Members of the European Parliament’s Committee on International Trade (INTA) approved the report by Raphaël Glucksmann (S&D, French) on screening foreign direct investments (FDIs) by 31 votes to 7 with 3 abstentions on Tuesday 8 April. All MEPs could approve this version during the May plenary session.
The vote covered 26 compromise amendments between the EPP, S&D, Renew Europe, Greens/EFA and The Left groups. Overall, the INTA committee has strengthened the European Commission’s proposal for a regulation by broadening the objectives of investment screening. For rapporteur Raphaël Glucksmann, it is a question of clearly including the notion of economic security in the text’s objectives.
This means that the list of areas where an FDI is likely to have a negative impact has been extended, and must be taken into account at the time of assessment. This list now includes the security of military installations and other public infrastructures, food security and the ability to avoid strategic dependencies.
MEPs also agreed to add “greenfield investments” to the types of transactions to be screened, provided they exceed €250 million.
On the other hand, the report adopted in INTA excludes from the screening process the purchase of financial institutions in difficulty by “resolution tools”, insofar as these investments must be made very quickly.
Increased powers for the Commission. The rapporteur has persuaded his colleagues to give the European Commission power to investigate and take decisions when an FDI is the subject of disagreement between two Member States or when the Commission itself considers that the decision taken by the Member State in which the investment is located does not ensure public order, as the regulation aims to do.
In such a case, the Commission may authorise the investment subject to conditions, or prohibit it. Such a decision will have to be based on “documented risks and take into account all the circumstances of the investment”.
As part of its investigations, the Commission should also be able to impose fines on operators who fail to provide the information requested, according to the INTA committee. However, penalties should not exceed 1% of the turnover of the entity concerned. Periodic fines of up to 5% of average daily turnover may also be imposed where the information provided is incorrect.
More framework for the screening procedure. MEPs are proposing to slightly reduce the deadlines for Member States to notify their screening mechanisms to the Commission: they will have to do so within 12 months of the regulation coming into force.
In addition, the regulation should apply to Member States 12 months after its entry into force, rather than 15 months as proposed by the Commission.
Finally, Raphaël Glucksmann’s report sets out more precise guidelines for exchanging information between Member States. All data communicated under the regulation must be done so via the secure and encrypted system provided by the Commission. This should include a database containing all the investments analysed and their data. (Original version in French by Léa Marchal)