The German Foreign Trade Law and Its Effects on International M&A Transactions

April 04, 2014

By Paul Hastings Professional

The German government recently passed new versions of the German Federal Act on Foreign Trade (Außenwirtschaftsgesetz) and the German Foreign Trade Ordinance that became effective on 1 September 2013 (the “German Foreign Trade Law”). Their aim was to simplify the existing law and to conform it to the European regulations.

Also under the new German Foreign Trade Law, an M&A transaction may become subject to review and prohibition by the German Federal Ministry of Economics and Technology (Bundesministerium für Wirtschaft und Technologie) (the “Ministry”), if a person or entity not located in the European Union (“Foreign Buyer”) directly or indirectly acquires a company located in Germany or a direct or indirect participation in such company.

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