subsidies. Only those third-country subsidies are relevant that enable a specific economic operator to submit a bid that is unjustifiably favourable in relation to the tendered services.

Beyond that nothing new emerges from the clarifications.

Early planning is the key

A major challenge for companies remains obtaining and preparing the right data for an eventual review of their bid. In particular, companies potentially subject to the obligations under the FSR must consider preparing and setting up a comprehensive and complete information gathering process to collect the necessary FSR data on a global and group-wide basis for the last three years at the same time or before launching a bid or participating in a tender. The correct identification of reportable foreign financial contributions, their precise differentiation from those categories that are most likely to distort competition, as well as a prudent interpretation of the exemptions granted, is essential in this context. Legal tech solutions and the early involvement of experts can help.

Outlook for the future

As the FSR consists of a novel legal framework, companies face significant uncertainty in assessing when non-EU subsidies may be problematic. Pending further guidance, it is more likely that certain case characteristics will require detailed questioning or a longer-term review based on EU enforcement practice. 

The establishment of information systems will continue to pose challenges for companies. At this point, we recommend that affected companies plan to collect and organize information at an early stage. We will continue to monitor further developments in the area of FSR and are ready to assist companies concerned. 

Prof. Dr Rainer Bierwagen
Lucas Nowottny

Narrative of the case:

On 23 July 2020 AO Novosibirskkhleboproduct, a Russian company, (the "Supplier") and C. Thywissen GmbH, a German company, (the "Buyer") concluded a contract through a broker for the supply of Russian-grown linseed. The contract was governed by the laws of England and Wales. It included a FOSFA (Federation of Oil, Seeds and Fats Association) arbitration clause with seat in London.

For the purposes of meeting its contractual obligations, the Supplier concluded a contract for the supply of linseeds with the company Dubrovinskoe, which operates in Novosibirsk Region.

Russia’s Novosibirsk Region experienced a drought in summer 2020 On 22 July 2020 the regional government issued Resolution No. 289-P, which declared a state of emergency covering 16 grain-growing municipal districts in the Region.

Due to the poor linseed harvest, the Supplier was unable to supply the linseed to the Buyer. It proposed to the Buyer citing force majeure that the delivery dates shall be deferred. However, the Buyer declined to extend the deadlines for delivery and filed a claim against the Supplier with FOSFA Arbitration. It asked to be compensated for losses in the amount of the difference between the agreed price of delivery and the market price of linseeds at the time of the breach of contract, to a total of USD 600,000.00. However, the Buyer did not actually enter into a replacement transaction.

The arbitral tribunal, whose members were from Ukraine, the United Kingdom, and Denmark, issued an award on 16 November 2022. It granted the Buyer’s relief regarding its claim for the compensation of losses in the amount of USD 600,000.00, with interest. Even though Art. 7 FOSFA Arbitration Rules foresee a proceeding for appeal, the Supplier did not appeal this decision. Thus, the award became binding on 28 December 2022.

The Buyer then initiated proceedings for recognition and enforcement of the award in Russia. The Commercial Court of Novosibirsk Region, decided that the award is recognisable and enforceable in Russia. The Court of Cassation dismissed the Supplier’s appeal and upheld the decision of the Commercial Court of Novosibirsk Region.

The Supplier filed an appeal with the Russian Supreme Court. He claimed that the court orders issued in the case were a breach of the public order of Russia and should be overturned.

The Russian Supreme Court granted the Supplier’s appeal, laying out the following key legal positions:

(a) The recovery of losses cannot be aimed at enrichment in the context of legal defence, but only at the restoration of an infringed right.According to the Russian Supreme Court, it is contrary to public order in Russia to collect funds to compensate for losses without providing evidence that the losses were actually incurred, for example by providing evidence that the party has entered into a replacement transaction.

(b) The courts of the first instance and cassation failed to take into account the "public significance of the Supplier" and the fact that "enforcement of the award risks creating financial instability for the Supplier and would have a material effect on public employment and social stability in the region."

(c) The arbitral tribunal, composed of citizens of "unfriendly countries" , cannot be impartial and objective. "Given there is no evidence to the contrary". The Russian Supreme Court has thus formulated a - questionable - presumption of partiality for any arbitration in which an arbitrator from an unfriendly country is involved. The Russian Supreme Court’s position is based on the position taken by the European Court of Justice in the cases of Kyprianou v Cyprus, case No. 73797/01 and Revtyuk v Russia, case No. 31796/10.

Significance of the New Legal Positions of the Russian Supreme Court

The Russian Supreme Court’s decision and newly developed approaches are currently the subject of lively discussion in the legal community in Russia and in arbitration communities around the world, with reference to both the positive and negative consequences of the approaches that have been developed.

First and foremost, it should be noted that the Russian Supreme Court went far beyond the scope of reviewing the grounds for non-recognition of an arbitral award set forth in Article V of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958). The Russian Supreme Court conducted a review of the merits of the dispute, including a reassessment of evidence in the case as to the existence of losses and occurrence of force majeure.

It should also be noted that the "public significance" of the Russian debtor in the dispute and the possibility of an adverse effect on social stability in the region, if the award were to be recognised and enforced, cannot constitute grounds for refusing to recognise and enforce the award. However, a similar position has been previously taken in the court decisions of commercial courts of various levels, for example, in the judgment of the Commercial Court of Volga-Vyatka District dated 27 December 2021 in case No. A79-9284/2020. With this approach, the Russian Supreme Court essentially negates the purpose of judicial protection of a violated right – to restore the rights of the injured party.

Finally, it is important to comment on the "presumption of partiality" of arbitrators from unfriendly countries as formulated by the Russian Supreme Court.

In the Russian Federation, it is common practice to follow the IBA Guidelines on Conflicts of Interest in International Arbitration and the Rules of the Chamber of Commerce and Industry of the Russian Federation when considering issues relating to the impartiality of arbitrators. Neither document considers citizenship as a reason for disqualifying a person from acting as an arbitrator, nor does it require disclosure of this information to the parties.

At the same time, the provisions of the UNCITRAL Code of Conduct for Arbitrators in International Investment Disputes should be noted. According to Article 3, an arbitrator shall not be influenced by loyalty to a party to the dispute or to any other person or entity, nor shall he take any action which might create an appearance of lack of independence or impartiality. A broad interpretation of these criteria may be considered a reason to doubt an arbitrator's impartiality if the arbitrator has taken a categorical position against one of the countries of domicile of a disputing party. Citizenship of an unfriendly country could be considered to fall under "other circumstances likely to raise doubts as to impartiality". However, in our view, the mere fact of citizenship is not sufficient to support an allegation of lack of impartiality. There must be other evidence of a lack of objectivity and impartiality. Otherwise it would be evidence of discrimination for nationality.

The Russian Supreme Court has formulated a presumption of the lack of impartiality, shifting the burden of proving an arbitrator’s impartiality to the procedural opponent of the Russian party. At the same time, the text of the decision does not contain any examples of evidence that could be used to confirm the impartiality of an arbitrator from an "unfriendly" country. Consequently, in the absence of any guidelines, it seems virtually impossible to provide evidence of an arbitrator’s impartiality (rebuttal of the presumption). In any case, the lack of criteria makes it possible to declare that the presumption of partiality has not been rebutted by admissible evidence, which excludes the possibility of recognising the award in Russia.

In addition, the Russian Supreme Court’s presumption raises several questions. Can an arbitrator from an unfriendly country consider a case administered by a Russian arbitration institution? Should an arbitrator who is to hear a case before the ICAC of the Russian Chamber of Commerce and Industry provide additional evidence to rebut the "presumption of partiality" before starting to hear the case? What are the consequences if a foreign arbitrator is chosen by the Russian party or if the parties to the dispute are all Russian persons or companies? Could that party later invoke the arbitrator’s "partiality", even though the Russian party itself chose the arbitrator? In any event, we will see fewer, if any, arbitrators with the nationality of "unfriendly states" being appointed to arbitration proceedings in the future if a potential award is also to be enforced in Russia.

The Russian Supreme Court’s example should not be followed by the courts in other countries. It’s stance severely damages the internationalism of arbitration.

Dr. Tobias Pörnbacher
Alexander Bezborodov

Commission President

Ursula von der Leyen was re-elected Commission President with 401 votes, more than expected given the result of the elections to the European Parliament in June which changed the composition of the Parliament in many respects.

The newly elected members of the European Parliament met for the first time this week in Strasbourg and among their first tasks was the election of the Commission President. The European Council had already met before and designated the Estonian Prime Minister Kaja Kallas to become the next High Representative for Foreign Affairs and Security Policy and the elected former Portuguese head of government Antonio Costa as President of the European Council.

European Parliament

The European Parliament kicked things off with the election of its own president. With a large majority (562 out of 623 valid votes), MEPs elected the Christian Democrat Roberta Metsola from Malta. The 45-year-old has held the highest office in the EU in terms of protocol since 2022 and has herself been a member of the European Parliament since 2013. The President of the European Parliament presides over all activities of the plenary, gives the floor to speakers, represents the Parliament externally and signs laws. Metsola wants to campaign for a "strong Parliament" and eliminate the "imbalances between the institutions". Metsola is considered a great supporter of Ukraine and during her first term of office, campaigned for a fair distribution of migrants within the EU, which led to the adoption of the Asylum and Migration Pact in 2024.

The European Parliament moreover elected its 14 Vice-Presidents which together with its president drafts Parliament's budget and sets the agenda. Of the 14 positions, six went to the Social Democrats, three to the EPP, two to the ECR and one each to the liberal Renew Group, the Greens and the Left. The more "right-wing" parties, which had hoped for more seats on the Bureau, were disappointed with the outcome.

Future European Commission

On 18 July the eagerly awaited election of the Commission President took place. The European Council nominates the Commission President by qualified majority, whereby, according to the EU Treaty, this must take into account the result of the European elections. In the 2014 European elections, the "Spitzenkandidat principle" was informally agreed between the European parties for the first time, which states that the European Council may only nominate the candidate whose party achieved the best result in the European elections. At that time, the principle was not followed and Ursula von der Leyen was instead elected. She was up for re-election this time.

Not only did Ursula von Leyen have to face the new majority situation in Parliament, but a court ruling on 17 July 2024 also challenged the Commission's decision not to disclose detailed information about the purchase of coronavirus vaccines. The German left-wing lead candidate Fabio di Masi then demanded that Ursula von der Leyen renounce her candidacy. Nevertheless, Ursula von der Leyen was the clear winner in the end. She received 401 votes out of a possible 719. This meant that she not only achieved a better result than in 2019, but also surprised many critics with a clear victory in the first round of voting. In her speech before the election, she pugnaciously emphasized that she wanted to stand by the Ukraine for "as long as necessary" and that her goal is "to build a real European defence". To the surprise of many observers, von der Leyen also spoke out in favour of the approval of e-fuels within the EU for the first time. In her opinion, the political guidelines of the transport regulation should be re-examined. In doing so, she gave way to the conservative parties, who have been calling for this technology for some time now. EPP leader Weber briefly commented on this with the words: "This is the end of the ban on combustion engines after 2035".

As part of her organizational powers, the Commission President directs the work of the Commission and convenes the meetings of the College of Commissioners. The President decides on the areas of responsibility of the Commissioners, which she can also reassign during her term of office. Certain restrictions apply to the High Representative of the Union for Foreign Affairs and Security Policy.

The other members of the European Commission will be selected within the next weeks by its President and needs to be confirmed by the Parliament and accepted by the 27 Member States. The Commission President’s discretion in the selection of the Commissioners and their portfolios is somehow limited by the influence of the Member States. The number of Commissioners is generally set at one Commissioner per country. The High Representative for Foreign Affairs and Security Policy is nominated by the European Council, while the other Commissioners are proposed by the national governments of the Member States and nominated by the Council of the European Union by qualified majority. Although the President of the Commission can object to the appointment of a Commissioner, the proposals of the governments are normally discussed beforehand with the country concerned. The Commissioners usually come from the parties that form the governments in their respective countries. The European Parliament questions the candidates individually and issues an opinion in which it can approve or reject the Commission as a whole. After approval by the Parliament, the Commission is appointed by the European Council by qualified majority.

The next few days will show how the positions within the Commission will be distributed. As mentioned, the Estonian Prime Minister Kaia Kallas, who was nominated by the European Council on 28 June 2024, is set to become the EU's foreign policy chief. She is a member of the liberal ReNew Europe group and represents a tough foreign policy stance towards Russia. Virginijus Sinkevicius (Greens/EFA), Janusz Wojciechowski (ERK) and Adina Valean (EPP) will definitely no longer be part of the Commission, as they are all leaving their positions for various reasons. In the course of the new composition of the Parliament, the areas of agriculture, transport and the environment in particular will receive new Commissioners.

Another top EU position was already awarded to the former Portuguese head of government and Social Democrat Antonio Costa. His term of office is two and a half years, but it is customary for a second term to follow.

The defining issues of the next legislative period will be migration, European defense, Ukraine and the Green Deal. The progressive Green Deal program in particular will face major challenges due to the Greens' loss of votes and the strengthening of right-wing parties. It remains to be seen how the future Commission will react to this.

Prof Dr Rainer Bierwagen
Dr Dietmar Reich
Christian Hipp
Gábor Bàthory

Therefore, the European Commission's first overhaul of its Notice on the definition of the relevant market in over twenty-five years had been eagerly awaited among competition law practitioners and beyond. The Commission finally published it on 22 February 2024. In the following, we present both the Commission's revised Notice and its very first applications by the French Competition Authority, the European Court of Justice and the Commission itself.

The Bible of Market Definition

While the revised Market Definition Notice may convey the impression of being a modest administrative document by the European Commission, it is in fact the bible of market definition across Europe. The original Notice had been a point of reference for authorities and courts both at the EU and at the national level since its publication in 1997. The revised Notice is the result of a close cooperation between the Commission and national competition authorities in the EU, and reflects input received from further stakeholders.

Evolution, not Revolution

It is therefore no surprise that the French Competition Authority used the revised Market Definition Notice less than three months after its publication when issuing a cartel fine decision against eleven companies on 21 May 2024. Regarding the pre-cast concrete products at stake, the Authority recalls that the relevant product market comprises all those products that customers regard as interchangeable or substitutable, and that the relevant geographic market comprises the geographic area in which, inter alia, the conditions of competition are sufficiently homogeneous. These basic principles remain largely unchanged in the revised Notice compared to the previous Notice.

Price Isn't Everything

However, there are also significant changes compared to the previous version. Such a change is the recognition by the Commission of “extra-economic" competition parameters when defining the relevant product market. This is a real innovation as compared to the previous Notice which focused on price to define the market. Under the revised Market Definition Notice, the Commission considers non-price parameters such as the degree of innovation of the product, its quality, the image it conveys or even its sustainability are relevant parameters to define the market. Far from simply clarifying the concepts covered by the previous Notice, the revised Notice also provides additional guidance relating to specific types of markets:

New Tools for New Markets: Pipeline Products

The Commission notes that innovation and related R&D investment have become a key parameter in many sectors, such as high-tech and pharmaceuticals. To capture new product markets ahead of the marketing stage, the Commission now reserves the right to include “pipeline products” in its competition assessment among a new product market or a pre-existing one. This perception has major consequences, particularly for merger control, where merging companies will have to increasingly consider ongoing development projects as potential substitutes of existing products.

New Tools for New Markets: Multi-Sided Platforms

The revised Market Definition Notice also addresses multi-sided platforms (such as online marketplaces and social media), where demand from one group of users can affect demand from one or more other groups (buyers, advertisers, for example), so-called “indirect network effects”. The revised Notice provides new guidance by explicitly stating that multi-sided markets can be defined either as a whole, thus encompassing the different groups of users concerned, or as separate markets, depending on the facts of the case.
These principles of the revised Notice were used by Advocate General Collins in its opinion of 6 June 2024 when defining the market on which Booking.com is active. In his opinion, he views Booking.com as a provider of online intermediation services to hotels, thereby assuming separate markets for the two sides of the market.

New Tools for New Markets: Ecosystems

The Commission also recognizes the specificities of after-markets, bundles and digital ecosystems, where the consumption of a primary product leads to the consumption of a secondary product. According to the revised Market Definition Notice, it is appropriate to define these markets either as a single market encompassing primary and secondary products, or as separate markets (multiple markets or dual markets).

The Commission applied these rules when authorizing the establishment of a joint venture for smart farming products on 25 March 2024. The Commission's investigation revealed significant substitutability between the individual products (displays, receivers etc.) on the one hand and guidance systems on the other hand. Namely, the individual components can be easily assembled to create a combined system, and several integrators are actively engaged in such bundling. The Commission hence assumed a single system market.

New Market Share Metrics

Another key contribution of the revised Market Definition Notice is the possibility explicitly offered by the European Commission to calculate companies' market shares based on metrics other than their sales revenues or sales volumes. From now on, the Commission may also use benchmarks such as the number of suppliers, the number of visits/views/downloads or even R&D expenditures to measure companies' market shares. This additional flexibility is particularly relevant for the digital sector, the pharma sector and nascent markets in general.

Conclusion

The revised Notice embraces the societal transformations induced by digitization and the increasing importance of sustainability factors. Furthermore, we can only welcome with satisfaction the Commission's advice on delineating the relevant market in settings such as two-sided markets or product bundles. The first use cases of the revised Notice already show that its innovations are very relevant for the decision-making practice of competition authorities.

However, one point raises concerns for legal certainty: The Commission emphasizes in its revised Notice that it will not be bound by its precedents. This statement raises fears that the Commission may overrule previous market definitions depending on alleged market developments or on the specific competition parameter concerned. As a result, the additional legal certainty that should be provided by a definition of relevant markets becomes dangerously fragile.

Still, the revised Market Definition Notice promises to be a milestone in the evolution of EU competition law over the coming years. It therefore deserves to be reviewed carefully.

Christoph Heinrich
Lucie Giret (ADVANT Altana)
Francesco Mazzocchi (ADVANT Nctm)

TETEC AG, which specialises in regenerative medicine, had been integrated into the international medical technology group B. Braun through the surgical division Aesculap, based in Tuttlingen, Germany. In future, Aesculap will strategically focus even more strongly on innovative medical technology relating to surgical processes in the operating room, which means that the regenerative medicine business segment no longer fits into the medical technology group's portfolio.

In the United States, B. Braun has partnered with Octane Medical for more than ten years. With the completion of the transaction, the Canadian specialist for regenerative medicine has taken over TETEC completely, including the approximately 160 highly specialised employees at the site in Reutlingen, Germany.

Octane is a global group of companies headquartered in Ontario, Canada, with subsidiaries in the United States and Europe, specialising in innovative processes, biomaterials and bioreactors for regenerative medicine. Part of the group are Octane Clinical Systems, Octane Orthobiologics, Octane Exo, Octane Biotech and Octane Biotherapeutics (BioTx).

B. Braun is one of the world's leading medical technology companies. With over 60,000 employees, B. Braun is a reliable partner that develops intelligent solutions and sets pioneering standards to accelerate progress in healthcare.

Advisors to Aesculap AG:
ADVANT Beiten: Dr Sebastian Weller (lead partner), Nico Frielinghaus, Dr Winfried Richardt, Markus Schönherr, Sarah Heinrichs, Simon Litterst (all Corporate/M&A), Christian Schenk, Markus Linnartz (both Tax), Thomas Herten (Real Estate), Christian Döpke (Data Protection Law, all Dusseldorf), Dr Erik Schmid (Labour Law), Christoph Heinrich (Antitrust Law, both Munich), Rainer Süßmann (Banking & Finance, Frankfurt), Dr Christian von Wistinghausen, Lelu Li (both Foreign Trade Law, Berlin).

Advisor to Octane Medical:
Osborne Clarke

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Sebastian Weller
Rechtsanwalt
ADVANT Beiten
+49 (211) 51 89 89 - 134
sebastian.weller@advant-beiten.com

Damages from cartel fines and cartel damages claims

If hardcore cartel infringements lead to fining procedures, companies can face significant fines of up to ten percent of the worldwide group turnover. Fines in the hundreds of millions or even billions are therefore almost commonplace. Once fining procedures conclude, further danger looms. Companies that have suffered damage as a result of the infringement can claim compensation for that damage. Cartel damages claims do not have any upper limit, the participants in the cartel are joint and severally liable, and interest applies from the time the damage first occurred. In practice, cartel damages claims often significantly exceed the fines imposed.

Recourse from board members and managing directors who participated in the cartel?

In such cases, companies regularly face the question of whether they can – or even must - seek recourse personally from board members or managing directors that participated in the cartel infringement or breached their supervisory duties for the damages caused by the fines against the company or even for cartel damages claims. In line with the “ARAG Garmenbeck” case, the supervisory board of a stock corporation must independently examine whether cartel damages claims against the company can be enforced against directors. If the supervisory board concludes that the company has enforceable damages claims, the board must pursue these claims unless there are strong reasons in the interests of the company not to do so. Indeed, the personal assets of board members will often not be sufficient to offset the damages caused. However, D&O insurance and the D&O insurer can reduce any liability gap.

For a claim against managing directors and board members and, indirectly, against their D&O insurers to be successful, the board must be personally liable for any antitrust fines imposed on and cartel damages claims awarded against their company. This is a matter of some debate in Germany, and the highest courts have not yet decided the issue. The courts of first instance have had differing views on this issue: the District Courts in Düsseldorf (railway track cartel), Saarbrucken (sanitary cartel) and Düsseldorf (stainless steel) objected to directors being personally liable for antitrust fines against companies. Meanwhile, in an indicative ruling (Hinweisbeschluss), the District Court in Dortmund (railway track cartel) took a different view.

Judgment of the Higher Regional Court in Düsseldorf of 27 July 2023

In its judgment of 27 July 2023, the Higher Regional Court (Oberlandesgericht, OLG) in Düsseldorf confirmed the lower court judgment and – like the District Court in Düsseldorf – held that recourse could not be sought for antitrust fines against companies. Essentially, a company must pay any fine against it to fulfil the fine's preventative purpose. If companies could pass fines on to managing directors and board members, companies could escape their legal responsibility for cartel infringements in the form of fines. The OLG Düsseldorf also rejected the possibility for companies to seek recourse for their fact-finding and defence costs due to the close practical link these costs had to the fines on the company. In contrast, the Court confirmed that managing directors and board members could be found personally liable for damages caused to the company by compensation payments to parties injured by the cartel.

The OLG Düsseldorf has allowed the appeal, paving the way for the German Federal Court of Justice (Bundesgerichtshof, BGH) to clarify this controversial issue of law.

Comments and practical tip

The judgment of the OLG Düsseldorf is persuasive only in certain aspects. If members of company organs were to be found personal liable, it would contradict the preventative purpose of fining companies under antitrust law and is therefore ruled out. In contrast, the position of the OLG Düsseldorf on the ability to seek recourse from directors and board members for damages suffered by a company for compensation paid for cartel damages is not convincing. The Court overlooks the special nature of cartel damages claims law - influenced by EU law. In enacting § 33a of the Act Against Restraints of Competition (GWB), German legislators created an “effective system of civil law sanctions” with “significant deterrent effect,” also to implement EU antitrust law. Subsequently, the BGH recognised the preventative purpose of cartel damages claims and even held that this purpose takes priority over compensation considerations (rail train cartel IV). Accordingly, cartel damages claims and antitrust fines must have the same treatment: both serve preventative purposes. This preventative purpose would not be served if the fine and/or settlement could be shifted to a managing director or board member.

The practical importance of this legal question is significant. Directly at stake is the obligation to assess whether recourse can be sought from board members and, where the chances of success are favourable, to pursue these claims. Indirectly, it affects not “only” whether such risks can be insured, but also the possibility to grant amnesty to board members in order to ensure their cooperation within the framework of the leniency programme. This is particularly important under antitrust law and in practice. It also affects the possible binding effect of the fining decision in regress litigation and the relationship between recourse claims and direct claims against board members for fines under administrative law (§§ 9 and 130 of the Act on Regulatory Offences, OWiG) or compensation (§ 826 Civil Code, BGB).

Moreover, the question of whether recourse can be sought from board members for fines against companies arises not only in antitrust law but also, for example, under data protection law, the Act on Due Diligence in the Supply Chain and capital markets law.

Regardless of how the BGH finally answers this question: managing directors and board members will avoid liability risks if they comply with their compliance obligations and can provide evidence of this – often years later – through careful documentation. If a director or officer has not breached their duties, the company will have no grounds to seek recourse from them, even if the BGH affirms that companies can generally seek recourse for fines and compensation payments.

Dr Christian Heinichen
Dr Moritz Jenne

With Spandau Pumpen, SKF disposes of extremely competitive screw-type and seal-less coolant pumps with a valuable customer base mainly in the European market. Through the acquisition, EBARA aims to enter the global market for machine tools and filter systems and will expand its portfolio by providing new products and services.

EBARA will take over the customer base and certain assets of Spandau Pumpen, will relocate the production to one of its plants in Italy and will work on the expansion of its business. EBARA Corporation has committed itself to achieve several UN Sustainable Development Goals (SDGs) in order to create added business value and to reinforce its reputation as an excellent global player.

The global development of new markets through acquisitions and integration of value-added products are a central element of EBARA's strategy. Further investments are planned in the field of M&A.

Advisor to EBARA Pumps Europe:
ADVANT Beiten: Dr Markus Ley and Moritz Kopp (both in charge, Corporate/M&A), Christian Hess (IP/IT), Dr Erik Schmid, Regina Dietel (both Labour Law), Christoph Heinrich, Cathleen Laitenberger (both Antitrust Law) and Maximilian Matusewicz (Corporate/M&A, all Munich).

Public Relations
Frauke Reuther
Communication
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Markus Ley
Rechtsanwalt (Lawyer)
ADVANT Beiten
+49 (89) 3 50 65 - 1211
markus.ley@advant-beiten.com

For Laumann Group, the acquisition marks the entry into the aluminium segment. Ponzio will be positioned as an independent business unit within Laumann Group. The goal of this integration is for Laumann Group and Ponzio Polska to jointly continue Ponzio Polska's growth path in the existing markets and beyond.

Ponzio Polska is a leading manufacturer of aluminium profile systems for the building industry with a strong footprint in Poland and other major European markets. The company employs over 300 people.

Laumann Group, a family-owned group with headquarters in Sendenhorst in the Northwest of Germany, is a leading provider of building-related product solutions and IT-services. The company employs over 7,200 employees in over 50 locations on four continents with an annual revenue of approximately EUR 1.9bn.

ADVANT Beiten had already advised Laumann Group on the acquisition of Vinylit Fassaden GmbH in 2021. Laumann Group also includes VEKA AG, a long-standing client of the law firm.

Advisors to Laumann:
ADVANT Beiten: Christoph Heinrich, Cathleen Laitenberger (both Antitrust Law, Munich), Dr Sebastian Weller, Nico Frielinghaus (both M&A/Corporate, Dusseldorf).
Other advisors: JDP (Poland), Sorainen (Lithuania)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Christoph Heinrich
Rechtsanwalt
ADVANT Beiten
+49 89 35065-1342
Christoph.Heinrich@advant-beiten.com

The railway depot is centrally located in the Ruhr metropolis, is developed with listed buildings and has two sidings to the network of Deutsche Bahn. It is therefore attractive for commercial development and the RVR had several direct enquiries. The sale was concluded in a competition-like, transparent selection procedure which had been advertised EU-wide. Award criteria were defined in the course of the tender.

The multinational group CAF is a leading provider in the railway sector and has acquired the property in its entirety in order to develop it for its own purposes as of 2023. At the site in Gelsenkirchen, CAF will be servicing in the near future its modern, battery-powered regional train sets for local transport in the region for the first time which will replace old diesel vehicles.

ADVANT Beiten designed and advised on the state aid and real estate law part of the transaction and the Europe-wide selection procedure and conducted the sales negotiations with the bidders.

Advisor to RVR:
ADVANT Beiten: Dr Dietmar O. Reich (Hamburg/Brussels), Christian Hipp (Berlin, both State Aid Law), Dr Klaus Kemen (Berlin, Real Estate).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr Klaus Kemen
Rechtsanwalt
ADVANT Beiten
+49 (30) 26 471 - 133
klaus.kemen@advant-beiten.com

Based on proprietary platform technologies, Ethris has been developing mRNA therapeutics for diseases with inadequate treatment and for regenerative medicine for more than 10 years. The biotechnology company develops highly effective mRNA-based drugs for administration directly into the upper and lower respiratory tract and by intra-muscular injection.

Cipla is India's third-largest pharmaceutical company and South Africa's third-largest generic drug manufacturer. It has a particular focus on drugs and therapies for respiratory diseases. Cipla became internationally known for its production of low-cost HIV medicines. Founded in 1935, Cipla employs about 23,000 people.

ADVANT Beiten has a strong positioning in the healthcare sector and in advising international clients on investments in the German market.

Advisor Cipla Ltd.:
ADVANT Beiten: Christian Hipp (Antitrust), Benjamin Knorr (Corporate/M&A and Tax, both leading advisors, Berlin), Dr Dietmar O. Reich (Antitrust, Hamburg and Brussels), Wolf J. Reuter (Employment, Berlin), Robert Schmid(Corporate/M&A, Berlin), Dr Christian Ulrich Wolf (Corporate/M&A, Hamburg), Christian Hess (IP/IT, Munich).

Advisor Ethris GmbH:
m law group. Munich

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Benjamin Knorr
Rechtsanwalt
ADVANT Beiten
+49 (30) 26471 – 262
benjamin.knorr@advant-beiten.com

The Terreal businesses to be acquired by Wienerberger are expected to generate revenues of EUR 740 million and a run-rate EBITDA of approx. EUR 100 million in 2022. The enterprise value of the respective Terreal businesses amounts to EUR 600 million, subject to customary adjustments. The acquisition agreement was signed at the end of December, marking the start of the exclusive negotiation phase. The closing is expected to occur in the course of 2023.

The merger control part of the transaction is led by ADVANT Beiten partners Uwe Wellmann and Christoph Heinrich who are jointly responsible for German merger control and coordinate a team of law firms in various jurisdictions. Cross-border merger control advice is provided in cooperation with, inter alia, ADVANT Altana in France, Binder Grösswang in Austria, Woźniak Legal in Poland and Radovanović Stojanović & Partners in Southeastern Europe.

The M&A work stream was led by E+H (Vienna, Graz). ADVANT Beiten partner Dr. Mario Weichel took over its German part and together with a multidisciplinary team performed the legal due diligence on the Creaton business. ADVANT Altana was responsible for the French due diligence.

Advisers to Wienerberger:
ADVANT Beiten: Uwe Wellmann (Berlin) and Christoph Heinrich (both lead partners, both Competition law), Dr Mario Weichel, Maximilian Matusewicz (both Corporate/M&A), Cathleen Laitenberger (Competition Law), Anja Fischer (Real Estate), Katrin Lüdtke and Philipp Früh (both Public Law), Christian Hess (IP), Michael Ziegler and Petra Fendt (Finance), Chiara Peterhammer (Commercial, all Munich), Nima Valadkhani (Commercial), Wolf J. Reuter (Employment Law) and Dr Ariane Loof (Data Protection, all Berlin).

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Uwe Wellmann
Lawyer
ADVANT Beiten
+49 30 26471-243
uwe.wellmann@advant-beiten.com

Exporters in third countries and importers have to start preparing for the EU Carbon Border Adjustment Mechanism (CBAM). Companies importing iron, steel, cement, aluminium, fertilizers and electricity will be obliged to purchase so-called CBAM-certificates and pay the difference between the carbon price paid in the country of production and the price of carbon allowances in the EU ETS. Producers in third countries will be required to provide information concerning their emissions.

In detail:
Reducing greenhouse gas emissions is no easy Sunday afternoon walk and going alone only renders it more complicated. Even though a provisional deal for joint action on EU-level has now been reached, questions remain: Can the EU implement a WTO compatible CBAM? Additionally, will the EU achieve its objective if the CBAM does not survive multilateral criticism?

CBAM and the European Green Deal

Three years ago, in 2019, the European Union has set reaching carbon neutrality by 2050 as necessary and attainable objective, delivering on the commitments under the Paris Agreement. The European Green Deal is the overarching strategy, to be implemented by more than fifteen new laws or changes to existing legisla-tion, the so-called "Fit for 55" package. The goal is to reduce net greenhouse gas emissions by at least 55 % by 2030, compared to 1990 levels.

The "Fit for 55" package¹ foresees establishing the CBAM together with changes to the current EU Emissions Trading System (ETS). The CBAM should equalize the carbon price between domestic and foreign products.

In accordance with the applicable legislative procedure, the European Commission put forward a draft which is concurrently discussed by the European Parliament (EP) and the 27 Member States in the Council². The draft was welcomed by the EP's Environment, Public Health and Food Safety Committee (ENVI) but the EP rejected the proposal as not ambitious enough. Over several months, the EP and the Council negotiated a compromise version that was tentatively agreed in December 2022³.

Current situation: EU only reduction efforts

The EU has an Emissions Trading System (ETS) for more than fifteen years and CBAM is designed to function in parallel with this system, complementing it for imported goods.

The ETS puts a cap on the amount of greenhouse gases companies are allowed emit. Within the cap it is possible to buy emission allowances that can be traded with. Some of the allowances are auctioned, however, the rest of the allowances are given for free by the European Commission to certain sectors at risk of carbon leakage.

Carbon leakage refers to the problem of companies relocating their production offshore, to countries with fewer environmental protection. CBAM addresses this issue, i.e. that the greenhouse gas emissions reduction efforts of the EU are offset by increasing emissions outside its borders through relocation of production to non-EU countries (where policies applied to fight climate change are less ambitious than those of the EU) or increased imports of carbon-intensive products.

The EU accounts for some 8 percent of carbon dioxide emissions (without counting the emissions created by imports). It would be counterproductive and against the objective of the Paris Agreement to decrease emissions in the EU while importing more carbon-intensive products.

Future situation: Offsetting "imported" emissions

Under the CBAM, carbon pricing is done through the instrument of CBAM-certificates, similar to ETS certificates. "CBAM certificate" means a certificate in electronic format corresponding to one ton of embedded emissions in goods. Importers of certain energy-intensive goods have to buy CBAM-certificates in order to be allowed to import those goods into the EU. The required number of CBAM-certificates corresponds to the total embedded emissions of the imported goods.

The goods concerned are enumerated and are in the beginning limited to the most carbon-intensive sectors: iron and steel, cement, fertilisers, aluminium, electricity, and hydrogen, as well as some precursors and a limited number of downstream products. Indirect emissions would also be included in the regulation in a well-circumscribed manner. The EP wanted to be more ambitious and had to compromise while the Council compromised on some indirect emissions.

Over time, the free emission allowances to some EU producers under the ETS would gradually be phased out and the product scope of the ETS and CBAM would converge.

In the beginning, as of October 2023, CBAM would start with reporting obligations before requiring the purchase of certificates. Companies would need to register as "declarants" with the EU, to be able to import products covered by the CBAM. Declarants would need to submit annual declarations of their emissions to the national competent authorities of the Member States, from whom they would need to purchase certificates, reflecting the embedded emissions of the products they imported over the previous year.

The original plan was to phase out the free ETS allocations and end free allocations all together in 2035 and the CBAM to come into effect in January 2023, with a transition period until the end of 2026. The phasing in of CBAM will now take longer.

WTO compatibility and economic consequences

Plenty initiatives have been launched to tackle global warming, but manifold obstacles have remained in their way to realization, ranging from geopolitical circumstances to considerations of unilateral advantages. Suffice to say that a "G7 Carbon Club" was talked about but not even followed up, much less creating a single global emissions price.

As regards the economic consequences in the EU, the emissions-intensive industry considers that the lack of relief of the ETS burden for exports with the simultaneous expiry of the free allocation of certificates leads to imbalance and the increased risk of relocation of industries. While EU-based manufacturers of emission-intensive raw materials would be protected from imports originating in countries with lower carbon dioxide prices, the export of emission-intensive raw materials from the Union would hardly be economically viable, as the production costs would no longer be competitive in international comparison without free allocation of allowances.

With respect to political considerations, several countries have already voiced their concerns, ranging from CBAM violating trade agreements to decrying it as blatant protectionism. Brazil, South Africa, India and China have stressed the negative implications for developing countries.

In particular, many concerns have been voiced about the compatibility of CBAM with international law. However, a CBAM compatible with the General Agreement on Tariffs and Trade (GATT) is not per se impossible and could be justified on environmental grounds. The GATT compatibility of the CBAM depends mostly on its design and application; at the time of writing the December compromise draft was not yet published and may not reflect the ultimately adopted text. It could qualify as a border adjustable internal measure under GATT Article III or, if found to be discriminatory, could be justified under the general exceptions of GATT Article XX, relating to the conservation of exhaustible natural resources (GATT Article XX(g)) or necessity to protect human, animal or plant life or health (GATT Article XX (b)).

Under EU law, the legal basis of the CBAM is Article 192 para. 1 of the Treaty on the Functioning of the EU (TFEU), which allows the Union to take action in order to achieve to the environmental and climate objectives specified in Article 191 para.1 TFEU.

The adoption and implementation of CBAM will most likely result in legal chal-lenges in the EU and by third countries. We live in interesting times.

Prof. Dr Rainer Bierwagen
Gábor Báthory

¹ See European Commission, COM/2021/550, 14 July 2021.
² References: COM(2021) 564 final and 2021/0214 (COD).
³ See Council, Press release 1092/22, 18 December 2022.

Dr Kathrin Bürger, Dr Silke Dulle, Christina Kamppeter, Susanne Klein, Dr Ralf Hafner, Dr Georg Tolksdorf and Dr Sebastian Weller represent five different legal areas and are spread across five locations.

• Dr Kathrin Bürger (Labour Law, Frankfurt and München), Licensed Specialist for Labour Law, advises particularly on collective labour law issues. She assists companies with collective bargaining changes and (in-house) collective bargaining negotiations as well as strike preparation measures. Beyond that, Dr Bürger advises companies on the negotiation with works councils, also as a part of conciliation boards, as well as on all kinds of individual labour law issues.
• Dr Silke Dulle (Corporate/M&A, Berlin), Licensed Specialist for Medical Law, provides legal advice to clients of the healthcare sector, especially in the area of hospitals and health insurance companies. Her legal consultancy covers hospital law, social security and pharmaceutical law, procurement law and corporate law.
• Christina Kamppeter (Labour Law, Munich), Licensed Specialist for Labour Law, advises national and international companies on all aspects of individual and collective labour law, in particular regarding negotiations with works councils and trade unions. One focus of her work is on providing labour law advice on restructurings.
• Susanne Klein (IP/IT/Media, Frankfurt), Licensed Specialist for Information Technology Law, is a renowned expert in data protection law. In addition, she advises her national and international clients in IT and copyright law.
• Dr Ralf Hafner (Litigation & Dispute Resolution, Munich), advises his national and international clients in complex international disputes on dispute resolution out of court and represents them in arbitration and state court proceedings.
• Dr Georg Tolksdorf (Assets/Succession/Foundations, Hamburg) provides legal advice in the area of inheritance and foundation law as well as (tax-optimized) succession planning for private individuals and (family-owned) companies. Another focus of his work is on the execution of (corporate) wills.
• Dr Sebastian Weller (Corporate/M&A, Dusseldorf) focuses on Corporate/M&A as well as Private Equity/Venture Capital, particularly providing legal advice for take-overs, participations and restructuring projects. He provides support on all issues relating to corporate and transformation law as well as corporate compliance.

In addition to the seven new Equity Partners, the following Salary Partners have been appointed Local Partners:

• Dr Anne Dziuba, Labour Law, Munich
• Dr Daniel Fischer, Real Estate, Frankfurt
• Dr Christina Hackbarth, IP/IT/Media, Munich
• Christian Hipp, Antitrust Law, Berlin
• Tanja Hogh Holub, IP/IT/Media, Munich
• Sylvia Jenoh, Tax, Frankfurt
• Dr Klaus Kemen, Real Estate, Berlin
• Dr Markus Ley, Corporate/M&A, Berlin
• Jörn Manhart, Labour Law, Dusseldorf
• Carsten Pütger, Corporate/M&A, Dusseldorf
• Dr Jochen Reuter, Real Estate, Frankfurt
• Dr Winfried Richardt, Corporate/M&A, Dusseldorf
• Dr Florian Weichselgärtner, Dispute Resolution, Munich
• Mathias Zimmer-Goertz, IP/IT/Media, Dusseldorf

Furthermore, the following colleagues successfully continue their career path and have been appointed from  Senior Associates to Salary Partners:

• Annalena Benz, Real Estate, Munich
• Jens Ledermann, Tax, Frankfurt
• Dr Martina Schlamp, Labour Law, Munich

Beyond growth from its own ranks, ADVANT Beiten also continues its course of targeted growth with lateral hires in selected areas and confirms the salary partnership of the following colleagues:

• Christian Burmeister, Corporate/M&A, Freiburg/Berlin
• Dr Moritz Jenne, Corporate/M&A, Freiburg
• Dr Sebastian Kroll, Labour Law, Munich
• Markus P. Linnartz, Tax, Dusseldorf
• Dr Ariane Loof, Labour Law, Berlin
• Dr Michael Matthiessen, Labour Law, Berlin
• Dr Birgit Münchbach, Corporate/M&A, Freiburg
• Kristin Müller-Nedebock, Tax, Hamburg

"All seniority levels are of central importance for the future of our law firm. We are therefore all the more pleased to be able to accompany so many colleagues of different seniority levels, legal areas and locations on their career paths, comments Philipp Cotta, Managing Partner of ADVANT Beiten, and adds: Our modified career track offers all colleagues even more flexibility in their individual career planning and allows us to emphasise our professional expertise across the different levels even more clearly to our clients."

Congratulations to all elected and confirmed partners.

The ruling continues the series of judicial review of the Commission's recent practice of considering tax advantages as aid. On this matter see

• (German) Luxembourg Court upholds Commission's line on targeting selective tax benefits as aid, September 24, 2019,
• (German) Combating tax evasion by looking at the Apple Ireland case, July 15, 2020,
• (German) Legal but unfair? The road to greater tax justice via state aid law remains rocky, May 17, 2021,

The background to the current appeal decision of the ECJ is the adaption of a tax ruling by Luxembourg tax authorities in favuor of FFT. The European Commission determined in its decision of October 21, 2015 that the tax ruling constituted state aid incompatible with the internal market within the meaning of Article 107 TFEU and in violation of the implementation prohibition under Article 108 (3) TFEU. In its judgment of September 24, 2019, the EGC confirmed the Commission decision. However, FFT now successfully sought the annulment of this judgment and the annulment of the Commission decision.

In its decision, the ECJ once again emphasized that a national measure constitutes State aid under four conditions: First, the measure must originate from a State or use State resources. Second, the measure must be found to affect trade between Member States. Third, the beneficiary must obtain a selective advantage through the measure, and fourth, it must distort or threaten to distort competition.

For the third condition relating to selective advantage, it is the Commission's task to first determine the relevant reference system. Given the fiscal autonomy of the Member States, this is to be understood as the tax regulations under national law. The Commission must then show that the measure in question derogates from the reference system by distinguishing between economic operators who are in a comparable factual and legal situation with regard to the objective pursued by the reference system. It must also show that this distinction cannot be justified by the nature or general scheme of the reference system.

Advocate General Pikamäe found that the Commission decision and the judgment of the EGC were lawful, but the ECJ did not agree with this view. It ruled that the Commission had erred in its examination by applying an incorrect arm's length principle outside the concretely applicable Luxembourg tax law.

On the one hand, the ECJ confirms the Commission's approach against selective tax advantages as State aid; on the other hand, the ruling shows that the ECJ examines the reasoning of the European Commission as well as of the EGC with meticulous care. The determination of a tax advantage as State aid may have become more difficult in cases comparable to the Fiat case, but it cannot be ruled out.

Prof. Dr Rainer Bierwagen
Dr Dietmar O. Reich

"Where the market structure stands in the way of competition, for example because there are only a few suppliers in the market and parallel price developments are regularly observed to the detriment of consumers, the intervention instruments of antitrust law are to be strengthened."

Accordingly, the Federal Cartel Office (FCO) is to be given powers equivalent to those of a regulator to intervene in market and corporate structures even even with regard to companies which have neither committed a cartel infringement nor are planning a merger and have not behaved in an abusive manner - a paradigm shift in antitrust law, where the cost-by-cause principle previously applied.

According to the draft bill the FCO is to be strengthened in 3 areas:

• in conducting sector inquiries and imposition of measures thereafter,
• in the enforcement of the Digital Market Act and
• in the disgorgement of advantages.

The first hearings on the draft are going to take place as early as October so that a speedy legislative process and adoption before the end of this year can be expected. The fact that the next, 12th amendment to the Act against Restraint of Competition (ARC) has already been announced by the BMWK for next year also speaks in favour of a quick adoption. Thus, almost 1.5 years after the 10th ARC amendment came into force, two further amendments are already in the pipeline of the Ministry.

Details of the proposed 11th ARC amendment:

I. Follow-up and streamlining measures to the sector inquiry

With the instrument of sector inquiries the FCO investigates and analyses the structures and conditions of competition in specific sectors of the economy. These market studies are not based on the suspicion of a cartel infringement and are not directed against individual companies. Rather, it is a procedure for gaining knowledge with the possibility of subsequently carrying out cartel proceedings against specific companies on the basis of possible antitrust infringements. The FCO is, for example, currently conducting such investigation in the fuel markets.

The draft bill provides for a strengthening of these inquiries. In the future the FCO will be able to order measures and remedies following a sector inquiry (which may now only take a maximum of 18 months) without having established a specific infringement of the law by a market participant. The only prerequisite for ordering remedies is that the FCO has identified a significant, lasting or repeated disturbance of competition on at least one market or across markets. The remedies that follow can be behavioural and structural, with non-abuse unbundling (widely called for on both sides of the Atlantic) provided for as an ultima ratio. The draft provides, inter alia, for measures relating to:

1. granting access to data, interfaces, networks or other facilities,
2. supplying other companies, including the granting of rights to use intellectual property,
3. official or comparable approvals or permits,
4. the supply relationships between undertakings on the markets concerned and at different market levels,
5. common norms and standards,
6. the organisational separation of company or business divisions.

It shall also be possible for the FCO to impose requirements on certain types of contracts or contractual arrangements including contractual provisions on the disclosure of information. This catalogue is not exhaustive, so that all measures necessary for restoring effective competition are in principle to be available to the FCO. With the exception of unbundling , the measures are not ranked in a specific order so that considerable legal uncertainty for companies which comply with (cartel) law can be expected. This applies all the more as the draft does not specify against whom the measures are to be directed. The only criterion so far is the necessity of the specific measure for the elimination or reduction of the distortion of competition - an indeterminate legal concept that requires considerable further clarification of both, courts and authorities.

II. Extension of the FCO's powers to enforce the Digital Market Act and Private Enforcement

Originally, a similar and equally far-reaching regulatory instrument was envisaged for the European Commission at a European level ("New Competition Tool"). This proposal ultimately gave way to the Digital Markets Act ("DMA").

The DMA, which will come into force on 1 November 2022, is a European regulation designed to ensure that digital markets where gatekeepers (i.e. companies that control market access for others due to their market power and network effects) are and remain contestable, i.e. that other market players can exert competitive pressure on these gatekeepers, and to ensure fairness and a level playing field for players in digital markets in the EU.

The draft bill on the 11th amendment to the ARC provides that in the future the FCO may investigate possible infringements of the DMA and for this purpose also make use of the investigative powers available to it in the event of suspected infringements of antitrust law. This will enable the FCO on the one hand to support the European Commission in enforcing the DMA and on the other hand to generate synergies for the enforcement of national supervision of gatekeepers, which is regulated in section 19a ARC.

Since the DMA is to be enforced not only by public authorities but also by private parties (by means of actions for injunctive relief and damages) (private enforcement), according to the draft bill, the simplifications that have so far applied to antitrust damages actions will in the future also apply to claims for the enforcement of rights and obligations under the DMA - undoubtedly an advantage for Germany as a place of jurisdiction and a new danger for companies that are addressees of the DMA.

III. Reduction of the requirements for the levy of benefits

Courts and authorities have so far hardly ever ordered disgorgement due to the high standard of proof required. To change this, the draft bill provides that in the future the requirement of fault will be deleted altogether. In addition, the period during which disgorgement may be orderedf will be extended to 10 years after the infringement has ended.

Particularly interesting is the introduction of (rebuttable) statutory presumptions, whereby it is presumed that

1. the cartel infringement resulted in an advantage for the undertaking concerned
2. this advantage amounts to at least 1% of the worldwide group turnover of the goods and services concerned.

IV. Initial Evaluation

As a first step in implementing its competition policy agenda published in February, the BMWK wishes to strengthen the FCO's powers of intervention and lower the requirements for various instruments and claims. The skimming off of advantages in particular is likely to be used increasingly by the FCO in the coming years and to have a deterrent effect on companies. Since some anti-competitive phenomena of the 21st century - especially in digital markets, which are particularly susceptible to concentrations of power due to strong network and scale effects - cannot (or can no longer) be controlled with the existing antitrust toolbox, the BMWK deliberately breaks with the existing antitrust doctrine and gives the FCO quasi-regulatory powers.

It remains to be hoped, however, that in the course of the legislative process the decisive issues of the preconditions and the legal consequences will be clarified in such a way that legal uncertainty will be reduced. To this end, more specific requirements can be introduced for both definitions of individual characteristics or preconditions (e.g. for the term "significant, persistent or repeated distortion of competition") and the legal consequences (e.g. who can be affected by a measure after a sector inquiry has been carried out).

Uwe Wellmann
Nima Valadkhani

The transaction is structured as a share deal whereby Aurelius will acquire the specific legal entities, i.e. Sappi Stockstadt GmbH, Sappi Maastricht Real Estate B.V. (including its subsidiary Sappi Maastricht B.V.), Sappi Finland I Oy and Sappi Finland Operations Oy, which own and control the assets and liabilities of the individual mills.

The enterprise value of the transaction amounts to approximately EUR 272 million and the consideration consists of cash proceeds and retained receivables as well as retained liabilities. The transaction is expected to close in Q1 2023, subject to various standard suspensive conditions.

Sappi is a global leader in dissolving pulp and paper-based solutions, headquartered in Johannesburg, South Africa. It has over 12,000 employees, manufacturing facilities in ten countries spanning over three continents and customers in over 150 countries worldwide.

Advisors to Sappi Limited:

Advant Beiten: Dr Christoph Schmitt (Lead Partner; Banking & Finance) and Dr Markus Ley (Lead Partner, Corporate Law); Dr Mario Weichel and Maximilian Matusewicz (both Corporate Law); Dr Gerald Müller-Machwirth and Maike Pflästerer (both Employment Law); Katrin Lüdtke and Philipp Früh (both Public Law); Anja Fischer (Real Estate); Susanne Klein (IT Law and Data Protection) as well as Christoph Heinrich, Dr Christian Heinichen and Cathleen Laitenberger (all Antitrust and Competition Law).

Stibbe is advising on the Dutch law aspects and Fondia is advising on the Finnish law aspects of the transaction.

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
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Markus Ley
Rechtsanwalt
ADVANT Beiten
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Markus.Ley@advant-beiten.com

After the European Super League had almost been forgotten, the debate about the highly controversial project is now resurging again. In April 2021, twelve top European football clubs announced their intention to establish their own European breakaway competition, the "Super League", in rivalry with UEFA's international competitions, and of whom these twelve clubs planned to form the core. After a few days of fierce opposition from, in particular, fans, clubs and officials, the project quickly seemed buried. Only Real Madrid, Juventus Turin and FC Barcelona remained committed to the idea. Consequently, the Madrid Commercial Court submitted a series of questions to the European Court of Justice (ECJ) in Luxembourg concerning European competition law and the ECJ's answer will strongly influence the future organization of professional football. The central questions are: Did FIFA and UEFA act as an illegal cartel? Did they abuse their dominant position within the international market? Is there a restriction of fundamental EU freedoms?

Running Foul of EU competition law?

The European Superleague Company, S.L. requests the Madrid Commercial Court to find that the actions and statutes of UEFA and FIFA violate Articles 101 and 102 TFEU on cartels and abuse of dominant positions¹. In addition, Superleague Company claims breaches of the four fundamental freedoms protected by the Treaty (Articles 45, 49, 56 and 63 TFEU). The Spanish court submitted six preliminary questions to the ECJ which should assess the prior authorization required by FIFA and UEFA for the organization of competitions by third parties if FIFA and UEFA members want to participate in them. Furthermore, the Spanish court asks whether FIFA and UEFA may impose sanctions on clubs and/or players participating in the Super League, as well as imposed rules on the ownership of all rights associated with the competition.

UEFA and FIFA – an anticompetitive cartel?

Super League accuses UEFA and FIFA of running an anti-competitive cartel. The authorization procedure for the creation of new competitions would serve to secure their monopoly position and prevent competition on the market. The "radical conflict of interest" created by UEFA's "dual role" as regulator and operator is particularly decried in this context: Why should UEFA voluntarily allow competition in the hitherto exclusive market by granting authorizations to competing events? Besides, the threatened sanctions against players and clubs would be contrary to other EU law rules.

Core of the defense: the preservation of "sporting integrity"

In their written and oral submissions, more than twenty EU Member States are (almost) united in defending UEFA. Despite years of scandals and criticism of the world football's governing body and its members, UEFA is now said to represent the values of the European Sports Model, to protect the physical and ethical integrity of sportsmen and sportswomen and merit-based competition, which would always be open to the best performing teams. While it is acknowledged that the regulations and conduct of FIFA and UEFA could, in principle, be against the prohibition of cartels, the protection of "sporting integrity" is put forward as a legitimate objective in the sense of the Meca-Medina decision of the ECJ². According to this jurisdiction, the three-step test applies, which requires a legitimate objective, consequential effects restrictive of competition inherent in the pursuit of those objectives, and the proportionality of the measure. In the view of UEFA and FIFA as well as many of the participating Member States, these requirements are fulfilled. Thus, opposing the Super League would not amount to an illegal restriction of competition under Article 101 (1) TFEU and any infringement of Article 102 TFEU (prohibition of abuse of a dominant position) would also justified. When looking at possible justifications of restrictions, the social and economic aspects of the case and not only strictly (antitrust) legal arguments should be taken into account in the decision-making. Regarding to the alleged conflict of interest, it can be argued that – as with other business companies – such a conflict is inherent in the defense of one's economic interest and is not per se anti-competitive. In this respect, a different legal treatment of undertakings operating in the field of sport would appear artificial.

At the same time, FIFA, UEFA and Member States are counterattacking and argue that the Super League represents a "textbook example of a cartel" leading to the "death of open competition". This argument is based on the fact that the new competition foresees a certain number of permanent, financially strong members. This would be contrary to the principle of a participation based on merits. The German Federal Minister of Sports Nancy Faeser therefore says: "Anyone who loves football is against a Super League." However, can such an argumentation actually hold up legally?

EU competition law as a binding framework

The European Commission, which is also heard in all preliminary ruling procedurs, takes a nuanced stand adopting in large parts the General Court's position in the ISU-judgement³. It insists on compliance with EU law. Thus, it calls for a system of "checks and balances" on the monopoly power of FIFA and UEFA. The exercise of regulatory functions must be subject to restrictions, obligations and review to prevent such bodies from distorting competition. A modification of the approval procedure by FIFA and respectively UEFA could be a possible consequence which would have to be designed as a procedure regulated on the basis of objective, transparent and non-discriminatory criteria, so that approval is not de facto excluded from the outset. The Commission appeared also doubtful as to the legality of threatened sanctions, namely bans on participating in FIFA and UEFA competitions and national leagues, or on playing for the national team. In particular, doubts were expressed on the necessity and proportionality of the measures. Nevertheless, the Commission also acknowledges that UEFA may have "legitimate objectives to restrict competition" but that "any defense of the European Sports Model must respect European law, in particular with regard to competition law and fundamental freedoms". UEFA may have a conflict of interest in approving competitions organized by third parties. Finally, the question of whether the Super League itself constituted a cartel would have to be examined in another proceeding.

Waiting for the decision of the "referee" from Luxembourg

After the hearing before the ECJ, which mainly focused on the technical complexities of EU competition law, the opinion of the Advocate General Athanasios Rantos, announced for 15 December 2022 and often indicative of the final judgment, is now eagerly awaited. The final ECJ ruling will probably depend to a large extent on whether the 15 judges recognize that the restrictions in question are inherent in the pursuit of the legitimate objective and what weight they give to that objective in the context of their consideration. The judgement is expected at the end of this or in the beginning of the next year.

Given the apparent similarity of the cases, the appeal of the International Skating Union (ISU) against the ISU-judgment was also heard by the ECJ's Grand Chamber on Monday, 11 July 2022⁴. The General Court had dismissed the ISU's objections against a Commission Decision⁵ classifying the prior authorization rule prescribed in the federation's statutes as a violation of Articles 101 (1) and 102 TFEU on 16 December 2020.

Consequently, in both cases, that of the governing body for figure skating and speed skating as well as the one responsible for football, a comparable positioning of the ECJ can be expected. This will have a lasting impact on the future relation between EU competition law on the one hand and regulations of sports associations on the other.

Prof. Dr Rainer Bierwagen
Dr Dietmar Reich

¹ Case C-333/21
² Case C-519/04 P, David Meca-Medina and Igor Majcen v Commission of the European Communities, ECLI:EU:C:2006:492
³ Case T‑93/18, International Skating Union v European Commission, ECLI:EU:T:2020:610
⁴ Case C-124/21 P, International Skating Union v European Commission.
⁵ Decision C (2017) 8230, Case AT. 40208 – International Skating Union’s Eligibility rules

The "Fit for 55" package includes draft amendments to existing EU legislation in the fields of climate, energy and transport and 13 new legislative proposals aiming to reduce emissions in a wide range of sectors. This makes it the EU's largest revision of climate and energy legislation to date. The package was presented by the Commission one year ago, in July 2021. For the drafts to become binding legal acts, the approval of the European Parliament as well as of the Member States, represented in the Council of the European Union, is required.

Dissatisfaction about the planned emission-free mobility

The European Parliament's most straightforward vote on a measure in the climate package so far was the adoption of the Commission's proposal to revise the CO2 emission performance standards for new cars and vans, reaching zero-emission road mobility by 2035. This means a de facto ban on the sale of diesel, petrol, and hybrid vehicles.

However, to arrive at an agreement among European environment ministers on this issue proved more difficult. Especially Germany's role in the negotiations was strongly criti-cized, for making late and uncoordinated proposals, such as a proposal on allowing synthetic fuels. Nevertheless, the Council voted in favour of the Parliament's position. Still, the German government continues to hope that a recital clause inviting the Com-mission to examine the use of CO2 neutral fuels outside the scope of the fleet standards will allow it to weaken the phase-out consequences.

Disagreement on the revision of the European Emissions Trading Scheme (ETS)

One of the central elements of the Commission's proposal, the reform of the European Emissions Trading System and its extension to transport and buildings, was initially rejected. So far, only energy-intensive industrial sectors, the energy sector and aviation within Europe must have their emissions certified.

While conservative politicians wanted to weaken the Commission's proposition by amending it, for example by continuing distributing free allowances to companies for a longer period of time, the Greens and Social Democrats considered the draft not being enough ambitious and instead of agreeing on a softened emissions trading regume, they rejected the text.

However, Christian Democrats, Social Democrats and Liberals agreed on a compromise outside the plenary sessions. That compromise reduces emissions in ETS by 63% by 2030 compared with 2005 levels. The Commission's original proposal set a target of 61%, and the Environment Committee originally called for 67%. It was also agreed to gradually phase out the free allowances by 2032, and from 2027 onwards, the Carbon Border Adjustment Mechanism (CBAM) should also be applied to the ETS sectors. Nevertheless, whether the CBAM will become law and is compatible with the rules of the World Trade Organization must still be seen.

Surprisingly, in the plenary session on 22 June 2022, MEPs went even further than agreed in the compromise and now want to establish a new ETS for commercial buildings and transport by 2024. According to the Parliament's vote, before this ETS is to include private buildings and road transport, there should be a new co-decision procedure, as this would further increase energy costs for citizens. Maritime transport should also be covered by emissions trading in the future.

On the night of 29 June 2022, the Council announced its negotiation position on this issue, which is more similar to the Commission's proposal. For example, it does not adopt elements such as the separation between the commercial and private building and transport sectors because of the difficulty of implementation. In the future trialogue, an inter-institutional negotiation, essential points will still have to be discussed.

Final votes are being adjourned

Important votes on parts of the climate package were initially adjourned, such as the vote on the Carbon Border Adjustment Mechanism (CBAM) and the vote on a Social Climate Fund to help vulnerable citizens cope with the increased costs of the energy transition. However, this made it possible to draw up even more climate-friendly drafts, which were adopted by the Parliament.
The Council has also already announced its negotiation positions on these issues, which, nevertheless, differ from the Parliament's drafts in some points. In these negotiations, the German government again was not very willing to compromise and wanted to drastically reduce the climate social fund. This made coming to an agreement within the Council more difficult.

Faster agreement in votes on environmental targets

MEPs were able to agree more quickly on environmental targets, including higher ambitions for carbon sinks in land use and in the forestry sector, higher emission reduc-tions in international aviation and higher reduction targets for EU Member States. Nonetheless, especially in the latter case, it is debated how the set target of 40% renewable energy sources in the EU's overall energy mix by 2030 can be reached, as currently the share of renewable energy is at only 20%. The Council has not yet com-mented on these targets.

Sufficient willingness to compromise?

It is striking that the Parliament successfully voted on texts of the climate package that concern theoretical targets, while actual measures were rejected or the vote on them was postponed.

It will be interesting to see whether the European Parliament and the Council, despite having differing positions, will show enough willingness to compromise in order to pass legislation that will help achieve EU's climate goals.

Prof. Dr Rainer Bierwagen

The ADVANT Beiten team around lead partner Dr Sebastian Weller provided full support for the complex transaction across practice groups and offices: from the preparation and structuring of the transaction (including due diligence), to the negotiation, implementation and closing of the transaction including antitrust notification.

Medline is a leading global healthcare company that manufactures and distributes high-quality medical and surgical products. Medline Europe was founded in 2011 and operates branches, as well as production and distribution centres throughout Europe.

Asid Bonz is a leading supplier to clinics and hospitals in Germany, offering high-quality products for surgery, anaesthesia, ward care and urology. Asid Bonz was founded in 1811 and is known worldwide for having developed the first anaesthetic ether. In 2021, Asid Bonz achieved a turnover of more than 30 million euros and supplied more than 1,100 hospitals in Germany.

With similar business models and excellent customer service, the two companies are an excellent strategic fit. In the future, Medline will make the Asid Bonz brand available to its broad European customer base outside of Germany. Within Germany, Asid Bonz sales representatives will have access to selected Medline products to further expand their partnership with customers.

Advisor to Medline International B.V.:
ADVANT Beiten: Dr Sebastian Weller (Corporate/M&A, in charge), Nico Frielinghaus (Corporate/M&A), Dr Tassilo Klesen (Corporate/Commercial), Markus Schönherr (Corporate/M&aA), Dr Patrick Hübner (Investment Control), Peter Weck (Labour Law), Dr Andrea Pomana (Antitrust), Christoph Heinrich (Antitrust), Marco Mirceta (Antitrust), Mathias Zimmer-Goertz (IP), Christian Döpke (Data Protection), Dr Marion Frotscher (Tax), Simon Bauer (Tax), Katrin Lüdtke (Public Law), Sascha Opheys (Subsidies).

Advisor to Medi-Globe Europe:
White & Case: Dr Stefan Koch, lead partner

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
Frauke.Reuther@advant-beiten.com

Dr Sebastian Weller
Lawyer
ADVANT Beiten
+49 (211) 51 89 89 - 134
Sebastian.Weller@advant-beiten.com

Gábor Báthory has extensive experience in advising international clients and strengthens the valuable cross-border expertise of ADVANT Beiten. Dr. Dietmar O. Reich, Head of the Brussels office, comments: "We are delighted to welcome an extraordinarily experienced colleague in Brussels!"

Gábor Báthory advises in particular on EU internal market law, EU and international trade law and EU competition law. He has wide-ranging experience in assisting clients in litigation before the EU Courts and in representing clients before EU institutions. He regularly represents large companies in the retail, chemical, aviation and automotive industries. Mr Báthory also has more than 10 years of experience in EU trade law. His expertise includes assisting clients regarding regulatory investigations and represents them before the European Commission and the EU Courts, as well as in customs matters involving national customs authorities and OLAF.

The lawyers in ADVANT Beiten's Brussels office have advised clients in European law matters over three decades. In particular, our experts advise on cartels and merger control, joint ventures and public procurement procedures across borders. We counsel clients from a wide range of industries, including automotive, steel, chemical, pharmaceutical and food, as well as energy, environment and waste management, research and development, aviation, transport, media and sports.

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
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frauke.reuther@advant-beiten.com

Dr. Dietmar O. Reich
Rechtsanwalt
ADVANT Beiten
+32 2 639 0000
Dietmar.Reich@advant-beiten.com

The European Court of Justice approves the conditionality mechanism

Today, the European Court of Justice upheld the conditionality mechanism which makes the receipt of financing from the Union budget subject to the respect by the Member States for the principles of the rule of law, see judgments in Cases C-156/21 and C-157/21.

The Regulation 2020/2092 on a general regime of conditionality for the protection of the Union budget establishes a general regime of conditionality for the protection of the Union budget in the case of breaches of the principles of the rule of law in a Member State. In order to attain that objective, the regulation allows the Council, on a proposal from the Commission, to adopt protective measures such as the suspension of payments to be made from the Union budget or the suspension of the approval of one or more programmes to be paid from that budget.

The full bench of the European Court of Justice has rejected challenges to these rules. The Union is founded on common values and compliance by the Member States with the common values is a condition for the enjoyment of all the rights deriving from the application of the Treaties to a Member State.

The sound financial management of the Union budget and the financial interests of the Union may be seriously compromised by breaches of the principles of the rule of law committed in a Member State. The rules are not designed to penalise a Member State for breaches of the rule of law as such.

The European Commission has now to review the breaches of the rule of law in several Member States and to propose the necessary actions in order to safeguard the Union budget.

Upholding the rule of law is and remains fundamental for civilized societies

While many believed that the checks and balances established over centuries in the Western world would withstand any assault on the rule of law, and would moreover be adopted by many other countries, not least the Eastern European countries having acceded the European Union, the developments over recent years have proved otherwise.

Upholding the values of the European Union

Upholding the values enshrined in the EU founding treaties, as developed, and set forth in Article 2 of the Treaty establishing the European Union, has always been a formidable task for the European Union institutions.  While the so-called infringe-ment procedure against an EU country that fails to implement EU law (for instance for not implementing EU legislation on the protection of the environment) is widely accepted, an action against a Member State for disrespecting the EU's fundamental values is not.

EU Member States have raised concerns about the rule of law in Austria, when the Freiheitliche Partei Österreich acceded to power under its leader Jörg Haider more than twenty years ago, and more recently with Hungary, Poland and Romania.

Article 2 of the Treaty of the European Union (TEU) establishes as core values that "The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail."

Article 7 TEU sets forth a procedure in two steps: If they consider that there exists a clear risk of a serious breach by a Member State of the values referred to in Article 2, the European Parliament, the European Commission, or one-third of Member States can ask the European Council to make such a determination. For the Council to adopt such a determination, four-fifths of the Member States must agree and the Parliament consent. The majority threshold is high, but less than the unanimity requirement for taking the next steps.

The next steps are a formal warning, and ultimately sanctions and the suspension of voting rights. This is where procedures have stalled in the past against Hungary and Poland.  Both countries obtained the support of at least each other which was insufficient to forestall a decision in the first phase, but enough to stop the second step, i.e. sanctions or the suspension of voting rights.

The Article 7 TEU decision-making process is arduous, and the unanimity requirement is an obstacle to success to act against very serious threats, such as the Polish Constitutional Court stating that several articles of EU Treaties are incompatible with Poland's constitution. 

Will new instruments freezing the flow of money be more effective?

In view of the deadlocks encountered in Article 7 TEU proceedings, a new instrument was devised, consisting in withholding EU money to the Member State in question. The new rules were adopted in Regulation 2020/2092, despite the fierce opposition of Hungary and Poland in the negotiations concerning the EU budget and the extra budgets for overcoming the economic consequences of the COVID-19 pandemic, € 800 billion next-generation stimulus fund.

Hungary and Poland challenged the rules in the European Court of Justice. In summary, they argue the new rules circumvent the Article 7 procedure and have nothing to do with the protection of the EU budget. The Court has now rejected the arguments; the new rules are not to penalize a Member State for breaches of the rule of law as such but for the distinct issue of protecting the budget. The judgment has paved the way for action by the EU and made it easier to fight for EU core values.

Any procedure must be initiated by the European Commission and decisions using the new mechanism must be made by the Council. But unlike the Article 7 TEU sanctions mechanism requiring unanimity among Member States, decisions to freeze funds may be made by qualified majority. This means that it becomes more difficult for a country to find enough like-minded countries in order to veto a decision.

A number of Member States and the majority of the European Parliament are adamant that the Commission starts using the rules, with the Parliament even considering legal action against the Commission for dragging its feet. Moreover, two big Member States are more than hesitant to support decisive actions against Hungary and Poland. The struggle to find a coherent and strong response to the challenges of the rule of law is not over.

At this moment, a number of issues await decisive action, from the dispute over the appointment of judges in Poland, to lignite mining at the Turow open pit mine on the border with Saxony and the Czech Republic to the Romanian Constitutional Court arguing that Romanian law overrides EU law.

Prof. Dr. Rainer Bierwagen

Founded in 2014, the Berlin-based start-up JUNIQE specialises in prints and posters by artists and is excellently positioned in the market. Since its foundation, JUNIQE has received more than 20 million euros in capital from shareholders, including well-known names such as Vorwerk Ventures, High-Tech Gründerfonds and the Cewe Foundation. The founders of JUNIQE leave the operational management but remain closely associated with the company in an advisory capacity. The JUNIQE location in Berlin and the brand will be retained. The number of MYPOSTER employees increases by 70 to 350 with the takeover.

MYPOSTER was founded in 2011 and has experienced rapid growth in recent years. The MYPOSTER group includes the brands myposter, Kartenliebe, ArtPhotoLimited and its own production company Printhouse. The takeover of JUNIQE is MYPOSTER's largest acquisition to date and represents a milestone for the company. MYPOSTER will further develop JUNIQE's business model strategically and innovatively and thus expand it into an even stronger provider in European e-commerce.

Advisors to MYPOSTER:
ADVANT Beiten: Dr Sebastian Weller (in charge, Corporate/M&A/Venture Capital, Dusseldorf), Dr Martin Rappert, Dr Julia Offermanns, Nico Frielinghaus, Dr Winfried Richardt, Markus Schönherr (all Corporate/M&A, alle Dusseldorf), Tassilo Klesen (Corporate/Commercial, Berlin), Wilken Beckering (Corporate/Commercial, Dusseldorf), Lelu Li (Commercial, Berlin), Thomas Herten (Real Estate, Dusseldorf), Peter Weck (Labour Law, Dusseldorf), Christoph Heinrich (Antitrust, Munich), Mathias Zimmer-Goertz (IP, Dusseldorf), Christian Döpke (Data protection, Dusseldorf), Helmut König (Tax, Dusseldorf), Jan Christian Mohrmann (Tax, Frankfurt), Dennis Grimmer, Vivienne Sulek (both Financial Due Diligence, both Dusseldorf).

Advisors to JUNIQE: Osborne Clarke (Nicolas Gabrysch, Alexandra Nautsch)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
+49 (69) 75 60 95 - 570
frauke.reuther@advant-beiten.com

Dr. Sebastian Weller
Lawyer
ADVANT Beiten
+49 (211) 51 89 89 -134
Sebastian.Weller@advant-beiten.com

The entire German article by Dr Andrea Pomana in the FAZ of 12.01.2022, can be viewed in full here.

The Prelude

On 21 December 2021, the European Court of Justice (ECJ) delivered the first judgment on the interpretation of the EU Blocking Regulation in Case C-124/20 Bank Melli Iran. Five months earlier, the ECJ Advocate General Gerard Hogan had delivered an opinion in the case in which he held that Iranian companies can rely on EU law before the courts of the Member States against US secondary sanctions.
The crucial question is whether EU companies may terminate contracts with companies subject to US secondary sanctions without giving reasons, or whether such termination violates Article 5(1) of the EU Blocking Regulation and is invalid.

Background

Bank Melli Iran is an Iranian bank with a branch in Hamburg that had concluded contracts with a subsidiary of Deutsche Telekom for telecommunications services. The contracts were terminated in November 2018, first with immediate effect and then with due notice. Bank Melli Iran claimed before German courts that the termination was invalid.
After the withdrawal of the USA from the nuclear agreement with Iran (Joint Comprehensive Plan of Action JCPOA) in 2018 under then President Donald Trump, Bank Melli Iran was put on the list (SDN list, Specially Designated Nationals and Blocked Persons-List) by the USA. Under US law, this has the effect of prohibiting all business dealings with Bank Melli Iran worldwide, so-called secondary sanctions. The sanctions affect the Iran business of companies without a direct connection to the territory of the USA.
The sanctions were imposed a few days prior to the termination of the contracts. Deutsche Telekom generated about half of its turnover from operations in the USA.

International Law and Secondary Sanctions

Given their reach beyond the US territory, secondary sanctions are regarded by the EU as a violation of international law, and the EU (then EC) had countered their effects as early as 1996.

Council Regulation (EC) No 2271/96 of 22 November 1996 on protection against the effects of the extraterritorial application of legislation adopted by a third country, and of measures based thereon or resulting therefrom, stipulates that the requirements and prohibitions of the US sanctions listed in the updated annex to the EU Blocking Regulation may not be complied with in the EU.

In particular, the Article 5 of the Regulation reads in paragraph 1:
No person referred to in Article 11 shall comply, whether directly or through a subsidiary or other intermediary person, actively or by deliberate omission, with any requirement or prohibition, including requests of foreign courts, based on or resulting, directly or indirectly, from the laws specified in the Annex or from actions based thereon or resulting therefrom.

The Annex covers sanctions imposed by the US. Persons can only be exempted from complying fully or partially with the prohibition if compliance with the prohibition would seriously damage their interests or those of the EU, and provided the European Commission has authorized them to do so.

The Interpretation of the Blocking Regulation by the ECJ

The ECJ first holds that Art. 5 (1) of the Regulation applies even if there are no rules on compliance at national level. National courts must ensure compliance with the obligations or prohibitions provided for in the Regulation in civil disputes.
In the present case, the plaintiff argues that the statutory prohibition in § 134 Civil Code (BGB) applies by virtue of Article 5 of the blocking regulation, and the plaintiff bears the burden of proof that the requirements of § 134 Civil Code are met.
These requirements apply even in a situation where Deutsche Telekom terminated the contract without giving reasons (which it may do under the applicable civil laws). The application of the general rule on the burden of proof may however make it practically impossible or excessively difficult for the national civil court to establish a breach of the prohibition and as a consequence possibly impair the practical effectiveness of the prohibition.

The European Court of Justice therefore considers that a shift in the burden of proof is appropriate where "all the evidence available to a national court tends to indicate prima facie that, by terminating the contracts in question, a person referred to in Article 11 of that regulation, who does not have an authorisation within the meaning of the second paragraph of Article 5 of that regulation, complied with the laws specified in the annex". It is then "for that person to establish to the requisite legal standard this his or her conduct did not seek to comply with those laws".

Next, the Court addresses in detail Deutsche Telekom's objection that the possible finding of invalidity of the termination would cause it serious damage. It must be borne in mind that there is a separate procedure for granting exceptions to the prohibition, that the European Commission decides on exceptions on application and that Deutsche Telekom has not made any application.

The Court insists (as had the Advocate General) on the observance of the blocking regulation but nevertheless opened a small loophole in holding that the referring court must examine whether the prohibition could have disproportionate effects in concreto.

Outlook

The European Commission considers revising the blocking regulation, and its proposals are expected for later this year. The comments of companies concerned and business associations during the consultation for revisions of the blocking regulation as well as the opinion of Advocate General Hogan in the proceedings have made it clear that the current rules are rather crude and difficult to enforce. The Commission’s proposals on how to improve this unsatisfactory situation are therefore eagerly awaited. Until then, the Court's judgment does make clear that the law has to be observed.

WPG is a leading provider of advanced mission-critical drive systems and services for off-highway and industrial applications, headquartered in Lohmar near Cologne, Germany. WPG is represented in 75 countries with components and drive systems for agricultural, industrial, construction and mining machinery and employs more than 2,200 people worldwide. 

The merger of Comer Industries, listed on the Borsa Italiana, with WPG will create one of the world's largest suppliers of drive solutions in the agricultural sector, with an expected combined turnover of one billion euros in 2021.

ADVANT Beiten supported the transaction, which was completed in December 2021, in particular by carrying out legal due diligence, conducting a clearing procedure under the German Foreign Trade and Payments Regulation (Außenwirtschaftsverordnung) and assisting with German and Russian antitrust clearance.

Adviser to Comer Industries: 
ADVANT Beiten: Dr Christian von Wistinghausen (Lead Partner in charge), Tassilo Klesen, Dr Patrick A. Hübner, Lelu Li, Olga Prokopyeva (all Corporate / M&A, Berlin), Dr Klaus Kemen, Robin Maletz (both Real Estate, Berlin), Katrin Lüdtke, (Public Sector, Munich), Michael Ziegler, Petra Fendt (both Banking/Finance & Capital Markets, Munich), Christoph Heinrich, Cathleen Laitenberger (both Antitrust Law, Munich), Uwe Wellmann (Antitrust Law, Berlin), Susanne Klein (IP/IT, Frankfurt), Dr Nicole Hirschvogel (IP/IT, Munich), Julia Alexandra Schütte (Employment & Labour, Berlin), Christian Freiherr von Buddenbrock (Employment & Labour, Dusseldorf), Julia Meler (Employment & Labour, Munich).

ADVANT Beiten, Moscow (Russia) (for regulatory clearances under Russian law): Vasily Ermolin

ADVANT Nctm, Milan (Italy), NOBILI RTZ Legal

Adviser to WPG: Freshfields Bruckhaus Deringer LLP, Milan (Italy)

Media Contact
Frauke Reuther
Manager Kommunikation
ADVANT Beiten
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Dr. Christian von Wistinghausen
Lawyer
ADVANT Beiten
Tel.: +49 30 26471-351
Christian.Wistinghausen@advant-beiten.com

Andreas Mundt, President of the Federal Cartel Office, said: "We have been very active in this area for more than a decade and have already successfully concluded several proceedings against large Internet groups. Since the beginning of this year, we have a new antitrust instrument at our disposal. We can now act even more effectively against restrictions of competition by large digital corporations and have initiated proceedings against Google, Amazon, Facebook and Apple on this basis in the past five months."

The drumbeat started on 7 February 2019 after a three-year review: the German Federal Cartel Office prohibits Facebook from combining user data from different sources.

The office's decision covers several data sources:

1. In future, the services belonging to the Facebook group, such as WhatsApp and Instagram, will still be allowed to collect the data. However, an allocation of the data to the user account at Facebook is now only possible with the voluntary consent of the user. If the consent is not given, the data must remain with the other services and may not be processed in combination with the Facebook data.
2. A collection and allocation of data from third-party websites to the Facebook user account will also only be possible in the future if the user voluntarily consents to the allocation to the Facebook user account.

From the point of view of antitrust law, the company's behaviour was considered an abuse of a dominant market position. Facebook, on the other hand, disagrees with the finding, as it sees itself in competition with providers such as YouTube, Snapchat and Twitter, and filed an appeal against the decision. In the Düsseldorf Higher Regional Court case on 24 March 2021, the latter referred the case to the European Court of Justice and asked for an opinion on whether it is permissible for a national antitrust authority to find infringements of the General Data Protection Regulation and to take measures against them. Furthermore, the ECJ has to clarify what constitutes sensitive data in this context.

On 10 December 2020, it was published that the German Federal Cartel Office is investigating the linking of Oculus virtual reality products with the social network and Facebook.

Virtual reality products aim to put the user in a virtual reality when using digital content. Three-dimensional vision, which enables the human eye to perceive the environment spatially, is simulated by appropriate technology. VR glasses are required to use VR technology. The use of the Oculus glasses should only be possible with an existing Facebook account. This link could affect the competition of the social networks as well as the growing VR market and thus constitute a prohibited abuse of a dominant position by Facebook. The 10th GWB amendment came into force on 19 January 2021. A central component of the new provisions of the Act is aimed at companies with a so-called superior cross-market significance for competition. These new provisions are enshrined in Section 19a GWB and are intended to enable the German Federal Cartel Office to impose special conduct obligations on such companies. Therefore, the German Federal Cartel Office expanded its examination to include whether Facebook falls under the new regulations and whether the link should be measured against this.

On 23 July 2021, the German Federal Cartel Office announced that it was examining whether the planned acquisition of the start-up Kustomer by Facebook was subject to a merger control notification obligation.

Kustomer is based in the USA (New York) and is a company that offers a cloud-based customer management platform to corporate customers. Within the scope of the examination, it must be determined whether the transaction has a domestic effect and whether the target company is active to a significant extent in Germany. Both are prerequisites for the applicability of German merger control. With the 9th GWB amendment in 2017, the legislator introduced the so-called transaction value threshold. This makes it possible to examine mergers and acquisitions under competition law if the purchase price exceeds €400 million, even though the company only generates low or even no turnover. The high purchase price results from the expectation or hope in the potential of the company.

The wind is getting rougher.

Parallel proceedings are being brought in Brussels and New York.

EU Commissioner for Competition Margrethe Vestager announced that she will investigate possible competition violations and that formal proceedings have been initiated against Facebook. Both the US government and 46 states are taking the case to court. In December last year, New York Attorney General Letitia James accused the internet company of unfair competition: "Facebook has used its monopoly power to crush smaller rivals and wipe out competition, all at the expense of everyday users". The US Federal Trade Commission (FTC) even explicitly calls for its break-up in its own complaint. The discussion and criticism of the internet giants will certainly not decrease in the face of their ever-increasing power, but rather increase.

Prof. Dr Rainer Bierwagen

The Certificate will provide an EU wide digital proof of vaccination, negative test results or recoveries from COVID-19 to facilitate safe and free movement of citizens within the EU. However, the paper version continues to be accepted throughout the EU27. Both the digital and the authorized paper version have a QR-Code, containing the most relevant information and a digital signature to verify the authenticity of the certificate. Depending on the Member States, the issuing is done directly in the vaccination centres or either by pharmacies and doctors or via eHealth platforms.

21 EU countries as well as Norway, Iceland and Liechtenstein had already started to issue certificates earlier. Despite some "teething" problems, the EU has acted in an unusually expedited manner in order to adopt the legislative framework in record time. Moreover, the European Commission pushed the EU countries to do so at national level and to organize the issuing of certificates.
A lot has therefore happened since we last reported "Saving free movement and the tourism industry with an EU vaccination passport - dubbed a Digital Green Certificate" on the earlier named "Digital Green Certificate".

Free movement in the EU, guaranteed in principle as a fundamental principle of EU law but endangered through national measures to contain the spread of the virus, is upheld, as is the security of personal data.

EU Member States however use their national prerogatives and have national additional certification systems for granting access to public places, from restaurants to festivals. These national systems may confuse the public at large, but at least for travellers, summer can start. The certificate will thus help bringing the tourism industry out of the doldrums.

Dr Rainer Bierwagen

What is the content of the proposal and will it arrive in time for saving the summer?

The main points addressed in the proposal are the accessibility and security of certificates for all EU citizens, the non-discrimination and the use of only essential information and secure personal data. This is the Commission's response to the strong adverse reactions in some countries and populations to plans of a vaccination passport for the EU.

The Digital Green Certificate should cover three types of certificates –vaccination certificates, test certificates (NAAT/RT-PCR test or a rapid antigen test), and certificates for persons who have recovered from COVID-19. The certificates are to be issued in digital form or on paper. Both versions should have a QR code containing the necessary key information and a digital signature to ensure that the certificate is authentic. To this end, the Commission intends to build a gateway and support EU Member States in developing software that will allow authorities to verify all certificate signatures across the EU. In doing so, no personal data of the certificate holders should be routed through the gateway nor stored by the verifying Member State. Certificates are to be available free of charge and in the official language(s) of the issuing Member State and in English.

As a consequence, certain public health restrictions such as testing or quarantine will be waived in member states where proof of vaccination is accepted through the certificate. If a measure is taken despite a Digital Green Certificate, it shall be explained and justified before the Commission.

To address the privacy concerns, the Commission makes clear, only essential information such as name, date of birth, date of issue, relevant vaccination/test/cure information and unique identifiers are to be stored.³ The use of data is restricted to verifying the authenticity and validity of the certificates.

Which steps are necessary to make the certificate off the ground?

The ball has been set rolling by the European Council in February 2021 and the Commission has been working with Member States to prepare for vaccination certificate interoperability. The eHealth network of national authorities responsible for eHealth services agreed guidelines and a draft trust framework.⁴

In order to achieve the Commission's ambitious goal the European Parliament and the Member States in the Council must rapidly agree and adopt the regulation. Whether this will be accomplished depends on our politicians. Meanwhile, the EU countries have to implement the trust framework and technical standards agreed in the eHealth network.

Dr Rainer Bierwagen

[1]https://ec.europa.eu/info/sites/info/files/en_green_certif_just_reg130_final.pdf.
[2]https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1181.
[3]As shown in the Trust framework outline: https://ec.europa.eu/health/sites/health/files/ehealth/docs/trust-framework_interoperability_certificates_en.pdf.
[4]https://ec.europa.eu/health/sites/health/files/ehealth/docs/trust-framework_interoperability_certificates_en.pdf.

Taming of Digital Giants

The high-profile core of the 10^th Amendment of the German Act Against Restraints of Competition are the special rules of conduct for companies with “paramount significance for competition across markets.” Those that the Federal Cartel Office categorises as being of paramount significance for competition will be subject to intensified supervision to prevent market abuse. Legislators clearly have large digital platform operators in their sights.

The Federal Cartel Office can prohibit leading online platforms from engaging in a broad range of conduct that threatens competition. This includes giving preference to the companies' own services in search results, the exclusive pre-installation of their own apps and the coupling of various offers. They are also prohibited from impeding competitors when it comes to interoperability and data portability.

This gives the Federal Cartel Office a tool with which it can tame the digital giants. Distortions of competition can be combatted simpler and quicker in the future. Even the legal recourse against decisions of the Federal Cartel Office has been shortened to achieve this goal.

The main winners of these new rules are start-ups that operate in the “kill zone” surrounding “GAFA” (Google, Amazon, Facebook and Apple). Their risk of being driven out by unfair competition is reduced. Of course, this will only be the case if the Federal Cartel Office makes ample use of the new instrument.

Less Merger Control for Investments and Exits

To allow the Federal Cartel Office to focus on such cases, the merger control burden has been eased. The turnover thresholds, which dictate whether or not a transaction needs to be notified to the Federal Cartel Office, have been increased significantly. The new thresholds are: (i) total worldwide turnover of all parties exceeds EUR 500 million, (ii) the German turnover of one of the parties (e.g. the acquirer) exceeds EUR 50 million, and (iii) the German turnover of a further party (e.g. the start-up that is being sold) exceeds EUR 17.5 million.

The requirement to notify certain transactions where the consideration exceeds EUR 400 million remains. This requirement had been introduced by a previous amendment in reaction to the fact that there was no obligation for Facebook to notify its acquisition of WhatsApp.

In addition, a totally new provision imposes a notification requirement on certain mergers upon the request of the Federal Cartel Office. Such a request requires, inter alia, that a sector inquiry has previously been conducted into the sector. For this reason alone, the new notification requirement will not affect many deals.

As a result, in the future, only large exits will require prior notification to the Federal Cartel Office. In contrast, the simultaneous or gradual transfer of large share packages to various investors will still be subject to the pitfalls of merger control. For example, the involvement of a large strategic investor and a large financial investor means that a transaction easily exceeds the turnover thresholds for merger control.

Better Access to Large Companies' Data

Further innovations introduced by the amendment are rights to access data under competition law. Companies with a dominant market position must provide data “when the grant of access is objectively necessary to be active on an upstream or downstream market and the refusal to grant access threatens to eliminate effective competition on this market.” Even if a company does not have a dominant market position, it must provide access to the data if another company is dependent on that data for its activities and that other company would otherwise be unfairly impeded.

In both cases, access must even be given to data that has never been utilised before. In any case, the interests of the data owner must also be taken into account: It can put forward objective reasons to justify its refusal to provide access – such as with respect to personal data under the GDPR. And it can require compensation for access to the data.

The new data access rights might be a real game-changer for some start-ups. Innovative, data-driven business models could tap into unused data reservoirs or combine various external data sources.

But let’s be realistic: Start-ups will still have to overcome some difficult obstacles before they can enforce their rights. Many large companies will not be willing to grant access to their data. Until the courts have provided clear guidelines, only start-ups that have a significant financial buffer will have a real chance of getting access to data under competition law. Rights of access under specific laws, such as those under PSD2 (Payment Services Directive 2015/2366) for FinTechs, therefore remain important.

Christoph Heinrich

Cathleen Laitenberger

In order to continue operating on the German market, investment firms and asset management companies domiciled in the United Kingdom will henceforth require a licence from BaFin or another supervisory authority of a member state of the European Economic Area (EEA). However, a prerequisite for the granting of such a licence is that the enterprise has its registered office in a member state of the EEA.

Joel F. Schaaf

Dr. Christoph Schmitt

A full analysis of the 10th Amendment to the German Act Against Restraints of Competition would exceed the scope of this contribution which is thus limited to the changes in digital economy.^[1]

1. Objektive

The objective of the 10th Amendment to the GWB is, as mentioned, to improve the regulatory framework for the digital economy. The draft law takes up in particular proposals of a study commissioned by the BMWi on the reform of abuse control as well as the work of the Commission on Competition Law 4.0. The Federal Government thus intends to regulate the rapidly developing and adapting market of the digital economy more effectively in terms of fair competition and consumer protection. But does the Amendment itself meet this requirement?

Modern digital economy is characterised by direct and indirect network effects, intermediary power, interoperability up to and including "tipping" and their interactions, which poses ever-increasing challenges for the competition authorities in their monitoring of abuse. It is clear that there is a need for regulation.

In future it should be easier for the German Federal Cartel Office (Bundeskartellamt, BKartA) to take action against companies in the digital economy, especially the large digital groups such as Google, Apple, Facebook, Amazon and Microsoft (also referred to as "GAFAM" as so-called "Géants du Web"), in cases of abuse of market power. To date, the BKartA has not been able to determine the market power in particular of digital platforms satisfactorily without taking into account the importance of information in this sector. How this is now to be achieved is presented for the first time in the proposed legislation.

2. Planned Amendments

The planned amendments to the provisions of the GWB concern abuse control of large digital groups, the powers of investigation and sanctions by the cartel authorities and merger control.

2.1 Supervision of Digital Groups of Outstanding Cross-Market Relevance

Probably the most significant proposed innovation for the digital economy is the insertion of section 19a GWB. In section 19a para. 1) sentence 2 GWB, non-exhaustive criteria for the determination of a company's outstanding cross-market importance in competition are mentioned.

Access to information relevant for competition is now also taken into account in addition to the dominant position of a company. Thus, the specific role of data and information is to be intentionally emphasized. In addition, the number of users and a possible power of intermediation, i.e. the possibility of controlling search queries and directing them to specific offers by means of one's own intermediary position, must also be taken into account. This should enable effective action to be taken against digital groups which have an advantage over their competitors, in particular due to network effects and large data resources.

In the event that a company is found to be of overriding market-wide relevance, the BKartA can prohibit such companies ex-nunc according to para. 2.:

• to treat the offers of competitors differently from its own offers when providing access to procurement and sales markets (so-called self-preference);
• to hinder competitors in a market where the company can quickly expand its position - even without a dominant position - for instance on the basis of data/information relevant for competition;
• to transfer its market power from one market to another market not (yet) dominant by using existing information, thereby establishing or strengthening barriers to market entry;
• to impede data portability;
• to provide other companies with insufficient information about services rendered or requested, or to make it difficult for them to assess the value of such services.

A particular gain in effectiveness resulting from section 19a GWB as compared with sections 19 and 20 GWB derives from the reversal of the burden of proof. Once the BKartA has established that a company has an outstanding cross-market position, a disputable presumption of abusive conduct is to be made. Thus, it is up to the company concerned and not to the BKartA, as in the cases of sections 19 and 20 GWB, to positively establish misconduct. This consideration results from the fact that the reasons for justification regularly come from the sphere of the company, for example from internal strategy papers.

2.2 Importance of Data Access

Of particular relevance to digital companies is the question of how data and information relevant for competition can be obtained. Under the new version of section 1  para. 2 no. 4 GWB, a refusal of access to data, interfaces or networks can constitute a reason for the abuse of market power. A lack of interoperability of products is often the cause of increased network effects (so-called lock-in effects), which can ultimately represent a high switching hurdle at the expense of competitors.

The new provision takes effect if it is impossible for the party seeking access to data, interfaces or networks to collect or acquire certain data that is essential for it. This way the Essential Facilities regime is extended to access to data and as a result only represents a clarifying adaptation to Union law.

In the area of companies with relative or superior market power, the modification of section 20 GWB, in the form of a new sub-section 1a, sentence 1 to be inserted, now puts into concrete terms dependency within the meaning of section 20 para. 1 GWB by including data access. This makes it clear that even dependence on a database available to a company below market dominance can constitute an unfair impediment.

Furthermore, up to now it has been questionable whether a company can demand data access if relatively strong data owners in the market have not yet shared the data, which is essential for the company concerned, with anyone, i.e. if there is no business transaction with this data. Such a right to data access is now introduced by the proposed section 20 para. 1a) sentence 2 GWB.

2.3 Simplified Conditions for Interim Measures

The extended powers of the BKartA are to be flanked by the facilitated possibility to order interim measures under section 32a. This takes account of the fast-moving nature of the digital economy due to self-reinforcing effects and the easy scalability of the offer.

The previous regulations were considered unsuitable for practice due to the conditions for their application. For instance, it was difficult to prove the necessary jeopardizing situation in the form of irreparable damage to competition at the time when the adoption of a provisional measure was considered. It is now provided that the emergency measure must be necessary either to protect competition or to prevent imminent serious harm to another undertaking. It is assumed that actual serious harm to an individual market participant will be easier to prove than harm to competition.

3. Assessment

The draft contains interesting approaches and ambitious proposals for solutions for all parties concerned - businesses, BKartA and consumers. However, it remains to be seen whether they will be adopted in this form by the German Parliament and Council and will lead to changes in practice.

Hence, it first has to be ascertained to what extent the regulations on data portability and data use will help both competitors and consumers to exchange more data.

In addition, particular attention must be paid to the question of whether the BKartA will really take action against large digital groups - including through interim measures - and whether this action will strengthen competition in digital economy. In any case, it should be noted that with the proposed innovations Germany is presenting a blueprint for dealing with the challenges of digital markets for other countries as well. It may already become apparent during Germany's current EU Council Presidency whether these impulses will also lead to a coordinated strategy of the Member States at European level in dealing with digital companies. In its main report, the Monopolies Commission made proposals for the regulatory framework at European level. ^[2]

However, the United Kingdom will soon pursue its own path in competition law and will also break new ground here.^[3]

Ramona Tax

Dr. Rainer Bierwagen

[1] Additional changes: Higher thresholds for merger control, modernisation of the calculation of sales, breach of the principle of self-assessment, simplification of the calculation of fines, legal embedding of the leniency programme, codification of a disputable presumption of antitrust damages. See the German Federal Cartel Office's statement on the amendment to the GWB (25 February 2020) at LINK

[2] See LINK

[3]See CMA, Online platforms and digital advertising (Market study final report / July 2020), LINK 

Both sides expect a significant growth in trade between the EU and ‑ with a population of almost 100 million ‑ the third largest ASEAN country, after Indonesia and the Philippines. It is therefore worth examining whether and what advantages the Agreement offers. The following overview and the Guide by the Delegation of the European Union to Vietnam, as well as the Commission's website provide details.

Trade in Goods

The biggest improvement of the current situation is the reduction of tariffs, with tariff reductions being partly immediate, but for virtually all products gradually over a seven to ten-year transitional period, until 99 percent of all tariffs are eliminated altogether, see Chapter 2 of the Agreement. Depending on the importance of a product or category of products, tariffs are eliminated more or less quickly. More than 60 percent of mutual exports can be imported duty free immediately. Consequently, almost all EU exports of machinery and appliances into Vietnam will be fully liberalised at entry into force of the FTA. For the automotive industry, customs duties will be gradually removed over the next ten years for passenger cars. Car parts will be duty free after seven years. In addition, 70 percent of EU chemicals exports will no longer be subject to customs duties in Vietnam with immediate effect.

The customs duties apply to goods manufactured in the respectively other customs territory. The UK will no longer be part of the Agreement from January 2021 unless further agreements are concluded. The rules of origin of the Agreement are based on the EU rules of the Generalised System of Preferences (GSP) towards developing countries. However, the sometimes detailed rules must be strictly observed and the origin of a product must be proven, in the best case by means of the simplified self-certification procedure for registered exporters.

With regard to the discussion on supply chains, manufacturers and traders will be pleased to note that Vietnam has undertaken to ratifying and implementing fundamental conventions of the International Labour Organisation, banning child and forced labour, and implementing further regulations on climate, species and environmental protection.

Government Procurement

Another benefit for European companies is that they are given better access to public procurements. This is particularly important because Vietnam is making great efforts to improve its infrastructure. For details, see Chapter 9 and the Annexes to the Agreement.

Services

Under the Agreement, Vietnam undertakes to substantially improve access for EU companies to many service sectors, including environmental services, postal and courier services, banking, insurance and maritime transport. It also includes a provision allowing for a later integration into the EU-Vietnam Free Trade Agreement of further liberalisation agreed in future trade agreements with other countries. For details, see Chapter 8 and the Annexes to the Agreement.

Investments

In addition to the rules on investment in Chapter 8 of the FTA, an investment protection agreement was signed in Hanoi on 30 June 2019. The investment protection agreement must first be ratified by all member states in accordance with their respective national procedures before it can enter into force. Only after ratification will it replace the bilateral investment agreements currently in place between 21 EU Member States and Vietnam.

Dr Rainer M. Bierwagen

Under the name "Next Generation EU", the EU itself will borrow, for the first time, EUR 750 billion which will be allocated to different programmes. The major part will be allocated to the recovery plan. Some of the financial resources will consist of non-repayable grants, while the rest will consist of loans and guarantees.

This first borrowing by the EU will be limited in time and will be in addition to the normal long-term budget for the years 2021 - 2027. The long-term budget will amount to EUR 1,074.3 billion in constant 2018 prices. The distribution of the funds has remained highly controversial until recently.

What exactly is at stake? On the one hand, the size, content and financing of the budget allocated to the European Union. On the other hand, mutual aid for the recovery of the regions and economic sectors most affected by the pandemic. And for a third, it is about investing in the future. All issues are intertwined and require fundamental political decisions to be taken. As regards the recovery plan, it is not only a question of the amount and geographical distribution of the funds, but also of whether and how much money will be given in the form of grants, loans or guarantees and, equally important, what conditions and controls will be agreed. With regard to the multiannual financial framework, it is about the financial resources granted to the EU and their growth, despite the departure of Great Britain, and the distribution of resources between the tasks assigned to the EU. Finally, the aim is to put society and the economy on a more sustainable path which must be taken into account in all plans and expenditure.

The meetings were chaired and prepared by the President of the European Council, in this case for the first time by the Belgian Charles Michel, who will hold the Presidency for a period of two and a half years. The meetings were the longest European Council meetings to date, which should come as no surprise given the political choices and the different interests of the countries and their politicians.

Financial Resources for "Next Generation EU"

Several programmes are grouped together under the title "Next Generation EU". The largest programme involves support for member states in investment, reform, reconstruction and crisis management. The second is to boost the European economy and stimulate private investment capacity with a new solvency aid instrument. Finally, strategic challenges facing Europe will be addressed, with three main priorities: a new health programme "EU4Health", Union civil protection "rescEU" and "Horizon Europe".^[1]

These include, with the amounts now agreed

• Recovery and Resilience Facility (RRF) EUR 672.5 billion

• ReactEU: EUR 47.5 billion

• Horizon Europe: EUR 5 billion

• InvestEU: EUR 5.6 billion

• Rural Development: EUR 7.5 billion

• Just Transition Fund (JTF): EUR 10 billion

• RescEU: EUR 1.9 billion.

The reconstruction fund is of particular importance.

The Reconstruction or the Recovery and Resilience Facility, (RRF)

The President of the European Council, the Belgian Charles Michel, proposed the following key features on 10 July 2020:

1. Scope of the Reconstruction Fund: The European Commission is raising funds of up to EUR 750 billion on the capital market which will be used for back-to-back loans and for expenditure under the programmes.
2. Loans and financial assistance: Half of the Reconstruction Fund is to provide loans and guarantees and half direct financial aid.
3. Allocation of the Recovery and Resilience Facility: The money is to be allocated to the countries and sectors most severely affected by the crisis, and two thirds of the funds are to be spent in 2021 and 2022.
4. Management and conditionality: The affected member states are to draw up national reconstruction and resilience plans for the period 2021 - 2023 in accordance with the European Commission's country-specific recommendations on economic and financial policy. The plans would be reviewed in 2022 and approved by the Council by qualified majority on a proposal from the Commission. One third of the funds are to be used for climate-related projects.

For its part, the Commission had already made proposals, and the European Parliament had^[2] demanded that the EU member states make more funds available to the EU in order to meet current challenges and steer the EU towards the future.

The heads of state and government agreed on a volume of EUR 672.5 billion, of which EUR 360 billion will be provided as loans and EUR 312.5 billion as non-repayable grants. The distribution of the funds largely reflects the Commission's proposal.

The Standard Financial Resources of the European Union or the Multiannual Financial Framework

The long-term EU budget, Multiannual Financial Framework (MFF), defines how much money the EU can invest in different policy areas over a certain period of time. The European Commission presented its proposal for the EU budget for the years 2021 - 2027 in May 2018 and in May 2020 in a revised Version. The future EU budget 2021 - 2027 of the European Commission provides, among other things, for modernising the financial framework and adapting it more closely to the EU's priorities and to new common challenges. All key issues - such as migration, climate protection, digital innovation and research - are politically explosive topics.^[3]

The original objective of reaching an agreement on the EU budget 2021 - 2027 by the end of 2019 was not achieved. This was due to differences of opinion on the overall size of the budget and the Brexit. The consultations on the budget have traditionally been very controversial, with different coalitions, largely depending on the issue at stake.

One particularly controversial issue is the temporary increase in the cap on own resources from 1.4 percent to 2 percent of the EU's gross national income. The member states contribute to the Union's budget in varying degrees depending on their gross national income. This contribution, plus value added tax, amounts to about three quarters of EU revenue . Other sources of revenue include fines resulting from violation of unfair competition law by companies and customs duties on imports from outside the EU.

President Charles Michel had submitted two proposals. His last proposal was:

1. A budget of EUR 1,074 billion over seven years to meet the EU's long-term objectives.
2. The historic flat-rate rebates for Denmark, Germany, the Netherlands, Austria and Sweden would be preserved.

The heads of state and government agreed on an amount similar to the one proposed. However, there will be reallocations between the amounts budgeted for the policy areas.

Other Parameters for the Budgets

Expenditure should be consistent with the EU's objective of climate neutrality for 2050, the EU's climate change objectives for 2030 and the Paris Convention.

Finally, expenditure should be dependent on respect for the rule of law and European values.

The Time Schedule

EU budgets require unanimity in the Council and the consent of the Parliament. The member states and the European Parliament should agree on the recovery plan as soon as possible so that it can be implemented. The same applies to the MFF which should be adopted at least before the end of the year. Should the budget not have been adopted at the beginning of the new year, only one twelfth of the appropriations entered in the budget of the previous year may be spent each month (twelfth rule).

Dr Rainer M. Bierwagen

Dr Dietmar O. Reich

[1] edic-md.eu/next-generation-eu/.

[2] See, for instance, Speech President Sassoli's speech press information and the press information of the Parliament, Debate on EU budget and recovery plan: "Council agreement will not be the last word".

[3] www.auswaertiges-amt.de/de/aussenpolitik/europa/wisofin/finanzrahmen/mehrjaehriger-finanzrahmen/210030 .

On the very same day, the Commission proposes a package of measures to achieve a fairer taxation. The measures are aimed at boosting tax fairness; the fight against tax abuse, unfair tax competition and for increasing tax transparency will continue.^[2]

As regards the judgment, one should note that the GC does not deny the Commission's competence to challenge tax benefits granted to companies but criticizes the Commission's factual reasoning of the advantage as "not succeeding in showing to the requisite legal standard".

The European Commission had assessed the tax payment agreements between Ireland and the technology corporation in 2016 as unlawful state aid. The decision stated that Ireland should retroactively collect taxes from Apple for the years 2003 to 2014. Ireland had refused to claim the underpaid amount for 19 months before complying with the demand of the EU Commission to avoid infringement proceedings.

The case had begun together with the examination of state aid in favour of companies like Apple (Ireland), Starbucks (Netherlands) as well as Fiat Finance (Luxembourg) where the Commission had reviewed transfer pricing agreements between companies and the Member State concerned. Despite not being competent for direct taxation, the Commission's right of pursuing unfair advantages using state aid law was once again confirmed and thereby reinforced.

The Commission analyses whether decisions of the tax authorities on the amount of corporate income tax to be paid are in compliance with EU state aid rules. In advance tax rulings, the tax authorities "explain" to individual companies how the corporate tax they pay is calculated or how certain tax rules will be applied in their case. Tax decisions may constitute state aid within the meaning of EU rules if they selectively favour a particular company or group of companies.

The Commission has examined the Irish calculations used to determine the tax base and came to the conclusion that the taxable profit was underestimated, which unduly favoured the companies concerned by reducing their tax burden, granting them selective benefits. In the cases involving Apple, Starbucks and Fiat, the countries and the companies concerned applied to the European General Court requesting the Commission's decisions to be annulled.

In the Starbucks case (Kingdom of the Netherlands vs Commission and Starbucks Corp. and Starbucks Manufacturing EMEA BV vs Commission, Cases T-760/15 and T-636/16, ECLI:EU:T:2019:669)^[3], the General Court annulled the Commission decision of 21 October 2015, holding that the selective advantage to Starbucks was not proven.

In the Fiat Chrysler case (Grand Duchy of Luxembourg vs. Commission and Fiat Chrysler Finance Europe vs. Commission (Cases T-755/15 and T-759/15, ECLI:EU:T:2019:670) ^[4] the General Court upheld the Commission decision of 21 October 2015. The judgment of 24 September 2019 is under appeal (Cases C-885/19 P and C-898/15 P).

In Apple's case, the Commission considered that almost all of the company's profits were internally allocated to "administrative headquarters". The respective "administrative headquarters" were only fictitious and could not have generated such profits. According to the Irish legislation in force at the time, these profits were not taxed at all. This in turn would have resulted in the Group paying only 1 percent tax on its profits in Ireland in 2003. By 2014, it would have fallen further to 0.005 percent. Thus, the company paid only 50 euros in taxes on a profit of one million euros.

Other companies also maintain branches in different countries with the aim of avoiding as many tax payments as possible overall and several EU countries such as Ireland, Luxembourg and the Netherlands attract companies with particularly low corporate tax rates. The idea of a local subsidiary licensing intellectual property from another subsidiary abroad is also very popular. The costs involved compensate the locally generated profits and thus allow them to be taxed in a third country, which can be a tax haven such as Bermuda or Jersey. For its part, Ireland fears that it will become less attractive as a location for large companies if the tax framework has to change.

Apple insisted in the lawsuit that the company had paid 20 billion dollars in taxes in the USA during the period in question, since that is where the value creation took place.

Aid is only deemed to exist if the company in question was granted a benefit that other companies in the same situation did not receive. The Commission must prove this.

In their application for annulment of the Commission decision, Ireland and Apple, put forward 12 pleas in law alleging, in particular, that the Commission committed manifest errors of assessment by failing to correctly understand Irish law and the facts and that it made manifest errors of assessment in its assessment of the aid.^[5]

As stated above, the General Court annulled the decision on factual grounds. This is not necessarily the end of the litigation. The Commission can appeal the judgment on grounds of law. Or it can take another decision, revising the factual reasoning.

The Commission's Executive Vice-President Margrethe Vestager wrote: "The Commission will continue to look at aggressive tax planning measures under EU State aid rules to assess whether they result in illegal State aid. At the same time, State aid enforcement needs to go hand in hand with a change in corporate philosophies and the right legislation to address loopholes and ensure transparency."^[6]

Dr Rainer Bierwagen

[1] Court press release in English and French language at curia.europa.eu/juris/document/document.jsf.

[2] Commssion press release at ec.europa.eu/commission/presscorner/detail/en/ip_20_1334

[3]curia.europa.eu/juris/document/document.jsf.

[4]curia.europa.eu/juris/celex.jsf.

[5]curia.europa.eu/juris/document/document.jsf

[6]ec.europa.eu/commission/presscorner/detail/en/statement_20_1356

Companies are struggling with the economic consequences of the coronavirus pandemic. Generally, they do this alone, in coordination with their customers, suppliers and banks. They shy away from cooperation with competitors, as cooperation can be associated with antitrust risks. A large potential for crisis management thus remains unused, because no one knows the entrepreneurial challenges and the actual economic effects of the coronavirus pandemic better than the competition.

The automotive industry demonstrates now how the economic consequences of the coronavirus pandemic can be cushioned by a cooperation of competitors across industries, with the approval of the cartel authority. The Federal Cartel Office supports

• Measures for a coordinated resumption of automotive production. In order to establish the framework conditions for a restart of production, for example the re-opening dates of car manufacturers and tier 1 suppliers are planned to be published on an association website. A best practice guide will propose industry-wide measures to avoid misallocation of resources.

• A model for the coordinated restructuring of suppliers. The focus is on the formation of stakeholder groups of a supplier threatened by the crisis. Customers of this supplier can then share information among themselves and with other stakeholders (owners, banks) about the liquidity, credits, aid measures or even operational problems of a company and develop effective restructuring measures in a short time.

Accompanying measures are intended to ensure that this industry-wide cooperation between competing companies is admissible under antitrust law. They include in particular

• Their temporary nature. The cooperation between competitors is limited in time to the phase of coping with effects of the coronavirus crisis.

• The principle of voluntariness. Manufacturers remain free to decide when and to what extent to resume production. Suppliers are not obliged ‑ beyond existing contractual obligations ‑ to reach certain delivery volumes.

• No exchange of company-specific competition-related information. Data may be exchanged in aggregated form. The same applies to the disclosure of part prices and quantities.

• The formation of Clean Teams. The exchange of information is limited to certain persons within the companies who are subject to confidentiality obligations and are not allowed to participate in purchasing negotiations with the respective supplier for a certain period of time.

• The establishment of Chinese Walls, especially with regard to distribution.

The coronavirus does not give a carte blanche for restrictions of competition. So, please, no flying blind through antitrust issues. Still, the courage to cooperate with competitors in a controlled manner can be worthwhile. Such cooperation can significantly strengthen the own efforts to cope with the economic consequences of the coronavirus.

Dr Christian Heinichen

Christoph Heinrich

The aim of the bond purchase programme launched is to promote consumption and investment and at the same time inflation by increasing the money supply. The ECB purchases government bonds and similar marketable debt instruments issued by the central government of a Euro Member State, "recognised institutions", international organisations and multilateral development banks based in the Euro area. The bond purchase programme is part of a general asset purchase programme and accounts for the bulk of the purchases.

The Federal Constitutional Court criticises not only the European Central Bank but all those involved and especially the "supervisors". The most stringent accusation is directed at the ECB: The European Central Bank had neither examined nor demonstrated in the decisions adopted for the introduction and implementation of the PSPP that the measures taken in this regard were proportionate. The German federal bodies do not come off any better: The Federal Government (Bundesregierung) and the Federal Parliament (Bundestag) should have recognised the failure to present and examine and taken action against it. This further accusation addressed to the federal bodies allows the Federal Constitutional Court to establish a violation of Article 38.1 sentence 1 in conjunction with Article 20.1 and 20.2 in conjunction with Article 79.3 of the German Constitution (Grundgesetz, GG).

How does the Federal Constitutional Court circumvent the judgment of the Luxembourg colleagues on the Governing Council's decisions concerning the programme and its amendments? The Court remains in line with its previous case-law and judges the ECB decisions as exceeding its powers.

In very clear terms, the ECJ is accused of having disregarded the actual effects in the proportionality test and of having failed to take an overall evaluative view, contrary to the methodological approach of the Court of Justice in almost all other areas of the Union's legal system. The violation of the principle of proportionality had to be taken into account for the allocation of competences.

Dr. Rainer Bierwagen

Dr. Dietmar O. Reich

National solo actions endanger the economy and the freedoms gained

The corona pandemic puts a heavy strain on the four fundamental freedoms (of movement of goods, persons, services and capital) and the achievements of the Single Market for 450 million citizens in 27 EU countries. One country after another is introducing border controls and entry restrictions that restrict the free movement of goods and prevent travel. Irrespective of whether travel restrictions actually help to prevent infections, the European Commission was thus forced to propose the closure of the external borders, accept restrictions on freedom of movement within the Schengen Area, and introduce border management. Furthermore, national seizures and export bans on personal protective equipment caused irritation and led to intervention by the Commission.

In many cases, the interventions can be explained by national politicians seeking to raise their profile and distinguish themselves rather than by rational, coordinated action as is evidenced by the patchwork of measures in Germany and by the fact that seasonal workers were finally allowed to enter the country. In Germany alone, around 100,000 harvest workers will be needed by the end of May, mainly from the eastern EU countries.

Minimisation of interference in the movement of goods and transport required

Border controls and entry bans lead to hindrances in the movement of goods and can bring it to a complete standstill. This was clearly visible at the internal borders between Germany and Poland, with queues of up to 60 km; the transport industry is familiar with this from the EU's external borders, for example with Turkey. Border workers between Germany and France or Germany and the Czech Republic suffer from entry bans that deprive them of their wages and companies of their contracts.

This is why the European Commission adopted Guidelines for border management measures to protect health and ensure the availability of goods and essential services on 16 March 2020.

The transport of goods should not be obstructed by control measures and in particular goods, especially essential goods such as food, should remain available, I.2. of the Guidelines. This includes the possibility of professional travel to ensure the transport of goods and the provision of services, such as for transport workers, I.3. of the Guidelines. Restrictions on the movement of goods and passengers on grounds of public health must be transparent, duly motivated, proportionate, relevant and mode-specific to the respective transport mode and non-discriminatory, I.3. of the Guidelines. Member States should designate priority lanes for freight transport (e.g. in the form of so-called green lanes) and consider waiving existing weekend bans.

The Commission will publish the restrictions on transport on a separate Page of its own. See also the Information of the German Ministry of Transport.

Free movement should be maintained for all goods and should not be subject to restrictions. In particular, the border crossing of essential goods is to remain guaranteed and so-called green lanes, i.e. special lanes for supply transports and trucks, are to be introduced in order to prevent or at least minimise any impairment of supply chains at the temporarily reintroduced border controls. This applies in particular to all relevant crossing points within the trans-European transport network (TEN-T network).

Checks should be limited to the minimum necessary, drivers should not leave their vehicles if possible and should themselves have little contact with the control staff. For the transport of goods that are legally circulating in the EU Single Market, no additional certificates should be required to cross the borders.

The fact that national interests always prevail over common European interests can be seen from the Cabotage Rules and export bans. The current restrictions on foreign carriers should not be enforced until autumn in order to ensure that the supply chains of industry and trade are able to function. In Germany this only applied for one week.

As already stated, national seizures and export bans on personal protective equipment caused irritation and led to intervention by the Commission. There is now an EU-wide regulation on exports of personal protective equipment, VO 2020/102, and Guidelines on its application. In Germany the responsibility for this lies with the BAFA.

Extensive travel restrictions within the Single Market and with third countries

As mentioned above, the European Commission felt compelled to propose the closure of the external borders to suggest, accept restrictions on freedom of movement within the Schengen Area and introduce border management.

The guidelines, published on 16 March 2020, provide for the extensive closure of the EU's external borders, restrictions on entry and health checks on travellers.

They also discourage EU citizens and other people living in the enlarged EU area from travelling abroad. The "enlarged EU area" includes all Schengen countries (plus Bulgaria, Croatia, Cyprus and Romania) and the four Schengen associated countries (Iceland, Liechtenstein, Norway and Switzerland). It also includes Ireland and the United Kingdom to the extent that they join these measures.

Many of the entry bans that are still in place can be replaced by less restrictive measures and are therefore not compatible with the rules of the Schengen Area and the EU Single Market. The Schengen Area celebrated its 25^th anniversary on 26 March 2020. It was not until 1995 that border controls were abolished between seven countries - Belgium, France, Germany, Luxembourg, the Netherlands, Portugal and Spain. Today the Schengen Area comprises a total of 26 states: 22 EU Member States and the non-EU members Iceland, Liechtenstein, Norway and Switzerland. In addition to the abolition of checks on persons at the internal borders, the agreement also provides for enhanced police and judicial cooperation, a common visa policy and common rules for checks at the external borders.

Dr Rainer Bierwagen

It is against this background that Germany formally submitted amendments to the national investment control rules to its parliament, that France created a special investment fund and that the EU Commissioner for competition intimated in an interview that EU countries could build up stakes in important companies.

Germany

As regards Germany the submission of draft amendments to the parliament by the German Federal Ministry for Economic Affairs and Energy (BMWi) follows the ministry's review of the national framework for investment control and the enactment of the EU-wide framework for investment control. The BMWi had presented its concept for an “Industrial Strategy 2030 - Guidelines for a German and European Industrial Policy” in spring of last year and published a first set of draft amendments early this year. (See our Blogs "Germany will Increase the Screening of Foreign Investments" and "Strengthening of Investment Controls in Germany".

In Germany, the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG) and the German Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV) form the legal basis for the control of foreign investments. Such an investigation can result in the prohibition or approval of a certain transaction, where necessary, provided that further requirements and legal obligations are fulfilled. German foreign trade law has been reformed several times in the past years.

The most recent amendment is the Twelfth Amendment of the German Foreign Trade and Payments Ordinance, which was adopted on 19 December 2018 and lowered the shareholding threshold for acquisitions from non EU/EFTA countries from 25 % to a minimum of 10 %: Investments in areas relevant to security and defence now require examination when this 10 % threshold is exceeded (see our Blog "Germany`s Tighter FDI Regime and the EU`s Path to Uniform Standards"). The draft amendment of the German Foreign Trade Act should now lead to more specific rules and potentially to the strengthening of the control of investments.

European Union

In addition, the draft amendments implement the EU screening regulation. Within the EU, the control of foreign investment remains a national matter. Until the entry into force of the EU regulation, foreign investments have not been examined in all EU Member States, the national assessment criteria differ a lot and they do not necessarily take the interests of other EU Member States and the EU into account.

Over the last years, a framework for the assessment of direct foreign investments in all countries of the EU was developed and adopted in March 2019 (Regulation (EU) 2019/452 of 19 March 2019 (EU Screening Regulation) – see our Blog "New EU Uniform and Stricter Standards for Screening Foreign Investments"). This Regulation aims to safeguard the security or public order as well as the strategic interests of the entire European Union, by requiring the EU Member States to create the framework for the assessment and control of foreign direct investments in key sectors and in relation to critical infrastructure, and to cooperate with other EU Member States and the European Commission when carrying out their screening.

Legally unrelated but politically connected are the remarks made by Commissioner Vestager in a recent interview with the Financial Times with the tacky title "Vestager urges stake building to block Chinese takeovers". The Commissioner emphasizes that EU Member States may act as shareholders in companies and that this may constitute a means to fend off foreign takeovers. France has already created a fund with the French bank BPIFrance called Lac d'Argent or Silver Lake.

In the wider context, we can also mention the revival of plans to strengthen the rules that govern procurement.

1.) Draft amendments to the German Foreign Trade Act

The German draft amendments aim to provide the German investment control regime with an efficient tool for protecting the public order or security in case of critical acquisitions by investors from non-EU/EFTA countries. At the same time, however, the BMWi considers it important to find a balance between protecting public order or security on the one hand, and not endanger the attractiveness of Germany as an investment location on the other. By taking the following important points into account, the BMWi is trying to do justice to this balancing act.

a) New approach to the "degree of risk" requirement

According to the current legal framework, restrictions or commitments may only be imposed if the acquisition poses an "actual danger" to the public order or security of the Federal Republic of Germany. Instead of an "actual threat", a "probable impediment" of public order or security will be sufficient in the future. According to the draft law, this requirement will also not be limited to the Federal Republic of Germany and will allow investment controls which are affecting public order or security of another EU Member State or in regard to projects and programmes of EU interest within the meaning of Article 8 of the EU Screening Regulation.

b) Extension of the ban against implementing the acquisition before clearance

Under current administrative practice, investors may complete their acquisition even before the acquisition’s investigation has been completed. As a result, the relevant authority is faced with a fait accompli before the investigation is concluded, undermining the sense and purpose of the investigation. The draft seeks to prevent this by extending the suspension effect until the completion of the investigation – including any cross-sector investigation.

c) Establishment of a National Liaison Office

Besides the amendments of the purely legal nature, the draft’s intention is to establish a national liaison office within the BMWI as part of the EU-wide cooperation mechanism. The liaison office is supposed to serve as the German link between national and European bodies in order to ensure the exchange of information throughout the EU.

2.) Other Planned Amendments

The second step will consist in amending the German Foreign Trade and Payments Ordinance in order to determine which technologies are "critical" so that a shareholding of just 10 % will trigger a notification requirement and a possible investigation. Such technologies are expected to include artificial intelligence, robotics, semiconductors, biotechnology and quantum technology.

3.) Conclusion

The declared objectives of the draft law are to make the German investment control procedures more effective and to provide more specific rules for exercising this control. Whether the amendments will actually achieve the first objective is still a controversial issue. One criticism is that the regulation’s wording is too broad and unclear. Other interested parties consider that the rules are not wide-reaching enough. One consequence is certain: The number of foreign investments to be screened will significantly increase.

Dr Rainer Bierwagen

The body granting the aid^[1] may now consider the following options:

The structuring of the support measure without aid element according to Article 107 (1) TFEU (see under 1), the use of the exceptional circumstances (see under 2) or the notification and approval by the European Commission. For the latter, a "Temporary framework" has recently been created which accelerates and simplifies the approval of a large number of aid measures by state authorities (see under 3). On 30 March the Commission published a proposal to extend the framework by five additional measures.

For applicants, the nature of the support has significant implications in terms of rapid and smooth payment.

1. Support without an aid element under Article 107 (1) TFEU - "no-aid measure"

The concept of aid under Article 107 (1) TFEU has four cumulative prerequisites. They are measures granted by the state or through state resources which selectively favour certain undertakings or sectors of production and thereby distort or threaten to distort competition and affect trade between member states. If one of these elements is removed, the measure does not fall under the state aid regime pursuant to the TFEU. ^[2]

Financial support from EU or national funds for public health services or other public services to address the COVID-19 situation, based on the principle of solidarity, is not subject to state aid control. The same applies to any public financial support granted directly to citizens. State support measures which are available to all companies and which do not involve a selective advantage, such as wage subsidies and the deferral of corporate and VAT taxes or social contributions, are not subject to state aid control and therefore do not require Commission approval under EU state aid rules. In all these cases, member state authorities can act immediately.

On 13 March 2020, the Commission has published a Communication on a coordinated economic response to the COVID 19 pandemic' which explains the different options. For example, member states may introduce generally applicable adjustments in favour of companies (e.g. tax deferrals or subsidies for short-time work in all sectors of the economy) which are not covered by the state aid rules. They can also compensate companies for losses incurred as a result of the outbreak of coronavirus.

2. Exceptions to the formal notification of aid

However, if the elements of aid according to Article 107 (1) TFEU are fulfilled, it has to be examined whether the measure can be covered by an exemption from the otherwise formal notification requirement under Article 108 (3) TFEU.

European law provides for a number of exceptions. For instance, the general Block Exemption Regulation ("AGVO") exempts aid from the formal notification procedure under certain circumstances. Only the granting of aid must be notified electronically.

The Commission has also introduced de minimis rules to reduce administrative burdens. For aid within the scope of application that does not exceed a certain maximum amount, Article 107 (1) TFEU is not applied under certain conditions due to the lack of an appreciable effect on competition and trade between member states. Subsidies to a company below certain thresholds resulting from the de minimis-Regulation (generally EUR 200,000 over a period of three fiscal years), which can be paid to almost all companies for various purposes, do thus not qualify as aid within the meaning of Article 107 (1) TFEU, are referred to as "de minimis aid" (strictly speaking, these are fictitious no-aid measures) and are exempt from notification. Again, there are exceptions to this rule. For instance, export-related activities are not covered by the de minimis rule. Special de minimis regulations and thresholds exist in the area of agriculture and fisheries. In the area of services of general economic interest (within the meaning of Article 106 (2) TFEU) the thresholds are increased to EUR 500,000.

3. Notification and temporary framework

If measures are considered which fulfil all the characteristics of aid under Article 107 (1) TFEU and, moreover, are not covered by any exemption, the European Commission may authorise such aid provided that it is compatible with the single market. Support measures in the field of regional development, energy and environmental policy or research may be approved under certain conditions. Aid must be notified to the Commission under Article 108 (3) TFEU. It may be declared by the Commission to be compatible with the single market if one of the conditions laid down in Article 107 (3) TFEU is fulfilled. The Commission has a wide discretion in this regard. Aid, on the other hand, is necessarily considered compatible with the single market if one of the categories under Article 107 (2) TFEU is fulfilled.

In the case of individual aid, the existence of these characteristics must be assessed in relation to a specific measure; in the case of an aid scheme, the Commission may confine itself to demonstrating that its general characteristics fulfil the conditions of an aid. It is therefore not necessary to assess each individual case of application. Nevertheless, approval takes several months, sometimes more than a year, from the date of notification.

The temporary aid framework which has now been adopted makes an exception to this rule and makes use of the approval criteria provided for in Article 107 (3) (b) TFEU and Article 107 (2) (b) TFEU, which are of little practical relevance under normal circumstances and are now subject to an accelerated assessment.

Article 107 (2) lit. b TFEU provides that "aids compensating for damage caused by natural disasters or exceptional occurrences" are compatible with the single market. On this basis, member states can support losses in sectors that have been particularly hard hit by the crisis (e.g. transport, tourism, culture and retail).

Article 107 (3) lit. b TFEU provides that "aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a member state" may be considered compatible with the single market. The temporary framework specifies the catalogue of measures:

3.1 Temporary framework of aid

To support the EU economy in the face of the COVID-19 outbreak, the Commission has adopted a temporary framework which allows Member States to make full use of the room for manoeuvre provided for in the current EU State aid rules and to take additional support measures. Notifications of aid schemes will be assessed much more quickly. The Commission authorises state aid cases seven days a week. A list of the aid schemes approved so far by the member states can be found at here..

This temporary framework provides for five types of aid that can be granted by member states:

• Direct subsidies, repayable advances or selective tax advantages to cover urgent liquidity needs up to EUR 800,000
• State guarantees for bank loans to companies so that banks can continue to provide loans to corporate customers with liquidity needs
• Loans at preferential interest rates
• Commitments to banks that pass on state aid to the real economy: Some member states plan to support companies - especially small and medium-sized enterprises - through the existing lending capacity of banks. In the temporary framework, it is clarified that such support measures are considered as direct aid to bank customers and not to the banks themselves and it explains how any distortion of competition between banks can be minimised.
• Short-term export credit insurance: The framework makes it easier for member states to demonstrate that certain countries cannot be regarded as countries with marketable risks, so that the state can offer short-term export credit insurance if necessary. The Commission has already made use of the additional option of temporarily removing countries from the list of "countries with marketable risks" (cf. Communication of the Commission of 27 March 2020, (2012/C 392/01)). This will allow member states to respond to the decreasing availability of private insurance capacity for exports in the current corona crisis by offering short-term export credit insurance from the state. 

The temporary framework is valid until the end of December 2020 and complements the above-mentioned possibilities for member states to mitigate the socio-economic impact of the coronavirus outbreak in accordance with EU state aid rules. To ensure legal certainty, the Commission will assess before the end of this period whether an extension is necessary.

3.2 Extension of the temporary framework in preparation (as of 1 April 2020)

On 27 March the European Commission forwarded to the member states a draft proposal to extend the temporary economic support framework adopted on 19 March 2020. The Commission aims to bring the amended temporary framework into force this week.

The Commission proposes five further measures: Support for coronavirus-related research and development, for the construction and expansion of test facilities, for the manufacture of products to prevent the spread of coronavirus (vaccines, medical supplies, protective material), targeted tax deferrals and/or deferrals of employers' social security contributions, and targeted support for workers in the form of wage subsidies.

Dr Rainer Bierwagen
Ramona Tax

^{[1] Not only the Member State itself, but also the bodies and institutions established by the federal states, local authorities or other public-law entities and institutions are state bodies within the meaning of Article 107 (1) TFEU.}

^{[2] Commission notice on the concept of State aid within the meaning of Article 107 (1) of the Treaty on the Functioning of the European Union (2016/C 262/01)}

The closing of national borders for the movement of goods can narrow the relevant markets under competition law and thus create market dominance, which did not exist when borders where still open. A company's market position can also be strengthened by the crisis as a result of competitors no longer being able to maintain their production or withdrawing from the market altogether. In addition, dependence due to scarcity, e.g. on one supplier, may lead to special responsibilities under the German rules for companies with so-called relative market power even where they lack market dominance.

Anyone with such market power must not abuse it. –If, despite this, a company still e.g. charges excessive prices, it risks an intervention by the antitrust authorities. Many antitrust authorities have already announced that they will critically examine price increases as a result of the crisis, in particular, for scarce goods, health care services and basic supplies. However, even in times of crisis not every price increase is an abuse of market power: Increased production costs, particularly as a result of the crisis, can legitimise corresponding price increases even by a company with market power.

Other prominent examples of abusing market power are refusals to supply and discriminations against suppliers or customers. However, crisis-related bottleneck problems can be an objective reason to justify a partial or complete refusal to supply or unequal treatment of business partners under antitrust law. This applies, for instance, to a preferential supply of regular customers compared to new customers. However, a dominant supplier of goods or services that are in short supply as a result of the crisis may still be obliged under antitrust law to scale selling, i.e. to supplying its customers according to their importance (e.g. according to the volume purchased in the last financial year). A preference for regular customers remains possible in this context, too.

Since the corona crisis does not suspend any obligations under antitrust law, the following applies in particular to crisis-related measures taken by companies with a strong market position in relation to suppliers and distributors: Review and document the admissibility of such measures under antitrust law in a self-assessment!

BEITEN BURKHARDT's antitrust lawyers also provide support for your company in the corona crisis. Please contact Dr Christian Heinichen or Christoph Heinrich.

Further support is available here in the "Corona Informationscenter" of BEITEN BURKHARDT.

Notification Requirements Remain in Place

Merger control notification requirements remain unchanged despite the corona crisis. No relief is to be expected in this respect, as politicians are already warning of a sell-out of the German economy in view of falling enterprise values.

Notification requirements are formalistically determined based on the participating companies' turnover figures in the last financial year. Interim sales declines are ignored just as much as red figures or even imminent insolvency of the target company. However, if the notification obligation is only triggered by the transaction value threshold, then a downward adjustment of the purchase price due to the crisis can eliminate the notification Obligation.

Anyone who is turning to minority shareholdings or co-investments in the current situation in order to minimize the capital investment should pay particular attention to a potential notification obligation: Even where a full acquisition would not be notifiable, such a transaction structure can trigger a notification obligation. This counter-intuitive result is due to the other shareholders or the co-investor also being taken into account in determining the notification obligation.

Advantages in the Competitive Assessment

While the notification obligation is based on the past, the competition authority's assessment is based on a prognosis for the future. A mere snapshot of the current situation is thus not decisive. Merging parties must therefore demonstrate why they will emerge particularly weakened from the crisis. Example: Competitors have significantly better online or take-away offers, are therefore currently gaining considerable market shares and will retain these after the current crisis due to consumers getting accustomed. In such cases, the corona crisis may facilitate mergers that would have been prohibited in the past.

The so-called failing firm defense could also become more relevant. Exceptionally, it allows even the creation of a dominant market position. However, it only applies if the prognosis for the continued existence of the target company is negative and if there is no potential purchaser that would pose less competition concerns (e.g. a financial investor). In addition, the exception does not apply to the sale of a mere company division.

Timing is a Challenge

The corona virus also affects the operating capacity of competition authorities. While the statutory review deadlines still apply in Germany, the Federal Cartel Office asks companies to submit notifications later where possible.* The EU Commission, the French competition authority and other international competition authorities have adopted a similar approach. More drastic measures were taken in Austria: For new filings, the review period does not start before 1 May 2020. The time schedules of transactions must be adjusted accordingly.

In practice, too, the competition authorities will make greater use of their tools to gain time, for example by making full use of deadlines, by objecting to incomplete information or by initiating an in-depth investigation. For more complex deals, the reasons for this will mostly not be attributable to the authority itself but rather to the delays in market investigations, e.g. when interviewing market participants.

This is all the more precarious in the current situation, as sellers depend on the purchase price flowing quickly and target companies depend on the acquirer being allowed to swiftly take over inoperable corporate functions.

Against this background, it is advisable to involve merger control experts at an early transaction stage, in particular, for deals that need to be closed swiftly due to the current crisis. These experts can then informally contact the authorities in advance in order to gain time. While theoretically possible, an application for an exception to the suspension obligation can only be a last resort, if at all.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

* Update of 29 April 2020: The Federal Government plans to extend the pre-examination period to two months and the main examination period to six months. The modification is to apply only to applications which have been/will be filed between 1 March 2020 and 31 May 2020 and which have not already been released prior to entry into force
 

Dr Christian Heinichen

Christoph Heinrich 

 

The corona crisis is causing legislators and public authorities to intervene in market developments. Their measures may limit or even eliminate companies' scope for competitive action. Manufacturers who are prohibited by law or by an administrative order from offering their goods outside Germany no longer have any scope for competitive action in this respect. If a manufacturer imposes corresponding contractual restrictions on its distributors, then these are of a declaratory nature, and are thus unlikely to give rise to antitrust concerns.

Crisis-related restrictions that manufacturers impose on their suppliers or distributors can also be exempted under antitrust law without such a strict legal requirement: For example, guaranteeing the security of supply may justify exclusive supply and purchase obligations. Temporary territorial exclusivity for the benefit of a customer is conceivable to the extent that it is necessary to open up or ensure the continued supply of a market. However, antitrust law demands to limit the scope of such restrictions on suppliers and distributors to the extent that is necessary to guarantee security of supply or to open up a market.

The prohibition of price fixing remains in force even in times of crisis. Anyone who fixes downstream prices for crisis-related scarce goods by imposing fixed or minimum resale prices on his distributors is violating the price fixing prohibition. Antitrust authorities have already announced that they will investigate price increases for goods in short supply due to the crisis. In such cases, hefty fines may be imposed. In contrast, maximum prices are still permissible. This allows the implementation of crisis-related sales promotions.

Since the corona crisis does not suspend any obligations under antitrust law, the following also applies to crisis-related measures in relation to suppliers and distributors: Review and document the admissibility of such measures under antitrust law in a self-assessment!

BEITEN BURKHARDT's antitrust lawyers also provide support for your company in the corona crisis. Please contact Dr Christian Heinichen or Christoph Heinrich.

Further support is available here "Corona Informationscenter" in the BEITEN BURKHARDT Informationcenter.

The coronacrisis does neither justify "crisis cartels" nor does it justify other hardcore restrictions of competition. The effects and risks of the corona crisis can, however, legitimise some forms of cooperation with competitors:

• Formation of bidding and supplier consortia if the companies concerned are not (any longer) able to meet a specific market demand on their own, e.g. because personnel or financial risks are no longer calculable due to the corona crisis.
• Joint purchasing to reduce and distribute risks in the supply chain.
• Purchases from competitors to compensate for production losses and legal restrictions on production as a result of the coronavirus.
• Joint production to save costs or generate efficiencies in the use of personnel and production resources, or through mutual specialisation.
• Joint research and development which may also involve joint commercialization.
• Exchange of information on stocks, cooperation in transport and storage logistics, in so far as they are aimed at counteracting coronavirus-induced threats to the supply chain.
• Cooperation in personnel planning in order to mitigate the effects of the coronavirus on the health of the workforce.

Antitrust law provides companies with sufficient leeway for crisis-related cooperation, including with competitors. It recognises necessary restrictions of competition in situations in which market mechanisms no longer function properly as a result of the crisis without such measures. For example, restrictions of competition can be justified by demonstrating that they are necessary to maintain the security of supply. In many parts of the world, the antitrust authorities are currently willing to talk to companies about restrictions of competition that are necessary to deal with the effects of the coronavirus on the economy.

However, the corona crisis does not give a "carte blanche" for any restriction of competition. Even in times of crisis, companies must therefore conduct a self-assessment that reviews and documents the facts and objectives underlying the cooperation with the competitor.

BEITEN BURKHARDT's antitrust lawyers also provide support for your company in the corona crisis. Please contact Dr Christian Heinichen or Christoph Heinrich.

Further support for your company is available here "Corona Informationscenter" in the BEITEN BURKHARDT Information Centre.

In January 2020, the BMWi released a draft law amending the German Foreign Trade Act (Außenwirtschaftsgesetz, AWG) and invited interested parties to submit their comments. The German Parliament (Bundestag) could therefore soon adopt an amendment to the German Foreign Trade Act. What aims is the BMWi under the leadership of the German Federal Minister for Economic Affairs, Peter Altmaier, seeking to pursue with the amendments and what specific changes are foreseen?

1) The national Situation

In Germany, the German Foreign Trade Act (AWG) and the German Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, AWV) form the legal basis for the control of foreign investments. Such an investigation can result in the prohibition or approval of a certain transaction, where necessary, provided that further requirements and legal obligations are fulfilled. German foreign trade law has been reformed several times in the past years.

The most recent amendment is the Twelfth Amendment of the German Foreign Trade and Payments Ordinance, which was adopted on 19 December 2018 and lowered the shareholding threshold for acquisitions from non EU/EFTA countries from 25 % to a minimum of 10 %: Investments in areas relevant to security and defence now require examination when this 10 % threshold is exceeded (see our Blog "Germany`s Tighter FDI Regime and the EU`s Path to Uniform Standards"). The proposed amendment of the German Foreign Trade Act within the framework of the “Industrial Strategy 2030” should now lead to more specific rules and potentially to the strengthening of the control of investments.

2) EU Screening Regulation

Within the EU, the control of foreign investment is a national matter. Until now, foreign investments have not been examined in all EU Member States. The national assessment criteria differ a lot and they do not necessarily take the interests of other EU Member States into account. A framework for the assessment of direct foreign investments in the all countries of the EU was developed upon the initiative of Germany, France and Italy (Regulation (EU) 2019/452 of 19 March 2019 (EU Screening Regulation) – see our Blog "New EU Uniform and Stricter Standards for Screening Foreign Investments"). This Regulation aims to safeguard the security or public order as well as the strategic interests of the entire European Union, by requiring the EU Member States to create the framework for the assessment and control of foreign direct investments in key sectors and in relation to critical infrastructure, and to cooperate with other EU Member States and the European Commission when carrying out their screening.

3) Implementation into the German Foreign Trade Act

The BMWi proposes to implement the EU Screening Regulation into German law by amending the German Foreign Trade Act.

The first draft, which was published on 30 January 2020, aims to provide the German investment control regime with an efficient tool for protecting the public order or security in case of critical acquisitions by investors from non-EU/EFTA countries. At the same time, however, the BMWi considers it important to find a balance between protecting public order or security on the one hand, and not endanger the attractiveness of Germany as an investment location on the other. By taking the following important points into account, the BMWi is trying to do justice to this balancing act.

a) New approach to the “degree of risk” requirement

According to the current legal framework, restrictions or commitments may only be imposed if the acquisition poses an "actual danger" to the public order or security of the Federal Republic of Germany. Instead of an “actual threat”, a “probable impediment” of public order or security will be sufficient in the future. According to the draft law, this requirement will also not be limited to the Federal Republic of Germany and will allow investment controls which are affecting public order or security of another EU Member State or in regard to projects and programmes of EU interest within the meaning of Article 8 of the EU Screening Regulation.

b) Extension of the ban against implementing the acquisition before clearance

Under current administrative practice, investors may complete their acquisition even before the acquisition’s investigation has been completed. As a result, the relevant authority is faced with a fait accompli before the investigation is concluded, undermining the sense and purpose of the investigation. The draft seeks to prevent this by extending the suspension effect until the completion of the investigation – including any cross-sector investigation.

c) Establishment of a National Liaison Office

Besides the amendments of the purely legal nature, the draft’s intention is to establish a national liaison office within the BMWI as part of the EU-wide cooperation mechanism. The liaison office is supposed to serve as the German link between national and European bodies in order to ensure the exchange of information throughout the EU.

4) Other Planned Amendments

The second step will consist in amending the German Foreign Trade and Payments Ordinance in order to determine which technologies are "critical" so that a shareholding of just 10 % will trigger a notification requirement and a possible investigation. Such technologies are expected to include artificial intelligence, robotics, semiconductors, biotechnology and quantum technology.

5) Conclusion

The declared objectives of the draft law are to make the German investment control procedures more effective and to provide more specific rules for exercising this control. At the same time, the EU Screening Regulation will be implemented into national law. Whether the draft will actually achieve the first objective is still a controversial issue. One criticism is that the regulation’s wording is too broad and unclear. Other interested parties consider that the rules are not wide-reaching enough. It therefore remains to be seen, whether the German Foreign Trade Act recast bill will be adopted by the German Parliament in the current form, which amendments might be made and what changes will actually result for the control of foreign investments.

For further information please contact Dr Rainer Bierwagen.

Read the entire German article by Dr Andrea Pomana, which appeared in Börsen-Zeitung Spezial on 27 November 2019, in the download area.

Trade

In the new Commission, the Trade portfolio will be covered by Irishman Phil Hogan who until now held the office of Commissioner for Agriculture. Von der Leyen presented him as a fair but determined negotiator. His role will be particularly significant for the post-Brexit era and the conclusion of a trade agreement between the EU and the United Kingdom. His appointment is remarkable considering the interests of Ireland in the process of leaving the EU. Hogan is extremely critical of British Prime Minister Johnson's approach to Brexit and accused him of "gambling" with the peace process in Ireland.

Important tasks for Hogan will consist of promoting the reform of the World Trade Organization and protecting Europe from unfair trade practices. A new system for screening foreign direct investments is to be created and negotiations with China about a comprehensive investment agreement are to be completed. The trade relation with the United States is supposed to be designed in a more balanced and mutually beneficial way. However, Hogan will also need to react in case US-President Trump continues to threaten or even puts into practice punitive tariffs on European automobiles. The probable imminent paralysis of the WTO dispute settlement system as of December 2019 is a good reason for an overhaul of the Regulation (EU) No 654/2014 concerning the exercise of the Union's rights for the application and enforcement of international trade rules. In that way, punitive tariffs against countries sabotaging the WTO will become feasible. On the other hand, the exclusion of non-EU-enterprises from tenders of government contracts is being discussed.

While the free trade agreements with Australia and New Zealand have to be finalized, the long-term objective of a free trade area between Africa and the European Union is on the horizon. For European investors a transparent and predictable legal framework for projects in Africa is to be created, in consideration of a sustainable development and the EU's value based approach. Furthermore, it is envisaged to link the reduction of trade barriers to actions against climate change and for a sustainable development, for example through the introduction of a "Carbon Border Tax". It remains to be seen how the European Union will be able to position itself “between” Washington and Beijing.

Competition and Digitalization

Margrethe Vestager, already an important character in the Juncker commission, will remain to oversee the Competition portfolio as well as the digital dossier and have a prominent role as second Executive Vice-President. In the past she attracted attention for positioning the EU against American tech-giants and for imposing penalty payments running into billions against Google in particular due to infringements of competition law.

Likewise, Ms Vestager is asked to focus on the compliance with competition rules and to improve their enforcement in the future. The detection and examination of infringements of competition law is planned to be accelerated, inter alia through cooperation with national competition authorities. Moreover, it is intended to find new ways and means against distortions of competition through companies controlled and subsidized by non-member countries.

Three of the current group exemption regulations will expire during the next term of office. An examination of the vertical group exemption regulation has already begun in 2018. It exempts certain agreements and conduct from the application of the rules on competition. It is to be expected that the regulation's revision will especially take into greater account the new challenges in e-commerce and online platforms. With regard to sector inquiries, meaning the inquiry in economic branches or sectors for detecting infringements of competition law, it has to be mentioned that the beginning of a new term of office is also suited for the introduction of new inquiries which take about two years. Possible areas to be examined are mobility, the internet of things as well as data intensive industries. After prohibiting the merger of Siemens’ and Alstom’s train activities in February 2019 through Ms Vestager, the introduction of a ministerial approval procedure, similar to the German model, is also under discussion.

In the area of EU State aid schemes the Juncker commission already strived for a modernisation. Some rules will expire by the end of the year 2020 and will be partly extended, partly overhauled. For the group exemption regulation, an extension of the regulation on the use of national resources is expected.

In addition to her role as Commissioner for Competition, Ms Vestager is designated for the post of a vice president to make Europe fit for the digital age. Investments in technologies such as 5G-Networks, Blockchain and high performance computers will help Europe to move forward in digitalization. A concept for a European digital tax is also intended for the next term of office.

Vestager is however not the only relevant person for answering the questions of digitalization. At her side, the designated Commissioner for the Internal Market, the French Sylvie Goulard, former French defense minister and vice president of the Banque de France, will also have a great influence on these questions. The responsibilities of the internal market portfolio have been expressly enlarged into this area. Ms Goulard and Ms Vestager are already estimated to be a strong team for the field of digitalization.

It is von der Leyen’s "mission letter" to Ms Goulard that mentions for the first time officially a "Digital Services Act" that is meant to uniformly regulate the online-distribution of services and to replace the e-commerce directive. This includes a possible enhancement of online platforms' responsibility for content uploaded by users. Moreover, Ms Goulard is entrusted with working on other aspects of digitalization such as the overseeing cybersecurity and the development of a digitalization action plan in education.

Ms Vestager and Ms Goulard are also instructed to define within their first 100 days in office a common approach to the topic of artificial intelligence, in particular with regard to the question how non-personalized Big Data can be used for such technologies.

If you have any questions on this topic, please contact Dr Rainer Bierwagen and Ramona Tax.

Over the last few years, Belgium has introduced a number of changes to its civil law, enterprise legislation and insolvency rules in order to make Belgium a more attractive place for doing Business.

The reform is based on three main principles: simplification, flexibility (though with attention to the interest of third parties) and compliance with European evolutions. The CSA replaces the current Companies Code, the Law on Associations and Foundation and the Law on Professional Associations. It will therefore not only apply to companies, but also to non-profit organizations and foundations for which it also made substantial changes. By way of example, an association is now considered a company in legal terms.

Transitional regime

The CSA entered into force on 1 May 2019. For entities that have already existed before that date, the new rules will apply as from 1 January 2020 - except the provisions regarding dispute resolution (exclusion and withdrawal) in proceedings initiated after 1 May 2019.

The articles of association of all existing entities and their internal procedures need to be reviewed and if necessary adapted to comply with the new rules by 1 January 2024 at the latest. Companies that no longer meet new stricter criteria or with an abolished legal form must convert into another legal form. Otherwise they will be converted automatically by operation of law into the nearest corporate form. However, mandatory provisions of the nearest corporate form already will apply earlier. Therefore, when dealing with a Belgian company, one must take this into account.

Nationality of a company and tax issues

The nationality of a company incorporated in Belgium was determined by the "real seat theory" (as in Germany and France) and accordingly depended on the place of the company's real or effective head office. The new law follows however the principle of the "incorporation theory", meaning that the location of the company's registered office is the determining factor, regardless of where the effective place of management is located. For instance the UK and the Netherlands also apply this theory. It replaces an ambiguous criterion by an objective and easily verifiable one.

However for corporate income tax purposes, a company's tax residency will depend on the place of effective management of a company. In order to bring corporate and tax law into closer alignment a new legal presumption provides that if a company has its registered office in Belgium, it is deemed to have its place of effective management in Belgium. To prove the opposite, the company needs to demonstrate that the tax residence is established in another State in accordance with the tax legislation of that country.

Cross-border movements of companies

The law regulates the cross-border transfer of the registered office of companies from Belgium to another jurisdiction (emigration) or vice versa (immigration). In the event of emigration, creditors have the right to demand additional security within two months of publication of the planned emigration in the Belgian Official Gazette. In this context, one should note that the European Commission published a Proposal for a directive of the European Parliament and of the Council amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions. Its adoption may lead to changes of the Belgian legislation.

Both changes, to company and tax laws, provide more legal certainty and protection for creditors. A possible disadvantage may be a discrepancy between the applicable company law and the applicable insolvency law. According to the new version of the Insolvency Regulation, the national insolvency law of the country in which the "center of main interests" exists applies. The registered office is no more than a rebuttable presumption.

Fewer types of companies

The reform reduces the previously available different corporate forms to only seven permitted types of companies with legal personality. These are:

• The general partnership ("société en nom collectif", SNC/VOF, "vennotschap onder firma");
• The limited partnership ("société en commandite", SComm/CommV, "commanditaire vennotschap");
• The private limited liability company ("société à responsabilité limitée", SRL/BV, "besloten vennotschap");
• The cooperative company ("société coopérative", SC/CV, "coöperatieve vennotschap");
• The public limited liability company ("société anonyme", SA/NV, "naamloze vennotschap");
• The European company ("société européenne", SE, "Europese vennotschap");
• The European cooperative company ("société coopérative européenne", SCE, "Europese coöperatieve vennotschap").^[2]

In addition the European Economic Interest Grouping ("Groupement européen d'intérêt économique", GEIE/EESV, "Europees economisch samenwerkingsverband" has legal personality, whereas the "societé simple" or "maatschap" is an ordinary partnership without legal personality).

Regarding associations, the "association de fait" or "feijtelike vereniging" has no legal personality and only

• The non-profit association ("association sans but lucratif", ASBL/VZW, "vereniging zonder winstoogmerk" as well as
• The international non-profit association ("association international sans but lucratif", AISBL/VIZW, "internationale vereniging zonder winstoogmerk"

remain as associations with legal personality.

With regard to foundations,

• The private foundation ("fondation privé, FP/PS, "private stichting" and
• The "fondation d'utilité public", FUP/SON, "stichting van openbaar nut"

are the available legal forms.

Main points of interest

New regime of the private limited liability company, SPRL/BVBA, now called SRL/BV

The private limited liability company has been renamed to SRL/BV and remains the standard company form for unlisted companies. Now, it features flexible dividend rights, increased flexibility in the transfer of shares or acquisition of own shares, and a changed alarm bell procedure (triggered by a certain amount of capital loss) as a consequence of the fact that the rule that the rights to each share should be the same does not apply anymore. A transfer of shares still requires the prior approval of a certain majority of shareholders as a default rule, but the articles of association may provide for free transferability. The SRL/BVs can now issue all types of securities, including warrants and convertible bonds, and their securities can be listed on the stock exchange. This creates options for start-ups and family businesses that can now grant additional rights to investors.

Moreover the minimum capital requirement of EUR 18,550 as well as the requirement to accumulate a reserve equal to 10 percent of the share capital is abolished. It is replaced by alternative safeguards such as a liquidity-based test to limit distributions. This test requires the board of directors to state in a report that, in accordance with reasonably expected developments, the company will continue to be able to pay its debts due within a period of at least twelve months after the distribution. If there is an auditor, it must review the accounting and financial aspects of such report. This marks a change from "capital" to "equity" concept. The existing capital and legal reserve will be automatically converted into a statutory, unavailable reserve from 1 January 2020. In order to ensure that a SRL/BV is sufficiently capitalized at the time of its creation, the law requires the founders to prepare a detailed financial plan justifying the amount of initial funding and taking into account the planned activities over a period of at least two years. A similar requirement already existed under the previous company law system. However, the financial plan has to be more detailed and substantive under the new legislation. In the event of bankruptcy within three years of incorporation, the founders may be held liable for any losses incurred by third parties. However, this is only the case if these losses are due to the fact that the company is "manifestly insufficient" for the normal exercise of the activities foreseen at the time of incorporation.

By abolishing the two-shareholder requirement it is now possible to have a single shareholder without losing the advantage of limited liability.

Multiple voting rights per share can be implemented in an unlisted company. This can be useful when establishing private equity structures or joint ventures. Double voting rights are possible in a listed company if the so called "loyalty shares" have been held by the same shareholder for an uninterrupted period of two years in registered form. The principle of double voting must be expressly included in the articles of association of the company. The shareholders meeting has to adopt a formal resolution which requires a special majority of two thirds (instead of 75 percent under previous legislation) of the votes present or represented. Listed companies can implement the principle of double voting rights with a majority of only 50 percent and one share if the resolution is passed between 1 January 2020 and 30 June 2020. If shares are transferred or registered shares converted into dematerialized shares, the double voting right ceases. However, this does not apply to transfers that take place between companies under common control or between a company and its controlling shareholder or in the case of inheritance, merger or split. This means that the "one share/one vote" rule which has existed since 1934 has now become the default rule only.

The Board of Directors may distribute profits of the previous financial year if the shareholders have not yet approved the annual accounts. In addition, the interim dividend based on the profit for the current financial year is regulated less strictly. This may be the introduction of a quarterly dividend. Furthermore it is now possible to appoint daily manager(s).

New regime of the stock corporation, SA/NV

It is now possible to have (i) a single director, (ii) a board of directors or (iii) a dual system whereby the management is divided over a supervisory board nominated by the shareholders' meeting and a board of executives nominated by the supervisory board, each of them with different competences and composition. The former management committee is abolished.

Alike in the SRL/BV multiple or double voting rights are also applicable as well as the possibility to have a single shareholder and the distribution of profits of the previous financial year.

Previously, directors of a SA/NV could be dismissed at any time without giving reasons and without notice or compensation. Under the new law, companies may derogate from this rule so that notice periods and severance agreements can be freely negotiated with directors before or during the term of office.

Redefinition of association

Non-profit organizations and foundations are now allowed to perform "commercial activities" of all kinds and make profits since they are distinguished from companies based on the distribution of their profits and not on the basis of the nature or extent of their activity. However, under the new law it is still forbidden to distribute (directly or indirectly) profits resulting from their activities.

Directors' liability

According to the new law, the rules on directors' liability have a broader scope and apply not only to formally appointed directors, but also to persons who actually act as directors of the company and to daily Managers.

A specific liability for continuing to engage in loss generating activities ("wrongful trading") is introduced. The new law provides for a cap on the liability of all directors and daily managers. That cap varies from EUR 125,000 to EUR 12,000,000 depending on turnover or balance sheet totally aligned with the consumer price index. The cap applies as long as the misconduct committed in the performance of their duties does not exceed the margin within normally prudent and diligent directors in the same circumstances can reasonably hold a divergent opinion. However, the cap does not apply in case of gross negligence, fraudulent intent or intent to cause harm and minor fault of a habitual rather than accidental nature as well as contractual guarantees or other credit support by the directors. The specific liability rules of directors with regard to withholding tax or value-added tax (VAT) are also not affected by the liability cap. The cap applies collectively to all directors and cannot be excluded by contract.

The rules on conflicts of interest are also tightened. Previously, a conflictual director was only subject to a disclosure requirement, whereas the CSA excludes the conflictual director from discussions and decision makings on matters in which the director is conflicted.

Conclusion

The new rules introduce more flexibility in Belgian corporate law. Together with other changes in Belgian civil and commercial law, they convey that Belgium is open for business.

Foreign companies doing business with Belgian companies should however each time verify that their Belgian partners are properly incorporated and solidly financed.

For further information please contact Dr Rainer Bierwagen.

^{[1] Published in Dutch and French language versions in the Moniteur Belge dated 4 April 2019 as of page 33239.}

^{[2] The silent partnership ("stille handelsvennootschap" or "société interne") and the temporary partnership ("tijdelijke handelsvennootschap" or "société momentanée") will become sub-forms of the ordinary partnership. The cooperative unlimited liability company ("coöperatieve vennootschap met onbeperkte aansprakelijkheid" (CVOA) or "société coopérative à responsabilité illimitée" (SCRI)), the partnership limited by shares ("commanditaire vennootschap op aandelen" (Comm.VA) or "société en commandite par actions" (SCA)), the agricultural company ("landbouwvennootschap" (LV) or "société agricole" (S. Agr.)) and the economic interest grouping ("economisch samenwerkingsverband" (ESV) or "groupement d’intérêt économique" (GIE)) will no longer be available corporate forms.}