In a strategic move to bolster economic security, the European Commission is set to unveil a proposal next week, outlining a law that mandates all EU member countries to conduct comprehensive scrutiny of foreign investments to assess potential security risks, according to a document seen by Reuters.
Since 2020, EU nations with existing national screening systems have been obligated to share information on potential security or public order threats arising from investments, especially those impacting neighboring countries or the entire bloc. The European Commission retains the authority to issue opinions if it identifies risks in critical areas such as ports, nuclear plants, or the semiconductor sector.
Currently, countries without established screening systems are not compelled to implement one. As of September last year, six EU member states had not yet adopted such systems. The European Court of Auditors highlighted in December that the EU's oversight of foreign investments had blind spots due to varying approaches among member states.
The proposed law aims to establish common standards and timelines, ensuring a level playing field, reducing compliance costs for foreign investors, and preventing the emergence of new obstacles to investments. While EU nations where investments are planned will retain the final decision-making authority, they will be required to give due consideration to any comments or opinions from the Commission or other EU members.
The move reflects the EU's commitment to fostering a unified and secure economic environment, addressing previous challenges highlighted by the European Court of Auditors. The proposed legislation seeks to streamline the screening process, reinforcing the bloc's economic resilience and promoting a harmonized approach to foreign investments.
