The reform of the EU FDI screening

This document aims to provide a thorough examination of the European Union’s approach to Foreign Direct Investment (FDI) screening, with a particular focus on presenting the diverse perspectives of EU institutions on the key topics involved. It highlights how the European Commission, the European Parliament, and the Council differ and converge on the objectives, scope, procedures, and powers related to FDI screening, thereby illustrating the ongoing political dialogue shaping the final regulatory framework.

The first section explains the driving forces behind the EU’s increasing emphasis on coordinated FDI screening. It identifies growing concerns over the potential risks that foreign investments may pose considering both the external geopolitical context and the internal difficulties. Following this, the document presents a detailed timeline outlining the development of the FDI screening initiative and the stances of the EU institutions.

The core of the document examines the main issues related to FDI screening and the differing views between the institutions that will be discussed during the trilogue, reflecting broader debates between national sovereignty and EU-level coordination within this framework. It begins by defining the scope of national screening mechanisms, clarifying which types of investments and sectors are subject to review. It then explores the procedural aspects of these mechanisms. The attention is then to the criteria used for risk assessment.

The document also discusses the rules for multi-jurisdictional transactions, where investments span multiple Member States. Then, central to the EU’s approach is the cooperation mechanism established to facilitate information sharing and joint assessments among Member States. Finally, the willingness of the Parliament to expand the role and powers of the European Commission is examined.

In conclusion, the document summarises the balance that must be struck between protecting security and public order and preserving the EU’s attractiveness to foreign investors, highlighting ongoing debates among institutions.


At the end, a table summarises the positions of various EU institutions on the FDI screening proposal, providing insight into the political dynamics shaping the final regulatory framework.

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