This presentation by Ashley LENIHAN, Deputy Director, MSFS and Professor of the Practice of International Affairs, Georgetown University, was made during the discussion “The Relationship between FDI Screening and Merger Control Reviews” held at the 139th meeting of the OECD Competition Committee on 30 November 2022. More papers and presentations on the topic can be found out at https://oe.cd/fdimc
This presentation was uploaded with the author’s consent.
6. Initial FDI Control Mechanisms
1st generation policies and review mechanisms, often focused on protecting:
• a narrow range of sectors associated with national security
• real estate in sensitive areas / borderlands
• particular ‘national champions’ in the defense industrial base☨
☨Source: OECD (2020). Acquisition- and ownership-related policies to safeguard essential security interests: Current and emerging trends, observed designs, and policy practice in 62 economies,
9. Strategic FDI – Evolutions in International Dynamics and Risks
1. Fundamental revolution in technology
2. Shift to a multi-polar, contested, and more
competitive international environment
3. Shift to increased use of tools of economic
statecraft to gain power and position in
the international system
• Rise in strategic and / or state
sponsored and subsidized FDI as state
policy
• Corresponding adaptation and use of
FDI control mechanisms to protect
national security
• Led to the adoption of more
sophisticated next generation review
mechanisms with dedicated resources
and processes,☨
• With the primary objective of
protecting essential security, without
discouraging benign investment or
affecting competition unnecessarily.
• However, competition regimes should
expect that national security decisions
will be given primacy, even where they
might have sub-optimal outcomes for
competition or consumers.
☨See, e.g.: OECD (2020). Acquisition- and ownership-related policies to safeguard essential security interests: Current and emerging trends, observed designs, and policy practice in 62