EU member states have agreed new rules to screen foreign direct investment, expanding the sectors covered and requiring every country in the bloc to run a national screening system.
The Council of the EU adopted on Monday a revised regulation updating the EU’s framework for foreign direct investment, known as FDI, which refers to investments where an overseas investor gains lasting control or influence over a business.
The existing EU-wide screening framework has been in place since 2020, the Council noted in a statement.
Under the new rules, all member states must establish screening mechanisms covering a common minimum scope of sensitive sectors, technologies and infrastructure.
Areas listed include dual-use items and military equipment, critical raw materials, artificial intelligence, energy, transport and digital infrastructure.
The regulation also covers foreign investments made through EU-based subsidiaries. Screening decisions will remain the responsibility of national authorities.
Cooperation with the Commission
The updated framework increases cooperation between member states and the European Commission, and introduces tools to facilitate information exchange and prevent circumvention of the rules, the Council said.
It also aims to increase transparency and consistency across national systems and streamline procedures for investors and public authorities.
“With today’s adoption, the EU is reinforcing its capacity to protect security and public order while remaining open to foreign investment,” Michael Damianos, Cyprus’s Minister for Energy, Commerce and Industry, commented.
The regulation will be published in the EU’s Official Journal and will enter into force 20 days later. The new rules will apply 18 months after the regulation enters into force.
