Updating the European framework for screening foreign direct investment
Brussels, December 11, 2017 – The Presidency of the Council and the European Parliament reached an initial political agreement that establishes a new step in modernizing the European framework for examining foreign direct investment.
The European Council in Brussels said in a statement that the goal is to strengthen the Union’s ability to monitor, evaluate and address the risks associated with some inward investments without compromising its openness to trade and global capital.
The Danish Minister of Industry, Business and Financial Affairs, Morten Budskov, whose country holds the rotating European presidency, considered that the agreement strengthens Europe’s ability to protect its security and public order while maintaining its investment attractiveness.
The agreement included setting a common minimum scope for examination that includes military equipment, dual-use items, and highly sensitive technologies such as artificial intelligence related to defence, space, quantum technologies, and semiconductors, in addition to vital raw materials and vital entities in the energy, transportation, and digital infrastructure sectors. It also strengthened the cooperation and accountability mechanism while preserving the host country’s right to make the final decision on accepting or restricting investment.
The updates also included simplifying procedures by creating a joint database that prevents fraud and enhances the exchange of experiences, and providing an optional unified portal for submitting investment applications if at least nine countries request it, in addition to clarifying risk assessment factors, provided that the agreement is subject to official approval by the Council and Parliament before it enters into force, and then the new rules begin to be implemented after 18 months.
Pro/Z/WAM
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