Legal and Regulatory

France extends control over foreign investment in 3D printing and other technologies

In an update of Decree No. 2018-1057 the French Government has placed further control over foreign investment into sensitive technology sectors, including additive manufacturing.

Part of a regular update to ensure the country’s code remains up to date, the changes do mean that certain research and development activities, relating to public security and national defense, will come under greater scrutiny.

As explained by Stéphanie Faber and Véronique Collin of The National Law Review, “The government has stated that its objective is to help the country adjust to new and contemporary challenges through better protection of the technological sectors of the future,”

“Although the government’s view is that this should not create a barrier to future foreign investment, potential investors in the technological sectors should be aware that investments into France may be closely examined.”

How is 3D printing affected? 

Decree No. 2058-1057, which came into force January 1 2019, and consolidated January 25 2018, has undergone several amendments, but the one relating to additive manufacturing is listed under Article 1. This article relates to the list of activities that require prior authorization from the French Minister for the Economy should they be the subject of a foreign investment.

One such activity is listed as research and development activities relating to “cybersecurity artificial intelligence, robotics, additive manufacturing, [and] semiconductors.” More specifically this would be R&D activities relating to the following list of sensitive sectors:

– 4 ° Activities relating to equipment or technical devices likely to allow the interception of correspondence or designed for the remote detection of conversations or the capture of computer data”

– 8 ° Activities relating to the means of cryptology and the services of cryptology

– 9 ° Activities carried out by companies holding national defense secrets

– 12 ° Other activities relating to equipment, products or services, including those relating to the safety and proper functioning of facilities and equipment, essential to guaranteeing the country’s interests in matters of public order, security public or national defense, concerning energy sources and water supply, transport, public health, communications and secure computing, (i.e. for the national police.)

In addition to these extended controls, the government has also introduced stricter sanctions for failure to comply.

France’s FDI

To put France’s receipt of foreign investment into perspective in 2017, according to the UNCTAD World Investment Report, foreign direct investment (FDI) flows to France increased from $35 billion to approximately $50 billion. Further, according to the latest available data from the OECD, Luxembourg, the Netherlands, the UK and Switzerland remain the top four investors in France. In 2016, Luxembourg represented 20.6% of France’s FDI, the Netherlands 13.4%, the UK 11.8% and Switzerland 10.6%. The U.S. by comparison, constituted 8.2% of FDI.

By sector, professional, scientific and technical activities and manufacturing industry accrue the largest investments by far. In 2016, professional, scientific and technical activities accounted for 24.6% of the country’s total FDI flow, whereas manufacturing accounted for 24.2%.

Source: OCDE, Extrait des Statistiques, table image via Santander Trade
Source: OCDE, Extrait des Statistiques, table image via Santander Trade

Also considering the impact of new technologies in the interest of national security, U.S. Federal Bureau of Industry (BIS) and Security was seeking advice on how additive manufacturing should be defined, which would in turn relate to export status.

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Featured image shows the inside of the French National Assembly. Photo via Assemblée Nationale