EU Parliament Approves Expanded FDI Screening Rules
The full European Parliament last week voted to expand the bloc’s foreign direct investment screening rules, which would add more sectors to the scope of restrictions and allow the European Commission to intervene in member state disagreements.
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Parliament voted 378-173, with 24 abstentions, to approve the new rules. The vote comes about a month after the Parliament’s International Trade Committee also approved the rules (see 2504080027), which would expand the bloc's FDI screening scope to include the media services, critical raw materials and transport infrastructure industries. It would also help to harmonize FDI screening mechanisms used by various member states and will give the European Commission “the power to intervene" when there are disagreements between states, Parliament said.
Raphael Glucksmann, a Parliament member from France, said the EU's current investment screening system "is fragmented, costly for investors, and insufficiently effective at mitigating risks." He said leaving European industrial plants, energy grids and media companies open to foreign takeovers, "whether from China, the US, or elsewhere," puts EU security at risk.
"Screening procedures will now be streamlined across member states, keeping the single market open and attractive, while also protecting our industries, safeguarding key sectors, and allowing our strategic industries to become more competitive," Glucksmann said. "The Commission will have the authority to take final decisions in instances of disagreement, ensuring a more unified approach across the EU."
Parliament members will next negotiate with member states on the final version of the law.