EU foreign investment screening regulation enters into force
The new EU framework for the screening of foreign direct investments has officially entered into force on 10 April 2019.
The new framework is based on proposal tabled by the European Commission in September 2017 and will be instrumental in safeguarding Europe's security and public order in relation to foreign direct investments into the Union.
President of the European Commission, Jean-Claude Juncker yesterday said:
"This new framework will help Europe defend its strategic interests. We need scrutiny over purchases by foreign companies that target Europe's strategic assets. I want Europe to remain open for business, but I have said time and again that we are not naïve free traders. The adoption and entry into force of this proposal in an almost record time shows that we mean business and that when it comes to defending Europe's interests we will always walk the talk."
The new framework will:
- create a cooperation mechanism where Member States and the Commission will be able to exchange information and raise concerns related to specific investments;
- allow the Commission to issue opinions when an investment poses a threat to the security or public order of more than one Member State, or when an investment could undermine a project or programme of interest to the whole EU, such as Horizon 2020 or Galileo;
- encourage international cooperation on investment screening, including sharing experience, best practices and information on issues of common concerns;
- set certain requirements for Member States who wish to maintain or adopt a screening mechanism at national level. Member States also keep the last word whether a specific investment operation should be allowed or not in their territory;
- take into account the need to operate under short business-friendly deadlines and strong confidentiality requirements.
EU Member States are now required to notify their national investment screening mechanisms to the Commission. At present, 14 Member States have national screening mechanisms in place. Several Member States are in the course of reforming their screening mechanisms, or adopting new mechanisms.
Over the next 18 months, the Commission and EU Member States will take the necessary steps to make sure that the EU can fully apply the Investment Screening Regulation as of 11 October 2020. These steps concern, in particular, the setting up of the new EU-wide mechanism for cooperation, enabling Member States and the Commission to exchange information and raise concerns related to specific foreign investments. Upcoming tasks include:
- Creating formal contact points in each Member State and in the Commission to allow for the exchange of information and analysis;
- Establishing secure channels between Member States and the Commission to exchange information on FDI transactions;
- Putting in place the necessary procedures for Member States and the Commission to react quickly to FDI concerns and to issue opinions;
- Pursuing policy cooperation on FDI screening with relevant partner countries.
The proposal to create the first EU-wide framework for the screening of foreign direct investments was presented by President Juncker during the 2017 State of the Union address. Following its adoption by the European Parliament and by the Council on 19 March 2019, the new EU legislation has now entered into force.
The EU has one of the world's most open investment regimes, as acknowledged by the OECD in its investment restrictiveness index. The EU is the main destination for foreign direct investment in the world: foreign direct investment stocks held by third country investors in the EU amounted to €6,295 billion at the end of 2017, providing Europeans with 16 million direct jobs.
For more information
Foreign Direct Investment in the EU: Report
Latest News from
EU Budget 2020 conciliation talks suspended18/11/2019 12:10:00
After making every effort to reach a compromise on an adequate EU budget for 2020 during long hours on Friday, Parliament and Council have suspended the talks without agreement.
Academy Learning Portal: the new design is finally here!18/11/2019 09:25:00
Have you noticed that the Academy Learning Portal has been updated? Indeed, under the scope of the strategic project e-learning Portal – Next Generation, the Academy Learning Portal (ALP) has a completely new look and feel with some brand new features.
International migrant trafficking network dismantled15/11/2019 15:10:00
This week the national authorities in Germany (Federal Police Department) and Romania (Directorate for Investigating Organised Crime and Terrorism and National Police) took part in a simultaneous action against an organised criminal group trafficking migrants from the Middle East.
Article – New beginnings: reassessing EU-Turkey relations15/11/2019 13:20:00
Concerns over fundamental rights and action in Syria are leading to a rethink of EU-Turkey relations. What is the status of the cooperation? What are MEPs proposing?
MEPs condemn criminalisation of sex education in Poland15/11/2019 12:10:00
In a resolution put to the vote on Thursday, MEPs express their deep concern over a Polish draft law that could put teachers who provide sex education in prison.
Closing VAT loopholes for sales through online platforms15/11/2019 11:10:00
MEPs on Thursday voted on measures specifying how large online platforms are to contribute to closing loopholes that hinder the collection of VAT.
Clean mobility: EC welcomes agreement on tyre labelling to save energy14/11/2019 15:10:00
A political agreement on a European tyre labelling has been reached between the European Parliament, the Council and the EC. The new rules improve and strengthen EU tyre labels enabling European consumers to make better choices and bringing energy savings equivalent to taking 4m cars off EU roads every year.
Opening ceremony of the 2019/2020 academic year at the College of Europe14/11/2019 13:20:00
Keynote speech given yesterday by President Donald Tusk
Wolfgang Schäuble: “Without European unification, there would be no German unity”14/11/2019 12:10:00
EP President David Sassoli and President of the German Bundestag Wolfgang Schäuble commemorated the fall of the Berlin Wall on 9 November 1989.