Interinstitutional talks begin on EU’s revised FDI screening mechanism

Representatives of the European Parliament, the Council and the Commission have commenced so-called ‘trilogue’ negotiations on a revised FDI screening framework that seeks to strengthen EU economic security by protecting strategic industry sectors from risky investments by third-country investors. 

The EU’s FDI screening framework makes investment screening a stronger, more coherent strategic instrument. The new rules will:

• Ensure that all member states have a screening mechanism in place, with more harmonised national rules.
• Identify a minimum sectoral scope where all member states must screen foreign investments.
• Extend EU screening to include investments by EU investors ultimately controlled by individuals or entities from a non-EU country.

Background

The EU’s framework for FDI screening, which began to operate on 11 October 2020, is part of a broader three-pillar approach to boosting EU economic security by promoting the EU’s competitiveness, protecting against risks, and partnering with the broadest possible range of countries to advance shared economic security interests. With that in mind, the Commission adopted five initiatives to strengthen the EU’s economic security on 24 January 2024 – including the legislative proposal subject to this trilogue.   

Next steps

Representatives of the European Parliament, the Council, and the Commission will hold a series of interinstitutional negotiations (trilogues), with the aim of reaching a political agreement on the final text of the revised regulation.