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A new regulation to control foreign subsidies could result in more complex, costly, and time-consuming M&A clearance processes.

By Richard Butterwick, Carles Esteva Mosso, Beatrice Lo, Elisabetta Righini, Gillian Bourke, Natália Solárová, Werner Berg, France-Helene Boret, and Catherine Campbell

European M&A is set to become more complex after the European Parliament and European Council agreed the Foreign Subsidies Regulation (FSR), a new regime introduced to control foreign subsidies that distort the EU internal market. This new regulatory layer will apply in addition to existing merger control and foreign direct investment scrutiny of M&A, and comes at a time of heightened regulatory intervention in deals across multiple jurisdictions.

By Paul Davies and Michael Green

The Environmental Liability Directive (ELD) aims to prevent, remedy and/or compensate for environmental damage. ELD seeks to achieve this through the “polluter pays principle”, ensuring businesses are held legally and financially accountable for environmental degradation that results from their operations. However, Member States have varied considerably in implementing ELD, significantly reducing its effectiveness. The European Parliament is the latest of several European authorities to review ELD’s effectiveness.

A report published by the European Parliament sets out the primary areas of concern with ELD, namely: (i) the lack of certainty surrounding key definitions; and (ii) narrowness of scope. For example, the European Parliament considers there is “total uncertainty” regarding the “significance threshold”. As the significance threshold determines whether an incident triggers liability under ELD, the European Parliament considers the clarity of the threshold crucial. Furthermore, ELD only imposes strict liability on operators that cause environmental damage in the course of activities specified in an exhaustive list. Beyond this list, liability for environmental damage is fault-based.

By Andrew Moyle, Fiona Maclean, Christian McDermott, Andrea Stout and Stuart Davis

On April 28th, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) published a report about Fintech and the Virtual Currency B - Singleinfluence of technology on the future of the financial sector. The report, prepared by Cora van Nieuwenhuizen, was adopted by ECON with 45 votes in its favour (6 against) a few days prior to its publication. Designed to encourage the EU to further support Fintech development, the report is addressed to the European Commission and is expected to be read alongside the Commission’s Consultation Document on Fintech which was published earlier this year.

The report sets out a number of priorities:

By Paul Davies and Michael Green

A new pensions directive was passed by the European Parliament on 24 November securing 512 votes (only 77 votes against and 40 abstentions), requiring EU workplace pension funds to consider environmental, social and governance (ESG) issues. This is considered a ‘landmark’ moment for responsible investment.

The new pensions directive stipulates that:

  1. ESG criteria is to be considered in investment decisions and their practical implementation should be disclosed in regular reports.
  1. Pension funds have to include their ‘stranded asset‘ strategy as part of their risk management procedure.
  1. The integration of ESG considerations will not be considered as conflicting with fund managers’ fiduciary duties. Fund managers will not be exposed to legal liability for an alleged failure to act prudently by prioritising ESG factors over financial risk returns in their investment decisions.

By Cesare Milani

The Italian Government definitively approved Legislative Decree no. 50 in April this year, implementing Directives 2014/23/EU, 2014/24/EU and 2014/25/EU of the European Parliament and European Council. The revised legislation resulting from the Directives coming into force affect the Italian construction market. Notably, the new Italian Public Procurement Code impacts “public procurement and awarding concession contracts, procurement by entities operating in the water, energy, transport and postal services sectors and on the reorganization of the Public Procurement Regulation”. The new code has been introduced to deliver high quality standards for public works and to limit excessive cost increases due to variances in project execution.

According to data made available by the Italian National Association of Building Contractors (Associazione Nazionale dei Costruttori Edili), the regulatory change has already resulted in the retreat of the public works market. In addition to strengthening the role of Autorità Nazionale Anticorruzione (ANAC), the national anti-bribery and corruption authority in the public procurement sector, the new code has also established a qualification system of contracting authorities and introduced other provisions to consolidate public tenders. Such revisions have led to a decline in both the value of the calls to tender made public and the number of large public procurement procedures launched. In May this year, there was a 75% decrease in tender value compared to the calls for tender published in May 2015. With respect to the number of public procurement procedures commenced, only 10 procedures with an awarding value higher than €5 million were kicked-off in May 2016, while 45 procedures of the same size were recorded in 2015.

By Paul Davies and Alice Gunn

Unwrapping the New Circular Economy Package

The European Commission is driving the transition to a stronger and more circular economy by ensuring resources are used in a more sustainable way. On 2 December 2015, the Commission adopted a new Circular Economy Package which, according to the Commission, will help European businesses and consumers adopt more sustainable practices.

In December 2014, the Commission withdrew proposals for waste reductions targets on the grounds that the approach…