Regulation (EU) 2019/452 establishing a framework for screening of foreign direct investments into the European Union

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Series Details L 79I
Publication Date 21/03/2019
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Summary:

Regulation of the European Parliament and of the Council of 19 March 2019 setting up a framework for screening foreign direct investment (FDI) into the European Union.

Further information:

The proposed Regulation, presented by the European Commission on 13 September 2017, includes:

  • a European framework for screening of foreign direct investments by Member States on grounds of security or public order;
  • a cooperation mechanism between Member States and the European Commission;
  • screening on grounds of security or public order for cases in which foreign direct investment in Member States may affect projects or programmes of Union interest.

This draft law responds to concerns about foreign investors, notably state-owned enterprises, taking over European companies with key technologies for strategic reasons, in a scenario where EU investors often do not enjoy the same rights to invest in the country from which the investment originates.

While the proposed Regulation was going through the ordinary legislative procedure, the European Commission decided to immediately proceed with two additional measures: setting up a coordination group on inward foreign direct investment, chaired by the Commission and comprising representatives from Member States; conducting an in-depth analysis of foreign direct investment flows into the European Union.

This proposal was adopted alongside the accompanying Communication on Welcoming foreign direct investment while protecting essential interests. Following the adoption of their respective negotiating positions, the European Parliament and the Council of the European Union reached an informal agreement on a compromise text on 20 November 2018. The European Parliament formally endorsed it on 14 February 2019.

Source Link https://eur-lex.europa.eu/legal-content/EN/AUTO/?uri=uriserv:OJ.LI.2019.079.01.0001.01.ENG
Related Link(s)
Commentary and Analysis
EurActiv, 21/09/2017: Don’t protect us from doing business! http://www.euractiv.com/section/economy-jobs/opinion/dont-protect-us-from-doing-business/
EPRS: Briefing, February 2019: EU framework for FDI screening http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2018)614667

News
Reuters, 13/09/2017: France, Germany, Italy welcome EU push to curb foreign takeovers https://uk.reuters.com/article/idUKKCN1BO1F1
EUObserver, 14/09/2017: EU preparing to screen Chinese investments https://euobserver.com/economic/139015
EurActiv, 16/07/2018: China set to fully control Portugal’s power grid amid Europe’s inertia https://www.euractiv.com/section/eu-china/news/china-set-to-fully-control-portugals-power-grid-amid-europes-inertia/
EurActiv, 14/02/2019: Europe strengthens monitoring of foreign investment https://www.euractiv.com/section/economy-jobs/news/europe-strengthens-monitoring-of-foreign-investment/
Bloomberg, 14/02/2019: Europe's investment-screening plan clears final political hurdle https://www.bloomberg.com/news/articles/2019-02-14/europe-s-investment-screening-plan-clears-final-political-hurdle
France24, 14/02/2019: EU lawmakers greenlight screening of Chinese investment https://www.france24.com/en/20190214-eu-lawmakers-greenlight-screening-chinese-investment
Kathimerini, 14/02/2019: EU lawmakers back investment screening http://www.ekathimerini.com/237704/article/ekathimerini/business/eu-lawmakers-back-investment-screening
Reuters, 14/02/2019: With eyes on China, EU lawmakers back investment screening https://www.reuters.com/article/idUSKCN1Q31JU

Official
EUR-Lex: COM(2017)487: Proposal for a Regulation establishing a framework for screening of foreign direct investments into the European Union http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2017:487:FIN
EUR-Lex: SWD(2017)297: Commission Staff Working Document accompanying COM(2017)487 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2017:297:FIN
European Parliament: Legislative Observatory: Procedure File for Proposal on screening of foreign direct investments into the European Union http://www.europarl.europa.eu/oeil-mobile/fiche-procedure/2017/0224(COD)
European Parliament: Legislative Train: Screening of foreign direct investment in strategic sectors http://www.europarl.europa.eu/legislative-train/theme-a-balanced-and-progressive-trade-policy-to-harness-globalisation/file-screening-of-foreign-direct-investment-in-strategic-sectors
European Commission: Press Release, 14/09/2017: Trade Package: European Commission proposes framework for screening of foreign direct investments http://europa.eu/rapid/press-release_IP-17-3183_en.htm
United Kingdom: House of Lords: EU External Affairs Sub-Committee: EU Foreign Direct Investment screening framework (November 2017) https://www.parliament.uk/business/committees/committees-a-z/lords-select/eu-external-affairs-subcommittee/scrutiny-work/parliament-2017/foreign-direct-investment-screening/
European Parliament: Press Release, 26/01/2018: Ensuring foreign direct investment does not harm Europe's interests http://www.europarl.europa.eu/news/en/headlines/economy/20180122STO92231/
Council of the European Union: Press Release, 13/06/2018: Screening of investments: Council agrees its negotiating stance http://www.consilium.europa.eu/en/press/press-releases/2018/06/13/screening-of-investments-council-agrees-its-negotiating-stance/
European Commission: Press Release, 14/02/2019: Commission welcomes European Parliament's support for investment screening framework http://europa.eu/rapid/press-release_IP-19-1052_en.htm
European Parliament: Press Release, 14/02/2019: EU to scrutinise foreign direct investment more closely http://www.europarl.europa.eu/news/en/press-room/20190207IPR25209/
European Commission: Press Release, 10/04/2019: EU foreign investment screening regulation enters into force http://europa.eu/rapid/press-release_IP-19-2088_en.htm

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