EU Council approves new framework for foreign direct investment screening

On Monday, the Council of the European Union approved a new regulation to revise the framework for screening foreign direct investment (FDI). This update replaces the previous system, which has been in place since 2020. The primary objective is to enhance the Union's ability to identify, evaluate, and address security and public order risks associated with foreign investments. The new framework mandates that all member states establish screening mechanisms that cover a common minimum set of sensitive sectors and technologies. Included in these priority areas are critical raw materials and essential infrastructure. Michalis Damianou, the Minister of Energy, Commerce, and Industry, stated that the move allows the EU to protect strategic assets while remaining open to international investment. The regulation aims to provide greater consistency across all member states by ensuring a more coordinated and effective approach to security. This decision comes in response to heightened geopolitical competition and the need to protect the economic security interests of the EU.