Foreign direct investment screening continues to boost EU economic security

The fifth annual report on the screening of foreign direct investments (FDI) into the EU reveals that the number of notifications to the EU’s cooperation mechanism has increased by 15% since 2021, which was its first full year of operation. 

The latest report showcases an increased focus on the risks that certain investments from third countries may pose to security or public order in the EU, and/or to EU projects and programmes.

In 2024, EU Member States notified 477 investments to the mechanism, triggering questions from other Member States in around 10% of cases. Of the 477 cases notified, most (92%) were closed swiftly within two weeks. Only 8% required in-depth security risk assessment. Around half of those detailed assessments concerned manufacturing, often triggered by concerns about potential technology or knowledge leakage, as well as security of supply. In keeping with the previous year, the Commission issued opinions in less than 2% of cases. 

By the end of 2024, 24 EU Member States had national FDI screening legislation in place. 

Background 

The EU’s FDI Screening Regulation entered into force in October 2020. It provides a framework for EU Member States and the Commission to cooperate in screening foreign investments on security and public order grounds.  

In January 2024, the Commission presented a legislative proposal to address shortcomings identified in the EU’s current FDI screening framework. That proposal is currently being discussed in so-called ‘trilogue negotiations’ between the Commission, the Council (composed of EU Member States) and the European Parliament.    

The intention of the revised regulation is to make it mandatory for all EU Member States to put in place and maintain a national FDI screening mechanism. The revised regulation also aims to introduce a minimum level of harmonisation of national FDI screening laws throughout the EU, as well as introduce procedural improvements to the EU-wide cooperation mechanism. 

For More Information 

5^th Annual Report on the Screening of FDI into the EU 

Staff Working Document 

Investment Screening in the EU 

Factsheet on Revision of FDI Regulation