EU to enact new controls to screen FDIs

Brussels, March 5 (IANS) The European Union (EU) has decided to formulate and enact a new set of controls to better scrutinise direct investments coming into the bloc from third countries on the grounds of security or public order, the EU council said in a statement, here on Tuesday.

This was the first time the EU had decided to furnish itself with a comprehensive set of rules, while its major trading partners had already similar controls in place, the council added, reported Efe news.

"The new rules on screening of investments will ensure that openness goes hand in hand with sensible protection of our strategic assets," said Stefan-Radu Oprea, Minister for Business Environment, Trade and Entrepreneurship of Romania and President of the council.

The council said regulations would establish a solid and stable framework for the screening of foreign direct investments (FDIs) into the EU. Internal negotiations on the subject were concluded on November 20, 2018.

The framework for rules should allow for coordinated methods of being able to scrutinise inward investment at a community level.

The objective of all this was to be able to avoid investments from countries, such as China, which could possibly pose a threat to security or public order within the community, one of the most open in the world, the statement said.

Part of the new screening device would include a cooperation mechanism where member states and the commission would be able to exchange information and raise specific concerns over investments.

Member states will nevertheless retain the ability to review and potentially bar FDI on security and public order grounds.

The decision to set up and maintain national screening mechanisms will also remain in the hands of individual member states, the statement said.

The commission will be authorised to issue opinions in cases concerning several member states, or when investments could affect a project or program of interest to the EU as a whole, such as Horizon 2020 or Galileo.

The new regulations are set to be published on March 21, the council said and added they would come into force 20 days later. "The EU is and will remain one of the world's most open places to invest in," Oprea said.