Screening of foreign investments in the Union

Practical information

 

Background

In its Communication on the new European Economic Security Strategy in June 2023, the Commission had included the review of the 2019 Foreign Direct Investment (FDI) Screening Regulation among the next steps to implement the Strategy.  

In January 2024, this announcement was followed by the presentation of a legislative proposal to update the Regulation and adapt it to the evolving geopolitical and technological landscapes. This proposal is set to enhance the EU’s scrutiny of FDI, a critical step in safeguarding the Union's security and public order against potentially risky investments, particularly those in strategic sectors like critical technologies and infrastructure. 

Key enhancements include ensuring every Member State establishes a screening mechanism, harmonizing national rules for more effective collaboration, defining a minimum sectoral screening scope with the flexibility for additional national measures, and extending the screening to include transactions influenced by non-EU entities. This update reflects the EU's commitment to maintaining its attractiveness as an investment destination while addressing security concerns more effectively. 

By improving the FDI screening process, the EU aims to protect its essential interests without compromising its open investment regime, ensuring a secure and prosperous environment for its citizens and businesses in the face of global uncertainties.