The members states' ambassadors to the European Union (Coreper) have agreed on the Council's position on the EU draft framework for screening foreign investments from third countries on European territory, with a view to trialogue negotiations with the European Parliament.
In September 2017, the European Commission proposed a regulation to establish an EU-level framework for analysing third countries' investments in strategic sectors, as well as a mechanism for cooperation between the member states and with the Commission to filter those likely to bring harm to security and public order (see EUROPE 11862).
With fewer than half the EU countries having legislation enabling them to monitor foreign investments, this framework would strengthen their cooperation, defining a set of information to be exchanged and introducing certain time limits.
The framework, which aims at increasing legal security and transparency, provides for a mechanism for the opinion of the Commission and member states on a foreign investment in a member state in order to help the member states decide whether or not to authorise the foreign investment, without giving this power to the EU.
While preserving the opening of the European market to foreign direct investments (FDI) from third countries, the objective is to strengthen member states' vigilance of investments that are not the result of normal market forces and that are becoming more numerous in critical sectors of the EU. The objective is also to strengthen member states' vigilance of opaque state-owned enterprises or private firms with close government links that are buying EU firms using cutting-edge or dual use technologies (such as artificial intelligence, robotics or nanotechnologies) or strategic infrastructure assets which could have a potential impact on the EU's security or public order.
This investment screening proposal has been identified as a legislative priority by all three EU institutions. The European Council of March 2018 also called for progress on this file. On the basis of the text endorsed by EU ambassadors, the Austrian Presidency of the EU Council of Ministers will start negotiations with the Parliament with a view to reaching an agreement within the current legislature. The Parliament's international trade committee adopted its negotiation position on 28 May and gave a mandate to Franck Proust MEP (EPP, France) to negotiate (see EUROPE 12028).
Proust has strengthened the Commission's proposals on the mechanism for collecting, analysing and sharing information on the profile and type of investor.
He also proposes to find out what the ultimate investor is, and to add an element of reciprocity to help the member states decide on whether or not to authorise an FDI from a third country.
In addition, Proust wants to extend the mechanism for the opinion of the Commission and member states to a third level: if the Commission considers that a takeover is dangerous and that at least a third of the member states deem their national security to be threatened, the recipient country of the FDI should speak to the Commission and the other EU member states to find an alternative solution (which could involve imposing conditions on the investors for a key technology to remain in the EU – see EUROPE 11972). (Original version in French by Emmanuel Hagry)