EU framework for FDI screening [EU Legislation in Progress]

Written by Gisela Grieger (1st edition),

FDI, acronyms business concept

© kenary820 / Fotolia

On 13 September 2017, the European Commission adopted a proposal for a regulation establishing a framework for screening foreign direct investment (FDI) inflows into the EU on grounds of security or public order. The proposal is a response to a rapidly evolving and increasingly complex investment landscape. It aims to strike a balance between maintaining the EU’s general openness to FDI inflows and ensuring that the EU’s essential interests are not undermined. Recent FDI trends and policies of emerging FDI providers have cast doubt on the effectiveness of the EU’s decentralised and fragmented system of monitoring FDI inflows to adequately address the potential (cross-border) impact of FDI inflows on security or public order without EU-coordinated cooperation among Member States.

The proposal’s objective is neither to harmonise the formal FDI screening mechanisms currently used by less than half of the Member States nor to replace them with a single EU mechanism. It aims to enhance cooperation on FDI screening between the Commission and Member States, to increase legal certainty and transparency.

Member States, stakeholders and academia are divided in their views on the proposal.


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