Press Release: Free movement of capital: Commission calls on France to modify its legislation establishing an authorisation procedure for foreign investments in certain sectors of activity

The European Commission has decided to ask France formally to modify Decree 2005-1739 of 30 December 2005, which creates an authorisation procedure for foreign investments in certain sectors of activities that could affect public policy, public security or national defence. The Commission is concerned that some of the provisions of this decree could discourage investment from other Member States, in contradiction with EU Treaty rules on the free movement of capital (Article 56) and the right of establishment (Article 43). The Commission's request takes the form of a 'reasoned opinion', the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. The first stage of the infringement procedure, the 'letter of formal notice', was issued in April 2006 (see IP/06/438). In the absence of a satisfactory reply from France within two months of receiving the reasoned opinion, the Commission may decide to refer the matter to the European Court of Justice.