The

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

's foreign direct investment screening framework is defined in its FDI screening Regulation. The

Regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. Fo ...

applies in all member states directly. It does not currently harmonise the

FDI screening States use foreign direct investment (FDI) screening (investment screening for short) to prevent foreign investors from buying national assets at bargain prices or reducing competition, and to protect national security and critical infrastructure. ...

procedures of the

EU member states The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated population of over 449million as of 2024. The EU is often de ...

; they may conduct FDI screening as they wish. However, they must make their screening policy transparent by notifying the

European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...

and the other member states. This is to ensure that the FDI screenings operate fast, yet do not discriminate between different non-EU countries and do not disclose confidential and commercially sensitive information. In 2024, the European Commission made plans to oblige its member states to follow a minimum set of FDI screening standards, using

minimum harmonisation In mathematical analysis, the maximum and minimum of a function are, respectively, the greatest and least value taken by the function. Known generically as extremum, they may be defined either within a given range (the ''local'' or ''relative' ...

Current regulation

The regulation puts in place a mechanism for member states to exchange information making it easier to screen a foreign investment on grounds of security. When an EU member state conducts an FDI screening, it must notify the Commission and other member states as soon as possible. The other states and the European Commission can then submit comments if they consider the screening to affect security or public order in their country or in the other member states. FDI screening is defined as a procedure to "assess, investigate, authorise, condition, prohibit or unwind FDIs". One FDI that was likely screened and notified was the acquisition of Swedish

Volvo Cars Volvo Car AB, trading as Volvo Cars (, styled VOLVO in the company's logo) is a Sweden, Swedish multinational manufacturer of luxury vehicles. Volvo is headquartered in Torslanda, Gothenburg. The company manufactures SUVs, station wagons, and ...

by the Chinese car manufacturer

Geely Zhejiang Geely Holding Group Co., Ltd. (ZGH), commonly known as Geely Holding ( ; ), is a Chinese multinational automotive conglomerate headquartered in Hangzhou, China. The company was founded by, and is privately owned by Chinese entrepre ...

. In terms of overall screening volumes, for example, Germany screened (and notified the Commission of) 570 foreign direct investments in 2022.

References

{{reflist

External links

List
of EU member state FDI screening mechanisms Foreign direct investment Trade policy Foreign trade of the European Union