EPRS Admin By / January 22, 2018

Formal FDI screening mechanisms in the EU

Formal FDI screening mechanisms in the EU

Absence, and large diversity in scope and design, of FDI screening mechanisms
The EU has no single centralised FDI screening mechanism on grounds of security or public order. FDI screening is the exclusive responsibility of EU Member States under EU law, and national security exceptions under international law. To date, no formal coordination among Member States and between Member States and the Commission exists in this field. FDI screening is conducted independently from merger control reviews under EU competition law at EU and Member State levels.
According to the European Commission, 12 Member States (see Figure 1) have legislation in place which allows them to review FDI on grounds of security or public order, in line with international and EU law. EU Member States’ screening mechanisms vary significantly in scope (review of intra- or extra-EU FDI; differing screening thresholds, breadth of sectors covered beyond defence) and in design (pre-authorisation vs. ex-post screening of FDI)

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