Repeal of Regulation (EU) 2019/452
This regulation updates the framework for screening foreign investments in the EU to better protect security and public order. It aims to create a more harmonised and consistent approach across all Member States when assessing potential risks from foreign direct investments. The rules affect Member States, the European Commission, and foreign investors looking to invest in the EU. It strengthens the cooperation mechanism between Member States and the Commission to identify and address risks to security and public order. Key changes include requiring all Member States to screen foreign investments, harmonising core elements of national screening mechanisms, and expanding the scope to include greenfield investments and investments in critical infrastructure or technologies. The Commission gains more power to issue opinions and coordinate responses. Acquisitions through bank or insurance resolution tools are excluded from the scope of this regulation to avoid financial stability risks. The rules also encourage Member States to publish guidance on their screening procedures and risk assessment criteria.
Analysis
The Union welcomes foreign investments as they contribute to its growth by improving competitiveness, creating jobs, and bringing capital, technologies, innovation, and expertise.
What changes
- The proposal aims to establish a framework for screening foreign investments in the Union and repeals Regulation (EU) 2019/452.
- The regulation introduces a harmonized approach to foreign investment screening, including the scope of investments, screening procedures, and interaction with the Union cooperation mechanism.
- The cooperation mechanism is maintained and strengthened, enabling Member States and the Commission to exchange information and address risks to security or public order.
Expected impact
- Divergences in national screening mechanisms create an uneven playing field and increase compliance costs for investors, which this regulation aims to reduce by harmonizing key elements.
- The regulation proposes to exclude acquisitions through resolution tools for financial institutions to avoid financial stability risks, as these procedures require timely responses.
- The proposal seeks to ensure that screening foreign investments is carried out proportionally and in compliance with Union law, particularly concerning freedom of establishment and free movement of capital.
Limitations
- The document is a legislative report and does not contain the full text of the proposed regulation, limiting the analysis to the recitals and amendments presented.
- Specific details on the implementation of the digital system for information exchange and the single electronic portal are not provided in this text.
Shadow Rapporteurs
Some data sources haven't been updated in over 48 hours.