7 March 2019
The EU Regulation establishing a framework for the screening of foreign direct investments into the EU will become applicable on 10 October 2020.
The Regulation will allow the Commission to review (but not block) certain investments of "Union interest" and to issue a non-binding opinion to the member state in which the investment takes place. It also clarifies the scope of the issues that member states may take into account when applying their national screening regimes without falling foul of EU law, sets certain common standards for those regimes and implements a system of cooperation and information exchange between member states and the Commission.
The legal confirmation that member states may legitimately block foreign takeovers involving critical infrastructure, technologies, raw materials and sensitive information is likely to lead to some member states introducing new foreign investment screening regimes or broadening the scope of their existing regimes. This, combined with increased exchanges of information between member states, will lead to transactions being scrutinised on public interest and national security grounds that are not, at present, caught.