The European Parliament has approved a new European Union framework on the screening of foreign investments, aimed at strengthening security and preventing risks to public order and the strategic interests of the bloc.
The decision was adopted with 508 votes in favour, 64 against and 90 abstentions, following an agreement between Parliament and Council negotiators.
Focus on sensitive sectors
Under the new rules, mandatory screening will apply to foreign direct investments in sensitive sectors such as defence, semiconductors, artificial intelligence, critical raw materials and financial services.
The framework is designed to identify and address potential risks linked to security or public order, while maintaining the EU’s openness to global capital flows.
Stronger coordination across the EU
The legislation also introduces a more harmonised approach to national screening mechanisms, aiming to reduce bureaucracy and enhance the EU’s attractiveness as an investment destination.
It strengthens coordination between national authorities and the European Commission through a structured cooperation system to address cross-border risks.
The rules also extend to intra-EU transactions when ultimate control is exercised by investors from third countries.
Economic security and strategic autonomy
The new framework reflects the EU’s broader effort to strengthen economic security amid rising geopolitical tensions and global supply chain dependencies.
It is linked to wider Commission strategies aimed at accelerating industrial production and reducing vulnerabilities in critical technologies and resources.
The European Commission has also presented plans for an “Industrial Acceleration Act”, expected in March 2026, as part of this broader strategy.
Definition of control and influence
The regulation clarifies when a foreign investment is considered to create direct or indirect control over an EU company.
This includes cases where investors gain decisive influence through shares, voting rights, contractual arrangements or representation on corporate boards.
Political reaction and next steps
Rapporteur Raphaël Glucksmann said the new rules mark the end of European “naivety”, arguing that some third countries seek to weaken the European Union.
He added that the legislation represents a shift in how the EU approaches foreign investment in sensitive sectors.
Following Parliament approval, the regulation still requires formal endorsement by the Council of the European Union before entering into force. Implementation is expected to begin 18 months after official adoption.
Source: CNA
Also read: Trozena development backed by local leaders
For more videos and updates, check out our YouTube channel
