A mandatory screening mechanism applies to activities affecting the public order, public security and national defence interests. Prior governmental approval is required for certain acquisitions by foreigners in specified sectors. 
On 1 January 2019, Decree No. 2018-1057 entered into force, whereby the scope of the French screening mechanism was expanded, now including: 1) space operations; 2) cybersecurity; 3) artificial intelligence; 4) robotics; 5) semiconductors and additive manufacturing; 6) data hosting; 7) systems utilized for capturing computer data or intercepting correspondence; 8) IT systems for public authorities in the field of national security; 9) information systems utilized in crucial industries; 10) research and development of dual-use goods and technologies. Moreover, now both investors and companies being targeted now have the option to seek pertinent authorisation (before, phrasing referred only to "investors". Additionally, this authorisation may encompass specific conditions placed on investors, particularly concerning the assurance of technology durability or data protection. The changes broaden the sectors to which the authorisation requirement applies; add additional reasons that may justify the refusal of a foreign investment under the mechanism; and allow the takeover target to request an opinion on whether an envisaged transaction would require authorisation.
Further changes to France’s mechanisms to manage acquisition- and ownership-related risk to its essential security interests came into effect on 22 May 2019. The reform, incorporated in the law commonly referred to as Loi PACTE, bring enhanced follow-up on mitigation agreements; stronger injunctions and sanctions in case of non-respect of rules and mitigation agreements; stronger transparency of the mechanism by the implementation of a parliamentary control and an obligation for the French Government to publish an annual report including aggregate statistics about the procedure.
On 1 January 2020, changes to France’s investment screening mechanism entered into effect. Among other measures, the changes lowered the trigger thresholds for the screening mechanism to 25%, down from 33.33% and added additional industry sectors to the list of sectors to which the review mechanism applies.
On 30 April 2020, in the context of the COVID-19 pandemic, the Arrêté du 27 avril 2020 added biotechnologies to the list of industry sectors to which France’s mandatory review mechanism applies. 
On 23 July 2020, the Décret n° 2020-892 du 22 juillet 2020 became effective, temporarily lowering the trigger threshold for the French FDI review mechanism to a 10% foreign shareholding, down from 25%, for FDIs made in listed companies. 
On 28 December 2020, the Decree n° 2020-1729 was adopted. It prolongs the application of the special regime adopted during the pandemic to control foreign investment from 31 December 2020 until 31 December 2021.
On 22 December 2021, the adoption of Decree No. 2021-1758 took place, prolonging the modification of the threshold for acquiring voting rights in French companies engaged in activities sensitive to public security, public order, and national defense—requiring pre-governmental review—from 25% to 10%.
"Article L151-3
I. – Foreign investment in any activity in France which, even if only occasionally, is part of the exercise of public authority or pertains to one of the following domains is subject to prior approval from the Minister in charge of Economy:
a) Activities likely to jeopardise public order, public safety or national defence interests
b) Research in, and production or marketing of, arms, munitions, or explosive powders or substances
A decree issued following consultation with the Conseil d’État (French Supreme Administrative Court) specifies the nature of the above-mentioned activities.
II. - The authorisation granted may have special conditions attached to it to ensure that the planned investment does not jeopardise the national interests referred to in section I.
The decree referred to in section I specifies the nature and possibilities to revise the conditions which may be attached to the approval.
[...]
Article R151-1
I. In the context of an investment as referred to in Article R. 151-2, the following shall constitute an investor within the meaning of this Chapter:
a) Any individual of foreign nationality
b) Any individual of French nationality who is not domiciled in France within the meaning of Article 4 B of the French General Tax Code
c) Any entity governed by foreign law
d) Any entity governed by French law that is controlled by one or more of the persons or entities referred to in subsections a), b) or c) above
II. For the purposes of this Chapter, a chain of control shall be understood to mean the combination of an investor referred to in subsections c) or d) of section I above and the persons or entities that control it. All of the persons and entities in a chain of control shall constitute investors within the meaning of this Chapter.
III. The control referred to in this Article shall be assessed in accordance with Article L. 233-3 of the French Commercial Code or, when no control has been established on the basis of this Article, in accordance with section III of Article L. 430-1 of said Code.
Article R151-2
An investment, within the meaning of Article L. 151-3, is deemed to have been made when an investor as defined in section I of Article R. 151-1:
a) Acquires control, within the meaning of Article L. 233-3 of the French Commercial Code, of an entity governed by French law
b) Acquires all or part of a business activity of an entity governed by French law
c) Crosses, directly or indirectly, whether acting alone or in concert, the threshold of 25% of the voting rights of an entity governed by French law
Subparagraph c) shall not be applicable to individuals who are nationals of a Member State of the European Union or a State that is a signatory to the European Economic Area (EEA) Agreement in addition to a mutual administrative assistance agreement with France for the purposes of combating tax evasion and tax avoidance, and who are domiciled in one of those States, or to entities in which all the members of the chain of control, within the meaning of Article R. 151-1(II), are governed by the law of one of the abovementioned States or are nationals of and domiciled in one of these States.
Article R151-3
The activities mentioned in section I of Article L. 151-3 are as follows:
I. Activities, relating to the exercise of public authority, that are likely to jeopardise national defence interests or the maintenance of public order and public safety:
a) Activities, including those mentioned in Article L. 2332-1 of the French Defence Code, relating to weapons, munitions, explosive powders and substances intended for military use or relating to war material and assimilated materials covered by Parts III and V of Book III of the second part of the French Defence Code
b) Activities relating to dual-use items and technologies listed in Annex IV to Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items
c) Activities carried on by entities entrusted with the protection of national defence secrecy
d) Activities carried on in the information systems security sector, including as a subcontractor, for the benefit of an operator referred to in Articles L. 1332-1 or L. 1332-2 of the French Defence Code
e) Activities carried on by entities that have entered into a contract, either directly or as a subcontractor, on behalf of the Ministry of Defence for the provision of a good or service falling within the scope of an activity referred to in subsections a), b), c) or f)
f) Activities relating to cryptology resources and services mentioned in paragraphs III and IV of Article 30 and paragraph I of Article 31 of Act No. 2004-575 of 21 June 2004 on confidence in the digital economy
g) Activities relating to technical equipment or devices capable of intercepting communications or designed for the remote detection of conversations or data capture, as defined in Article 226-3 of the French Criminal Code
h) Activities relating to the provision of services by approved assessment centres under the conditions laid down in Decree No. 2002-535 of 18 April 2002 on the assessment and certification of the security offered by information technology products and systems
i) Gambling activities, with the exception of casinos
j) Activities relating to measures designed to deal with the illicit use of pathogens or toxic substances or to prevent the health consequences of such use
k) Activities relating to the processing, transmission or storage of data, the interference with or disclosure of which is liable to jeopardise the exercise of the activities referred to in subsections a) to j) of section I or II
II. Activities, related to the exercise of public authority, that are likely to jeopardise national defence interests or the maintenance of public order and public safety, insofar as they concern infrastructure, goods or services that are vital to guaranteeing:
a) The integrity, security and continuity of the energy supply
b) The integrity, security and continuity of the water supply
c) The integrity, security and continuity of the operation of transport networks and services
d) The integrity, security and continuity of the space operations referred to in Article 1(c) of Act No. 2008-518 of 3 June 2008 on space operations
e) The integrity, security and continuity of the operation of electronic communications networks and services
f) The fulfilment of the missions of the national police, the national gendarmerie and the civil security services, as well as the fulfilment of the public safety assignments of customs and those of approved private security companies
g) The integrity, security and continuity of operation of an establishment, facility or work of vital importance within the meaning of articles L. 1332-1 and L. 1332-2 of the French Defence Code
h) The protection of public health
i) The production, processing and distribution of the agricultural products listed in Annex I to the Treaty on the Functioning of the European Union, where these contribute to the objectives of national food safety referred to in paragraphs 1, 17 and 19 of section I of Article L. 1 of the French Rural and Maritime Fisheries Code
j) The publishing, printing and distribution of political and general information press publications, within the meaning of Article 4 of Act No. 47-585 of 2 April 1947 on the status of newspaper and periodical publication bundling and distribution companies, and online press services for political and general information within the meaning of Article 1 of Act No. 86-897 of 1 August 1986 on the reform of legal arrangements for the press
III. Activities, related to the exercise of public authority, that are likely to jeopardise national defence interests, public order and public safety, when they are intended to be carried out in connection with one of the activities referred to in section I or II:
a) Research and development activities relating to critical technologies, the list of which is defined by an order from the Minister in charge of Economy
b) Research and development activities relating to the dual-use goods and technologies listed in Annex I to the abovementioned Council Regulation of 5 May 2009 [...]" (Monetary and Financial Code, last amended by Décret n°2021-721 of 4 June 2021, Articles L151-3, R151-1, R151-2 and R151-3 [unofficial translation])
---------------------------
"Article 1
Amended by Decree No. 2021-1758 of December 22, 2021 - art. 1
Until December 31, 2022, an investment, within the meaning of Article L. 151-3 of the Monetary and Financial Code , constitutes the fact, for an investor mentioned in I of Article R. 151-1 of the same code, of crossing, directly or indirectly, alone or in concert, the threshold of 10% holding of the voting rights of a company governed by French law whose shares are admitted to trading on a regulated market. [...]" (Decree n ° 2020-892 of July 22, 2020 relating to the temporary lowering of the control threshold for foreign investments in French companies whose shares are admitted to trading on a regulated market, last amended by Decree No. 2021-1758 of December 22, 2021, Article 1 [google translation])
---------------------------
"Article 1
Modified by Decree n ° 2020-1729 of December 28, 2020 - art. 1
Until December 31, 2021, constitutes an investment, within the meaning of Article L. 151-3 of the Monetary and Financial Code , the fact, for an investor mentioned in I of Article R. 151-1 of the same code, to cross, directly or indirectly, alone or in concert, the 10% threshold for holding the voting rights of a French company whose shares are admitted to trading on a regulated market.
The preceding paragraph is not applicable to a natural person possessing the nationality of a Member State of the European Union or of a State party to the agreement on the European Economic Area having concluded an administrative assistance agreement. with France in order to fight against fraud and tax evasion and domiciled in one of these States, nor to an entity including all the members of the chain of control, within the meaning of II of article R 151-1 of the Monetary and Financial Code, come under the law of one of these same States or have its nationality and are domiciled there.[...]" (Decree n ° 2020-892 of July 22, 2020 relating to the temporary lowering of the control threshold for foreign investments in French companies whose shares are admitted to trading on a regulated market, last amended by Decree n°2020-1729 of 28 December 2020, Article 1 [google translation])
---------------------------
"Article L151-3
I. – Foreign investments in an activity in France which, even occasionally, contributes to the exercise of public authority or falls within one of the following areas are subject to prior authorization from the Minister responsible for the economy:
(a) Activities likely to undermine public order, public security or the interests of national defence;
(b) Activities of research, production or marketing of weapons, munitions, powders and explosive substances.
A decree in the Council of State defines the nature of the above activities and the investments subject to authorization.
II. – The authorization given may be subject, where appropriate, to conditions aimed at ensuring that the planned investment will not harm the national interests referred to in I.
The decree mentioned in I specifies the nature and the methods of revision of the conditions which may be attached to the authorization.
Article L151-3-1
I.-If a foreign investment has been made without prior authorization, the Minister responsible for the economy shall take one or more of the following measures:
1° Injunction to the investor to file an application for authorization;
2° Injunction to the investor to restore the previous situation at his own expense;
3° Injunction to the investor to modify the investment.
The injunctions mentioned in 1° to 3° may be accompanied by a penalty payment. The injunction shall specify the amount and effective date of this penalty payment. A decree in the Council of State shall set the maximum daily amount of the penalty payment and the terms and conditions according to which, in the event of total or partial non-performance or delay in performance, it shall be liquidated.
The Minister responsible for the economy may also, if the protection of the national interests mentioned in I of Article L. 151-3 is compromised or likely to be compromised, take the precautionary measures that appear necessary to him. In this capacity, it may:
a) Pronounce the suspension of voting rights attached to the fraction of shares or corporate units whose holding by the investor should have been the subject of prior authorization;
b) Prohibit or limit the distribution of dividends or remuneration attached to shares or corporate units whose holding by the investor should have been the subject of prior authorization;
c) Suspend, restrict or temporarily prohibit the free disposal of all or part of the assets linked to the activities defined in the same I;
d) Appoint a representative responsible for ensuring, within the company to which the activity mentioned in I of Article L. 151-3 relates, the protection of national interests. This representative may prevent any decision by the corporate bodies likely to harm these interests. His remuneration is set by the Minister responsible for the economy; it is borne, as are the costs incurred by the representative, by the company to which he is appointed.
II.-The Minister responsible for the economy, if he considers that the conditions attached to his authorization pursuant to II of Article L. 151-3 have been disregarded, shall take one or more of the following measures:
1° Withdrawal of the authorization. Unless he restores the situation prior to the investment, the foreign investor shall reapply for the investment authorization provided for in the same Article L. 151-3;
2° Injunction to the investor to whom the unfulfilled obligation fell to comply within a period that he sets with the conditions contained in the authorization;
3° Injunction to the investor to whom the unfulfilled obligation fell to perform within a period that it sets requirements in substitution for the unfulfilled obligation, including the restoration of the situation prior to the non-compliance with this obligation or the transfer of all or part of the activities defined in I of said Article L. 151-3.
These injunctions may be accompanied by a penalty payment in accordance with the terms set out in I of this Article.
The Minister responsible for the economy may also take the necessary precautionary measures, under the conditions and in accordance with the terms set out in the same I.
III.-Decisions or injunctions taken on the basis of this Article may only be made after the investor has been formally notified to submit observations within a period of fifteen days, except in cases of emergency, exceptional circumstances or imminent threat to public order, public security or national defence.
IV.-These decisions are subject to full appeal.
V.-A decree in the Council of State determines the methods of application of this article.
Article L151-3-2
In the event of an investment being made without prior authorisation, obtaining prior authorisation by fraud, failure to comply with the requirements of II of Article L. 151-3 , or total or partial non-compliance with decisions or injunctions taken on the basis of Article L. 151-3-1 , the Minister responsible for the economy may, after giving the investor the opportunity to submit his observations on the facts with which he is accused within a minimum period of fifteen days, impose a financial penalty on him, the amount of which shall not exceed the highest of the following amounts: twice the amount of the irregular investment, 10% of the annual turnover excluding tax of the company carrying out the activities defined in I of Article L. 151-3, five million euros for legal entities and one million euros for natural persons.
The amount of the financial penalty shall be proportionate to the seriousness of the breaches committed. The amount of the penalty is recovered as the State's debts unrelated to tax and property." (Monetary and Financial Code, last amended by Law n°2019-486 of May 22, 2019, Articles L151-3, L151-3-1, and L151-3-2 [google translation])
---------------------------
"Article L233-3
I.- Any person, natural or legal, is considered, for the application of sections 2 and 4 of this chapter, as controlling another:
1 ° When it holds, directly or indirectly, a fraction of the capital conferring on it the majority of voting rights in the general meetings of this company;
2 ° When it alone has the majority of the voting rights in this company by virtue of an agreement concluded with other partners or shareholders and which is not contrary to the interests of the company;
3 ° When it determines in fact, by the voting rights at its disposal, the decisions in the general meetings of this company;
4 ° When she is a partner or shareholder of this company and has the power to appoint or dismiss the majority of the members of the administrative, management or supervisory bodies of this company.
II.-It is presumed to exercise this control when it has, directly or indirectly, a fraction of the voting rights greater than 40% and no other partner or shareholder directly or indirectly holds a fraction greater than its own.
III.-For the application of the same sections of this chapter, two or more persons acting in concert are considered as jointly controlling another when they in fact determine the decisions taken in general assembly.[...]" (Commercial Code, version in force since 05 December 2015, Article L233-3 [google translation])
Monetary and Financial Code, last amended by Décret n°2021-721 of 4 June 2021, Articles L151-3, R151-1, R151-2 and R151-3 
Decree n ° 2020-892 of July 22, 2020 relating to the temporary lowering of the control threshold for foreign investments in French companies whose shares are admitted to trading on a regulated market, last amended by Decree No. 2021-1758 of December 22, 2021, Article 1
Decree n ° 2020-892 of July 22, 2020 relating to the temporary lowering of the control threshold for foreign investments in French companies whose shares are admitted to trading on a regulated market, last amended by Decree n°2020-1729 of 28 December 2020, Article 1 
Monetary and Financial Code, last amended by Law n°2019-486 of May 22, 2019, Articles L151-3, L151-3-1, and L151-3-2 
Commercial Code, version in force since 05 December 2015, Article L233-3
[<a href="https://www.legifrance.gouv.fr/codes/section_lc/LEGITEXT000006072026/LEGISCTA000006140476/#LEGISCTA000006140476">Code</a>],[<a href="https://trade.ec.europa.eu/doclib/docs/2020/march/tradoc_158692.pdf">Code_Eng</a>],[<a href="https://www.legifrance.gouv.fr/loda/id/LEGIARTI000044620057/2021-12-25/#LEGIARTI000044620057">Decree</a>],[<a href="https://www.legifrance.gouv.fr/loda/id/JORFTEXT000042138111/2021-08-11/">Decree</a>],[<a href="https://www.legifrance.gouv.fr/codes/section_lc/LEGITEXT000006072026/LEGISCTA000006153982/2019-12-30/">Code</a>],[<a href="https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000031564650/2021-08-11/">Code</a>]