EUROPEAN UNION: Agreement Reached on Co-ordinated Screening of FDI

Friday November 23 2018

The European Parliament has agreed with the Council and Commission on screening of incoming foreign direct investment (FDI) to ensure security and public order.

The three institutions backed plans to set up a mechanism to screen FDI, with the aim to ensure that foreign investments do not pose a threat to critical infrastructure, key technologies or access sensitive information.

The new rules will also allow for more transparency, better coordination and collective responses if investments threaten security and public order.

Next steps

The agreement will have to be formally endorsed first by the Council and the Committee on International Trade and the full House of the European Parliament, before entering into force. EU countries that have screening mechanisms will have time to adapt their legislation to the new rules. 

Background

FDI is a growing source of concern in the EU. if for instance the investor is a state-owned enterprise, or if the investment is in critical infrastructure projects in fields such as energy or communications, robotics or nuclear technology.

Currently only 13 of the 28 member states has a screening mechanism that examines FDI on grounds of security or public order and the systems vary widely, with no coordinated approaches between Members.

Click on the above link for more information.