The EU has published updated rules on screening foreign investment, requiring all member states to run checks on deals that could pose risks to security or public order.
The revised Foreign Investment Screening Regulation expands what can be reviewed to include indirect foreign investment, the European Commission announced on Friday.
It also covers investments made through EU-based investors when they are ultimately controlled by an individual or entity from outside the bloc.
Under the new rules, national screening mechanisms must cover a minimum range of sensitive and strategic areas, including so-called dual-use items — goods and technologies that can be used for both civilian and military purposes — as well as critical technologies, critical raw materials, financial services, transport, energy and electoral infrastructure.
Timelines, notifications and transparency
The framework also sets a common minimum level of harmonisation for procedures such as timelines for national screening processes, according to the Commission.
It also introduces filtering criteria so that only cases presenting high risks are notified through the EU’s cooperation mechanism, and increases information-sharing on the outcomes of national screening procedures.
The regulation will enter into force 20 days after its publication in the EU’s Official Journal, the Commission said. Member states will then have 18 months to implement the minimum requirements.
EU Commissioner for Trade and Economic Security Maroš Šefčovič said the revised system would allow the EU and member states to “identify and address risks stemming from foreign investments that may affect security or public order”, while “preserving the EU’s openness to foreign investment.”
