Screening investment, safeguarding security
The new European framework will enter into force in April 2019Europost
The EU Council approved last Tuesday a new framework to screen foreign direct investments coming into the EU, thus concluding the legislative process on this proposal, the EU press service reported. The new framework will enter into force in April this year and will help safeguarding Europe's security, public order and strategic interests when it comes to foreign investments into the Union.
“The EU gains a lot from foreign investment and it plays a vital role in our economies. However, we have seen a recent increase in investment in our strategic sectors and this has led to a healthy public debate on the issue. With this new framework we are in a much better position to monitor foreign investments and safeguard our interests,” Trade Commissioner Cecilia Malmstrom said.
The new framework will create a cooperation mechanism, where Member States and the Commission will be able to exchange information and raise concerns related to specific investments. It will also allow the Commission to issue opinions when an investment poses a threat to the security or public order of more than one Member State, or when an investment could undermine a project or programme of interest to the whole EU, such as Horizon 2020 or Galileo.
Under the framework international cooperation on investment screening, including sharing experience, best practices and information on issues of common concerns will be encouraged, while
certain requirements for Member States who wish to maintain or adopt a screening mechanism at national level will be st. Member States also keep the last word whether a specific investment operation should be allowed or not in their territory.
“This decision is a proof the EU is able to act quickly when strategic interests of our citizens and economy are at stake. With the new investment screening framework, we are now much better equipped to ensure that investments coming from countries outside the EU actually benefit our interests. I committed to work for a Europe that protects, in trade as in other areas; with this new legislation in place we are delivering on a crucial part of our promise,” EC President Jean-Claude Juncker said in reaction to the Council's decision.
Following the approval by Member States in the Council and the positive vote by the European Parliament on 14 February, the new EU legislation establishing an EU-wide investment screening framework is now set to enter into force in the coming weeks. Member States and the Commission will subsequently have 18 months to put in place the necessary arrangements for the application of this new mechanism. Currently 14 Member States have national screening mechanisms in place. Although they differ in their design and scope, they share the same goal of preserving security and public order at national level.