21 November 2018

Commission welcomes agreement on foreign investment screening framework

President of the European Commission, Jean-Claude Juncker said: "Europe must always defend its strategic interests and that is precisely what this new framework will help us to do. This is what I mean when I say that we are not naïve free traders. We need scrutiny over purchases by foreign companies that target Europe's strategic assets. I commend the European Parliament and the EU governments for reaching this agreement in such a swift manner."

Commissioner for Trade Cecilia Malmström said: "This is an important milestone in the process we initiated only a year ago to protect critical technology and infrastructure in Europe. It shows the willingness of Europe to deliver on a strong demand from our citizens and stakeholders. In an increasingly interconnected and interdependent world, we need means to protect our collective security while keeping Europe open for business. I count on the European Parliament and Member States to swiftly approve the investment screening mechanisms agreed today."

Openness to foreign direct investment is enshrined in the EU Treaties. Foreign direct investment fuels economic growth, innovation and employment. However, in some cases foreign investors might seek to acquire strategic assets that allow them to control or influence European enterprises the activities of which are critical for the security and public order in the EU and in its Member States.

Main features of the new European framework for screening of foreign direct investment:

- creates a cooperation mechanism where Member States and the Commission will be able to exchange information and raise specific concerns.

- allows the Commission to issue opinions in cases concerning several Member States, or when an investment could affect a project or programme of interest to the whole EU, such as Horizon 2020 or Galileo.

- encourages international cooperation on investment screening policies, including sharing experience, best practices and information regarding investment trends.

- reaffirms that national security interests are the responsibility of Member States; it will not affect the Member States' ability to maintain their existing review mechanisms, to adopt new ones or to remain without such national mechanisms (currently 14 Member States have such mechanisms in place).

- Member States keep the last word whether a specific operation should be allowed or not in their territory.

- takes into account the need to operate under short business-friendly deadlines and strong confidentiality requirements. [...]

Full press release

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