site.btaEU Introduces Harmonized Screening Rules for Foreign Investments

The Council of the European Union announced that it has adopted amendments to the EU framework for screening foreign investments and assessing their potential impact on security and public order. Under the new rules, EU Member States will be required to align the scope of their investment screening mechanisms in sensitive sectors.

The changes will apply to foreign investments in technologies and infrastructure, including dual-use goods and military equipment, critical raw materials, artificial intelligence, energy, transport and digital infrastructure. The rules will also cover investments made by foreign companies through subsidiaries registered within the European Union.

The Council noted that the EU's first legislation on foreign investment screening entered into force in 2020, but significant differences have remained among Member States in terms of scope, thresholds, timelines and procedures.

According to the Council, growing threats to critical infrastructure, vulnerabilities in supply chains and the rapid development of dual-use technologies have demonstrated the need to update the existing legislative framework.