Foreign Investment Screening: EU Ready to Protect Its Strategic Assets

Written by | Monday, November 26th, 2018

The European Parliament, the Council and the Commission have reached a political agreement on an EU framework for screening foreign direct investment. The package agreed will ensure that the EU and its member states are well equipped to protect their essential interests while remaining one of the most open investment regimes in the world.

President of the European Commission, Jean-Claude Juncker said that “Europe must always defend its strategic interests and that is precisely what this new framework will help us to do. This is what I mean when I say that we are not naïve free traders. We need scrutiny over purchases by foreign companies that target Europe’s strategic assets. I commend the European Parliament and the EU governments for reaching this agreement in such a swift manner.”

Openness to foreign direct investment is enshrined in the EU Treaties. Foreign direct investment fuels economic growth, innovation and employment. However, in some cases foreign investors might seek to acquire strategic assets that allow them to control or influence European enterprises the activities of which are critical for the security and public order in the EU and in its member states.

The proposal to set up a European framework for screening foreign direct investment into the European Union is part of the Commission’s effort to deliver on a Europe that protects its companies, workers and citizens. The main objective of the new European framework for screening of foreign direct investment is to create a cooperation mechanism where Member States and the Commission will be able to exchange information and raise specific concerns. This will allow the Commission to issue opinions in cases concerning several member states, or when an investment could affect a project or programme of interest to the whole EU, such as Horizon 2020 or Galileo.

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