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1 1 (March 5, 2019)

handle is hein.crs/govyim0001 and id is 1 raw text is: Congressional * Research Service EU Finalizes FDI Screening Framework March 5, 2019 On February 14, 2019, the European Parliament approved a regulation (an EU law) that establishes a cooperation mechanism for screening foreign direct investment (FDI) in EU members that focuses on foreign investment in critical technologies. This action follows those of other jurisdictions, including the United States through enactment of the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) that enhanced the role of the Committee on Foreign Investment in the United States (CFIUS), to increase scrutiny of FDI as a component of national security. The legislation was approved by the EU members on March 5, 2019; this will be followed by an 18-month implementation period. The new EU-wide cooperation mechanism aims to enhance scrutiny of FDI in: 1) critical infrastructure, including in the energy, transport, communications, data, space and financial industries, as well as sensitive facilities; 2) critical technologies, including artificial intelligence, robotics, semiconductors, technologies with potential dual-use applications, cybersecurity, space, or nuclear technology; and 3) critical inputs, including the security of supplies of energy, raw materials or food or access to sensitive information, or the ability to control sensitive information. The new framework * Creates a block-wide cooperation mechanism where members can share information on foreign investments, exert peer pressure, or comment on transactions in another member state; * Allows the European Commission to issue opinions when an investment is believed to threaten the security or public order of more than one member state, or when an investment could undermine a project or program of interest to the whole EU; * Encourages international cooperation on investment screening; * Sets certain requirements for member states that maintain or adopt a screening mechanism; and * Recognizes the need to operate under short deadlines and confidentiality requirements. The EU market is generally considered open to foreign investment. According to the U.S. Bureau of Economic Analysis, U.S. direct investment in the EU in 2017 totaled $3.6 trillion, or slightly more than half of all U.S. FDI; EU direct investment in the United States in 2017 totaled $2.7 trillion, or two-thirds of total FDI in the United States. The EU has not had a comprehensive regime for controlling or screening foreign investment that raise national security concerns; 14 of the EU countries have their own national requirements. Until EU members adopt their own regulations, it is uncertain how the new EU screening Congressional Research Service https://crsreports.congress.gov IN11064 CRS INSIGHT Prepared for Members and Committees of Congress

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