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Annual Report on the screening of foreign direct investments into the EU

On November 23, 2021, the European Commission presented key findings related to defending EU interests when it comes to export controls and foreign investments in the EU.

The Commission screened 400 foreign investments since the new Foreign Direct Investment (FDI) screening legislation entered into force. While only in place since a year, there has been an impressive take-up of this mechanism.

At the same time, over 30,000 requests for the export of goods with potential military use were reviewed by Member States under the EU Export Control regime, with 603 of these exports blocked.

Relating to FDI the report highlights:

  • The Commission screened 265 transactions notified by Member States under the report until end of June 2021 (now the teller is above 400);

  • 80% of the transactions did not justify further investigation and were thus assessed by the Commission in just 15 days;

  • Most notifications for screening from Member States concerned the manufacturing sector, ICT, wholesale and retail;

  • The top five countries of origin of investors among notified FDI cases were companies located in: the United States, the United Kingdom, China, Canada and the United Arab Emirates;

  • The Commission issued an opinion in less than 3% out of 265 screened cases.

The report also indicates that Chinese investments in the European Union fell by almost two thirds in 2020 due to the Covid-19 pandemic and the restrictive measures applied on foreign capital to defend EU interests. Of the € 98 billion of total investment in the EU, the share of Chinese investments fell from 4% in 2019 (€ 13.4 billion) to 2.5% in 2020 (€ 2.45 billion).

The content of this article does not constitute legal advice, but has an informative function. For personalized legal advice, contact the firm by e-mail or by phone +39 06 916505710. © Dong & Partners International Law Firm, All rights reserved.

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