On May 14 2014 the government issued the Montebourg Decree, which completes the rules governing the prior authorisation of certain foreign investments provided in Article L153-3 of the Monetary and Financial Code. The decree adds a 12th sub-paragraph to Article R153-2 of the code, which in point (f) of the subparagraph extends its scope to "the protection of public health".
As a consequence, are all foreign investments in public health subject to the prior authorisation rules? After a careful reading of the heading of Sub-paragraph 12 of Article R153-2, the answer is no. Only "activities… essential to guarantee the country's law and order, public safety or national defence interests" which relate to point (f) of the sub-paragraph – in other words, the "protection of public health" – will be subject to the rules. The criteria are cumulative: the activities must be essential to guarantee law and order, public safety or national defence, and must concern the protection of public health.
The triangle of law and order, public safety and national defence is well known to public law specialists in the area of police powers and administrative prerogatives, and includes public safety (prevention of risks of accidents and injury to persons), public order and public hygiene (limitation of the risks of disease, public health concerns).
According to Article L151-3 of the code, which has remained unchanged since the enactment of the Montebourg Decree, foreign investments such as "activities which might contravene law and order, public safety or national defence interests" were already subject to authorisation. Articles R153-5, 3e and R153-2, 3e of the code cover, in particular, the case of antidotes by requiring authorisation for investments in research and development or production of means intended to counteract the unlawful use for terrorist activities of pathogens or toxins and to prevent the health consequences of such use. That text already concerned the protection of public health.
A question legitimately arises regarding the real scope of the extension of the rules on prior authorisation of foreign investments to the life sciences sector. It could be more of a (necessary) clarification rather than a real revolution in the scope of these texts. However, the particular cases requiring prior authorisation must still be determined. The power to preserve and maintain public hygiene requires the availability of the industrial, organisational and scientific means to prevent and treat certain diseases, epidemics (by compulsory vaccination) and epizootics, and to prevent and fight against bioterrorism. Production units and research centres, and certain molecules, vaccines and antibiotics, may be involved if they are necessary to give the state the means to maintain public health.
A case-by-case review will be necessary. This was already the case before the decree, which is intended to ensure that the protection of public health is covered by prior authorisations in the life sciences sector.
For further information on this topic please contact Jean Marc Grosperrin or Claire Picard at Dentons by telephone (+33 1 4268 4800), fax (+33 1 4268 1545) or email (firstname.lastname@example.org or email@example.com). The Dentons website can be accessed at www.dentons.com.