EUROPEAN UNION: Commission Proposes Screening Framework for Foreign Investment

Friday September 15 2017

On 14^th September 2017, the European Commission (EC) unveiled proposals to set up a European framework for screening foreign direct investment into the European Union.  

The framework will be of particular interest to European Exchanges as its focus will be on the issue of Acquisitions by foreign state-owned or controlled companies in European Markets.

Essentially, the Commissions wants to mitigate security threats which may come about due to Acquisitions by foreign state-owned or controlled companies who are operating in European Markets:

The proposed framework will provide:

• A European framework for screening of foreign direct investments by Member States on grounds of security or public order, including transparency obligations, the rule of equal treatment among foreign investment of different origin, and the obligation to ensure adequate redress possibilities with regard to decisions adopted under these review mechanisms.
• A cooperation mechanism between Member States and the Commission. The mechanism can be activated when a specific foreign investment in one or several Member States may affect the security or public order of another.
• 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.
• The new EU-level will build on the national review mechanisms already in place in 12 Member States and will not affect EU countries’ ability to adopt any new review mechanisms or to remain without such national mechanisms. When it comes to decisions on foreign direct investments, the European framework will maintain the necessary national flexibility. Member States keep the last word in any investment screening.

For additional information please click the link above.