New EU framework on foreign investment screening takes effect in April

The European Union’s new framework for screening FDI took effect in April 2019, with the text now published in the EU’s Official Journal. The framework allows both EU member states and the European Commission until October 2020 to enact the changes required.

The new system envisions a 35-day procedure that proponents say would make it easier for the European Commission and member states to work together in assessing whether FDI will have implications for security and public order, while giving the Commission the mandate to publish related opinions on the subject under certain circumstances.

According to an EU Commission factsheet, factors that could affect its assessment include whether and how these investments affect “critical infrastructure, critical technologies, the supply of critical inputs, such as energy or raw materials, access to sensitive information or the ability to control information, or the freedom or pluralism of the media.” Member states without national screening mechanisms are not required to put those in place.