Finance
EU reaches provisional deal on screening foreign investment
Published by Global Banking & Finance Review®
Posted on December 11, 2025
2 min readLast updated: January 20, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on December 11, 2025
2 min readLast updated: January 20, 2026
The EU has reached a provisional deal to screen foreign investments in sensitive sectors to protect economic security, focusing on reducing reliance on China.
BRUSSELS, Dec 11 (Reuters) - The European Union reached a provisional agreement on Thursday on new rules to require all its members to screen foreign investment into the bloc in sensitive sectors such as defence, AI or critical minerals and determine if they threaten economic security.
Representatives of the European Parliament and the Council, the grouping of EU governments, reached an agreement on a text to revise its existing FDI screening regulations. Both bodies will still have to approve the text.
The revision will require all EU countries to screen and possibly block investments if they pose a security risk. Screening will also extend to investments within the EU if the investor is controlled by a foreign company.
The initial proposal did not name any country, but contrasts "reliable partners" with "countries of concern" and highlights "de-risking", the bloc's policy of reducing economic reliance on China, which has placed curbs on exports of rare earths and chips.
Screening will be required for foreign investments in military and dual-use equipment, 'hyper-critical' technologies such as AI, quantum technologies and semiconductors, critical raw materials, critical energy, transport of digital infrastructure and voter systems or databases.
Central counterparties, central securities depositories, operators of regulated markets or payment systems and systemically important financial institutions are also included.
Screening decisions remain the responsibility of the EU member where the investment is being made, but the European Commission can give its opinion.
"Today’s agreement strengthens the EU’s capacity to protect its security and public order, while ensuring Europe remains an attractive destination for investors," Danish Business and Industry Minister, Morten Bodskov, whose country holds the rotating EU presidency, said in a statement.
(Reporting by Louise Breusch Rasmussen and Philip Blenkinsop, editing by Inti Landauro and Toby Chopra)
Foreign investment refers to the investment made by individuals or entities in one country into assets or businesses in another country, often to gain a financial return.
Economic security is the condition of having stable income or resources to support a standard of living now and in the foreseeable future, ensuring individuals and nations can withstand economic shocks.
Investment screening is the process of evaluating foreign investments to determine if they pose any risks to national security or economic stability, often leading to potential restrictions or blocks.
Financial regulations are laws and rules that govern financial institutions and markets, aimed at maintaining the integrity of the financial system, protecting consumers, and ensuring stability.
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