On 13 September 2017 the European Commission published a proposal for a Regulation which establishes an EU framework for screening foreign direct investments (FDIs) into the EU. According to the Commission such a framework is necessary to protect legitimate interests of the EU and its Member States with regard to FDIs that raise concerns for security or public order.
The proposed Regulation would not require Member States to implement an FDI screening mechanism. Rather, it proposes a framework with “some basic requirements” (such as the possibility of a judicial redress of decisions, non-discrimination between different third countries and transparency) for those Member States which already have such a mechanism (currently 12 of the 28 Member States) or would wish to put one in place. It also proposes a cooperation mechanism whereby Member States would inform other Member States and the Commission about any FDI that is undergoing screening within the framework of their national screening mechanisms. Moreover, the Commission would be able to carry out a screening on grounds of security and public order, in cases where an FDI may affect projects or programmes of EU interest. Member States would be allowed to raise concerns as regards an FDI in another Member State and to provide comments, whereas the Commission could issue non-binding opinions.
Speaking at the European Policy Centre on 26 September 2017, European Commissioner for Competition Margrethe Vestager referenced the proposed framework and its interaction with EU merger control rules.
Subject to certain safeguards, the EU merger control regime already permits Member States to review FDIs even where the competition aspects of the transaction are subject to the Commission’s exclusive review under the EUMR. Vestager emphasised that the proposed framework will not affect EU competition rules on mergers, which will continue to apply “to every company, wherever it comes from”.