New Foreign Investment Screening Regulation in Europe
The new EU framework for the screening of foreign direct investments has officially entered into force on 10 April 2019.
It is based on a proposal tabled by the European Commission in September 2017 and will be instrumental in safeguarding Europe’s security and public order in relation to foreign direct investments into the Union. “This new framework will help Europe defend its strategic interests,” President of the European Commission, Jean-Claude Juncker, was cited. “We need scrutiny over purchases by foreign companies that target Europe’s strategic assets. I want Europe to remain open for business, but I have said time and again that we are not naïve free traders. The adoption and entry into force of this proposal in an almost record time shows that we mean business and that when it comes to defending Europe’s interests, we will always walk the talk.”
According to the European Commission, the new framework will:
■ create a cooperation mechanism where Member States and the Commission will be able to exchange information and raise concerns related to specific investments;
■ allow the Commission to issue opinions when an investment poses a threat to the security or public order of more than one Member State, or when an investment could undermine a project or program of interest to the whole EU;
■ encourage international cooperation on investment screening, including sharing experience, best practices and information on issues of common concerns;
■ set certain requirements for Member States who wish to maintain or adopt a screening mechanism at national level. Member States also keep the last word whether a specific investment operation should be allowed or not in their territory;
■ take into account the need to operate under short business-friendly deadlines and strong confidentiality requirements.
The EU has one of the world’s most open investment regimes and is the main destination for foreign direct investment in the world, the commission underlined. Foreign direct investment stocks held by third-country investors in the EU amounted to 6,295 billion Euro at the end of 2017, providing Europeans with 16 million direct jobs.
Photo: rawpixel / Pixabay
(GR 22019, Page 8)
