European Commission issues FDIC screening reports

The European Commission has published its third Annual Report on Foreign Direct Investment (FDI) screening, revealing key findings and highlighting measures taken to safeguard European security and public order. The report analysed over 420 foreign direct investments into the European Union (EU) and emphasised that the EU’s mechanism for screening FDI does not restrict the EU’s openness to such investments. The top six sources of FDI into the EU in 2022 were the United States, United Kingdom, China, Japan, the Cayman Islands, and Canada.

The report also highlighted that most FDI cases concerned the manufacturing sector, covering various industries such as energy, aerospace, defence, semiconductors, health, data processing and storage, communication, transport, and cybersecurity. It noted that the FDI Screening Regulation has enabled the prevention of investments that pose security or public order risks without restricting the overall flow of foreign investment into the EU.

In addition to the FDI screening report, the European Commission also published a statistical update on the implementation of the Export Controls Regulation. The update provides 2021 licensing data collected using a methodology developed voluntarily with Member States under the previous Dual-Use export control regulation. This update aims to enhance transparency in export controls in line with the requirements of the current Dual-Use export control Regulation 821/2021.

The European Commission’s efforts in monitoring and regulating FDI and export controls contribute to ensuring the security and public order of the EU while facilitating foreign investment and trade.