European Parliament Approves New EU Foreign Investment Rules for Sensitive Sectors
Overview of the New EU Foreign Investment Legislation
By Julia Payne
Parliamentary Approval and Next Steps
BRUSSELS, May 19 (Reuters) - The European Parliament voted through new foreign direct investment rules provisionally agreed in December with its co-legislator the Council of the EU, which represents EU countries.
- The new legislation still needs to be formally approved by the Council before entering into force 18 months later.
Key Provisions of the Legislation
Mandatory Screening in Sensitive Sectors
- Once adopted, EU countries will be required to screen investments in sensitive sectors such as defence, dual-use goods and critical technologies
Specific Sectors Covered
- Specifically these include: AI, quantum and semiconductors; raw materials; entities in aerospace, energy, transport and digital infrastructure; financial system entities; and electoral infrastructure such as registration databases and voting systems.
Expansion of Scope and Streamlining
- The revised rules expand the scope beyond FDI to include intra-EU investment by companies ultimately owned by third country investors and streamline screening parameters across the 27-country trade bloc in order to provide more certainty to investors.
Statements from EU Lawmakers
“With this text, we are closing a chapter of European naivety. Certain foreign states are seeking to weaken us. We are turning the page on the wilful blindness of member states that allowed foreign actors to seize control of sensitive sectors of our economy. But our work on foreign investment is not finished – the fight for Europe's independence and sovereignty continues, now with the proposed Industrial Accelerator Act," Raphael Glucksmann, the EU lawmaker who led the file, said in a statement.
(Reporting by Julia Payne; Editing by Chizu Nomiyama )
