EU Bolsters Investment Screening to Safeguard Economic Security

The European Union has reached a provisional agreement to revise foreign investment screening rules. These new regulations aim to protect economic security by assessing investments in sensitive sectors like AI and defence. The revision also addresses foreign-controlled investors within the EU, enhancing the bloc's 'de-risking' strategy.

The European Union has taken a significant step by reaching a provisional agreement on revising its foreign investment screening regulations. This milestone aims to protect the bloc's economic security by mandating that all EU countries scrutinize foreign investments in sectors deemed sensitive, such as defence and artificial intelligence.

The revised law will allow EU members to potentially block investments if they present a security threat. Notably, the screening process will also apply to intra-EU investments if a foreign entity controls the investor. The regulation avoids naming specific nations but refers to 'countries of concern' and echoes the EU's 'de-risking' policy, which seeks to reduce dependence on critical resources like Chinese rare earths and semiconductors.

Although the responsibility for screening lies with the nation receiving the investment, the European Commission will play an advisory role. This agreement aims to fortify the EU's capacity to protect its security and public order, while maintaining its allure as an investment destination, according to Danish Business and Industry Minister, Morten Bodskov.

(With inputs from agencies.)