As expected, the European Commission has agreed to provisional rules that would require all member states to enhance screening of foreign investments. The agreement builds upon a more fragmented screening regime that has been effective since 2020, and would emphasize defense, AI and more.
Last week, the European Union published its fifth annual report on foreign investment screening. Member states notified 477 investments into the FDI mechanism; the vast majority (92%) were closed within two weeks. Only 8% required in-depth security risk assessment. Details, report inside.
An international organization that promotes policies to improve economic growth has updated its FDI restrictiveness index, which compares policies across more than 100 economies. The report notes that FDI restrictions have eased over time, but the pace of liberalization is slowing down. Details, report inside.
A massive new 278-page UN report notes, among other things, significant “regional disparities” in FDI screening globally. In Europe, for example, 78% of newly adopted investment policies seem to favor investors. In North America, 92% were less favorable to investors. Details, full report inside.
Last week, the European Parliament updated rules that will make certain foreign investments subject to mandatory screening by member states. The rules, which include screening for greenfield investments, are intended to prevent foreign investment-related security or public order risks. Details inside.
Last week, the European Commission urged its member states to scrutinize outbound investments in non-EU countries, and to do so for the same technologies impacted by the U.S. outbound regime: semiconductors, quantum and AI. Details and related EU documents are inside.
Last week, the European Union proposed a number of initiatives to strengthen economic security. Among them: changes to address shortcomings in existing screening mechanisms, and a “step-by-step analysis of outbound investments.” Details, white papers, fact sheets, and proposals inside.