Raphaël Glucksmann MEP (S&D, French) has presented a first draft of his report on the Regulation revising Foreign Direct Investments (FDIs) screening, which will be debated on Wednesday 29 January by the European Parliament’s Committee on International Trade.
The rapporteur feels that the Commission’s proposal is a good one at this stage, particularly in view of its fairly broad scope. However, he suggests strengthening the Regulation and its effectiveness by harmonising procedures as far as possible and setting stricter time limits for investigations.
One of Mr Glucksmann’s battles will be to convince his colleagues in Parliament, and then the Member States in the EU Council, that the scope of the Regulation, as proposed by the Commission, must not be reduced. In his view, it is crucial to protect strategic economic sectors in a broad way, and to go beyond the criterion of public security. This is to preserve Europe’s industrial fabric. In an amendment, he stresses that economic security “forms an integral part of public order”.
With this in mind, the rapporteur proposes to broaden the decision-making criteria for limiting FDIs. The “availability and uptake of critical technologies, technology security and technology leakage” must also be taken into account in the decision, he said.
Investigative and decision-making powers. Strengthening the screening mechanism at EU level also means giving the European Commission additional powers both in the investigation of FDIs and in the decision to be taken concerning it. The rapporteur proposes to give the Commission investigative powers in certain specific cases where the authorities of a Member State would be hampered in their investigation because the transaction in question crossed their borders.
“For example, this could be the case where customers of the target company are located in another Member State, while their views may be essential to assess the target’s sensitivity to security or public order risks. [...] Given its cross-border perspective, the Commission is well-placed to address those limitations and contribute to the assessment”, explains Mr Glucksmann.
He also argues that the Commission should have the final say in the event of disagreements between two Member States over the authorisation of FDIs, as well as in a situation where the Commission objects to the authorisation of a transaction by the authorities of a Member State.
Decision on FDIs. In order to clarify the framework for action by the authorities, the rapporteur proposes a list of mitigation measures that may be imposed on an investor when FDIs are considered to be hight-risk.
In his view, this may involve changes to the governance of the receiving structure, changes to the investor’s voting rights within the new structure, preventing the investor from gaining access to sensitive information or technology, or requiring the investor to source critical components from secure and reliable suppliers.
See the draft report: https://aeur.eu/f/f83 (Original version in French by Léa Marchal)