Revision of the EU’s Foreign Investment Screening Mechanism

The conclusion of these negotiations marks an important step toward strengthening the EU’s security and public order, ensuring that foreign investments continue to support, rather than undermine, Europe’s economic security, resilience and broader interests. The revised framework will make investment screening more robust, coherent, and strategic. It will reinforce the EU’s ability to identify and collectively address potential risks from foreign investments to security and public order.

Its main elements are:

• mandatory introduction of screening mechanisms by all Member States;
• covering intra-EU investments where the EU investor is owned or controlled by a third-country person or entity;
• a common minimum scope for national screening mechanisms, including:
  • dual-use items and items on the EU common military list
  • Union targets that manufacture, conduct research in or develop semiconductors or quantum technologies, or artificial intelligence technology;
  • entities active in the transport, energy or digital infrastructure sectors and considered critical by the relevant Member State;
  • entities active in exploration, extraction, processing, recycling, recovery or stockpiling of strategic critical raw materials, and;
  • specific categories of financial service providers: central counterparties, central securities depositories, operators of regulated markets, operators of payment systems excluding central banks, other systemically important institutions, and global providers of specialised financial messaging services.
• key minimum requirements for national screening regimes, such as a two-phase process, and the power to screen unnotified transactions retroactively;
• harmonised deadlines for national screening procedures, including a 45-calendar day deadline for the initial screening by national authorities, based on the expectation that throughout the Union, most transactions are not sensitive and will be cleared during this initial screening phase of 45 days;
• an improved cooperation mechanism for situations where other Member States or the Commission have issued comments or opinions;
• timelines for transactions concerning several Member States are aligned, all filings should be made on the same day and authorities should align their handling of the different parts of the same transaction;
• the option of an EU online portal for filing transactions with national screening authorities to be established at the request of at least nine Member States, and;
• an EU-level database (accessible to screening authorities) containing information on investments previously notified under the cooperation mechanism and the outcome of national screening procedures since October 2020.