In last month's Antitrust in focus, we reported that the European Parliament had reached its negotiating position on revisions to the EU Foreign Direct Investment (FDI) Regulation.
As a reminder, the revised regulation looks set to require all member states to adopt a national FDI screening regime—as of this month, 25 already have such a mechanism, with Greece being the latest adopter (see our article below). The new rules will require mandatory screening of foreign investments in certain specified sectors and ensure national rules are more harmonized. Expanding the scope of the regime to cover indirect investments is also likely, and we may see the European Commission (EC) gain more powers of intervention.
Ultimately, the impact of these revisions will depend on the detail of the updated regulation.
The latest step in the process is the adoption by the European Council (Council) of its own position on the proposed amendments. Significantly, this differs from the European Parliament's stance in some key areas, with the Council focusing on more limited harmonization and greater discretion for member states (favoring a more limited role for the EC).
The Council also has its sights on a narrower list of sectors in which investment must be screened, restricting these to dual-use items subject to export controls and goods and technology listed in the EU Common Military List.
The EC had proposed a much longer list, and the Parliament's proposals added significantly to this. However, while the Council proposes that member states should consider the availability of technologies contained in this longer list when determining whether a foreign investment is likely to negatively affect security or public order, it does not propose that investment in these sectors should be subject to mandatory screening. In this longer list, the Council is on board with some of the additions put forward by the Parliament but has not, for example, accepted the Parliament's proposal to add areas such as media services or types of transport industries.
These divergences will make for some interesting, and no-doubt animated, debates between the two institutions and the EC as they negotiate to reach a final revised text. The discussions kicked off in mid-June.
We will update you as we learn more.
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