Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-25T06:44:37.687Z Has data issue: false hasContentIssue false
  • English
  • Français

The EU’s FDI Screening Proposal – Can It Really Work?

Published online by Cambridge University Press:  02 December 2019

Chi-Chung Kao
Chi-Chung Kao*
Affiliation:
National Taipei University of Business (NTUB), No. 321, Section 1, Jinan Road, Taipei100, Taiwan, Republic of China. Email: cckao1972@ntub.edu.tw
Get access Rights & Permissions [Opens in a new window]

Abstract

Nowadays China and EU share close investment relations. However, concerns have been raised over FDIs (Foreign Direct Investments) aimed at sensitive sectors, especially those from Chinese state-owned companies. In light of this, the European Commission in late 2017 proposed a FDI Screening Regulation. This proposal contains certain features, including cooperation mechanisms between Member States and the Commission to notify and give comments on FDIs, direct monitoring of FDIs by the Commission on the grounds of Union interests, and the illustration of instances to be considered when screening FDIs. However, the success of this proposal is in doubt. Its fate regarding being adopted as law through the EU’s legislative process is uncertain, due to the Member States’ divided attitude towards FDI screening. Its provision contains a lethal loophole, undermining the cooperation and exchange of information between the Member States and the Commission. The non-binding nature of the opinions and comments addressed to the FDI receiving Member State renders the mechanisms practically unenforceable. To establish an effective FDI screening framework for the EU, this proposal needs to be revised and amended.

Type
Articles
Information
European Review , Volume 28 , Issue 2 , April 2020 , pp. 173 - 184
Copyright
© Academia Europaea 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

EUobserver (2017a) Chinese the Most Bullish on EU Investment, Report Finds. 24 November 2017. Available at https://euobserver.com/eu-china/140016 (accessed 21 August 2019).Google Scholar
EUobserver (2017b) Macron’s Investment Screening Idea Watered Down by Leaders. 23 June 2017. Available at https://euobserver.com/economic/138341 (accessed 21 August 2019).Google Scholar
EUobserver (2017c) EU Preparing to Screen Chinese Investments. 14 September 2017. Available at https://euobserver.com/economic/139015 (accessed 21 August 2019).Google Scholar
EUobserver (2018) EU ‘In Search of Lost Time’ on Trade Defense. 28 May 2018. Available at https://euobserver.com/economic/141918 (accessed 21 August 2019).Google Scholar
European Commission (2017a) Commission Staff Working Document Accompanying the Document Proposal for a Regulation of the European Parliament and of the Council Establishing a Framework for Screening of Foreign Direct Investments into the European Union (SWD/2017/0297 final - 2017/0224 (COD)). Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2017:297:FIN (accessed 21 August 2019).Google Scholar
European Commission (2017b) Proposal for a Regulation of the European Parliament and of the Council Establishing a Framework for Screening of Foreign Direct Investment into the European Union (COM/2017/0487 final - 2017/0224 (COD)). Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52017PC0487 (accessed 21 August 2019).Google Scholar
European Commission (2017c) Annex to the Proposal for a Regulation of the European Parliament and of the Council Establishing a Framework for Screening of Foreign Direct Investment into the European Union (COM(2017) 487/947969). Available at https://ec.europa.eu/info/law/better-regulation/initiatives/com-2017-487_en (accessed 21 august 2019).Google Scholar
Lavranos, N (2018) Some critical observations on the EU’s foreign investment screening proposal. Kluwer Arbitration Blog, 2 January 2018. Available at http://arbitrationblog.kluwerarbitration.com/2018/01/02/critical-observations-eus-foreign-investment-screening-proposal/ (accessed 21 August 2019).Google Scholar