On 10 April, the EU foreign direct investment (FDI) screening mechanism entered into force. The new regulation sets up a framework for screening the investment from non-EU countries that may affect security or public order.

The new framework will provide a mechanism for member states to exchange information and raise concerns relating to specific investments, as well as encourage the exchange of experience and best practice in FDI screening. Importantly, it will also allow the Commission to issue opinions when an investment poses threat to the security or public order of one or more member states, or if it undermines the interests of a project carried out in the EU interests (such as Horizon 2020 or Galileo). For those member states who alreaady have an FDI screening framework, or those who wish to intriduce one, the regulation will set requirements for such mechanisms. The final decision on whether a given investment will be cleared or not remain within the powers of a member state.

For more detailed information, see Commission’s press release and a summary of the new framework.