EU investment screening

The EU’s foreign investment screening mechanisms became operational on October 11, 2020.  As we’ve reported, guidance on the screening mechanisms, which are implemented by individual member states, was released in March 2020 following the 2019 entry into force of the FDI Screening Regulation.

Since April 2019, the EC and member states have made preparations for the implementation of the framework by establishing a mechanism for the exchange of information on FDI projects that are subject to screening; developing procedures to respond to FDI which may pose a security risk; and updating the list of “projects and programmes of Union interest” on which the EC will issue opinions to be followed by member states when assessing foreign investment into these projects. These include “projects and programmes which involve a substantial amount or a significant share of Union funding, or which are covered by Union law regarding critical infrastructure, critical technologies or critical inputs which are essential for security or public order” according to an amendment of the Annex to the 2019 Regulation.

Germany and Ireland have both recently tightened their FDI screening, in accordance with the EU Regulation.