A new era for German investment screening: first look at the draft Investitionsprüfungsgesetz

Author: Christoph Barth

After months of anticipation, the Federal Ministry for Economic Affairs and Energy has circulated the first draft of a standalone German Investment Screening Act (Investitionsprüfungsgesetz, IPG). Our blog post provides an initial flavour of what the draft would change, what it leaves alone, and - perhaps the most interesting signal - where it says a firm “no, not here” to proposals that had been doing the rounds in Berlin.

The statutory hooks sit in a handful of sparse provisions in the German Foreign Trade Act (AWG); the operative substance, sectors, thresholds, procedural detail, has grown organically in Part 6 of its implementing ordinance (AWV). Deal lawyers are used to flipping between the two. Constitutional lawyers have never been very happy about it: the Federal Constitutional Court’s essentiality doctrine says that the heart of a measure restricting fundamental rights belongs in a formal Act of Parliament, not in secondary legislation.

The draft IPG addresses exactly that. It pulls the entire regime out of the AWG and the AWV and consolidates it in a single, purpose-built statute, with a leaner accompanying ordinance (the Investitionsprüfungsverordnung, or IPV) left to carry the sector catalogues, the one piece that needs to move faster than legislative cycles allow. The Ministry gives three reasons: honouring the essentiality doctrine, implementing the revised EU Screening Regulation (EU) 2026/1386 (which must be applied from 17 January 2028), and delivering the coalition agreement's twin promise to speed up and simplify the regime, while continuing to block acquisitions "that run counter to our national interests".

That framing matters. The IPG is not a crackdown. In several places it quietly makes life easier for inward investors, and in a couple of politically-charged areas, it deliberately draws a line in the sand.