The European Union has introduced stricter screening rules for foreign investments, expanding its oversight to safeguard critical sectors and EU-wide security. The revised framework, adopted by the European Parliament’s trade committee, aims to better detect and mitigate potential risks posed by foreign entities seeking control over sensitive European assets.
Originally implemented in 2020, the foreign direct investment (FDI) screening mechanism was created in response to concerns about foreign actors targeting firms vital to Europe’s security and public order. The new rules extend mandatory screening to additional sectors, including media services, transport infrastructure, and critical raw materials—areas deemed essential for the EU’s strategic autonomy.
The reform also standardizes national screening procedures and strengthens the European Commission’s authority. The Commission will now be empowered to intervene independently or mediate when Member States disagree on whether a specific foreign investment poses a threat.
If a screening body determines that a foreign investment could compromise public security or order, it will be required to either impose risk-reducing conditions or block the transaction outright.
“This reform brings predictability and consistency,” said MEP Raphaël Glucksmann, Parliament’s rapporteur for the legislation. “It strengthens our ability to protect EU interests while giving investors greater transparency on the rules.”
The enhanced framework marks a major step in fortifying the EU’s economic resilience and ensuring foreign investments align with its strategic interests.