On 14 February 2019, the European Parliament voted in favour of a 2017 Commission proposal to implement a Europe-wide framework for screening foreign direct investments. The text approved by the Parliament follows talks between the Commission, the Council and the Parliament that concluded in November 2018. Final approval from the Council is expected on 5 March 2019 with the regulation coming into force 18 months after its publication in the Official Journal.
Currently, 14 Member States have national screening mechanisms in place which vary in design and scope. The proposal for a Europe-wide framework for screening foreign direct investments would allow Member States and the Commission to cooperate and exchange information on investments from third countries that may affect security or public order in the EU. The proposal is primarily aimed at protecting critical infrastructure, such as energy, transport, data, finance, and critical technologies, such as artificial intelligence, semiconductors and robotics.
In particular, the new framework:
- creates a cooperation mechanism where Member States and the Commission will be able to exchange information and raise concerns related to specific investments;
- allows the Commission to issue opinions when an investment threatens the security or public order of more than one Member State, or when an investment could undermine a project or programme of interest to the whole EU, such as Horizon 2020 or Galileo;
- encourages international cooperation on investment screening, including sharing experience, best practices and information on issues of common concerns;
- sets certain requirements for Member States who wish to maintain or adopt a screening mechanism at national level, though Member States will retain an ultimate veto regarding whether a specific investment operation should be allowed in their territory but must give due consideration to any comment or opinion of the Commission; and
- takes into account the need to operate under short business-friendly deadlines and strong confidentiality requirements.