The art of casting political dissent in law: The EU’S framework for the screening of foreign direct investment

Abstract

This paper describes and analyses the EU Regulation establishing a framework for the screening of foreign direct investments (FDI) into the Union. The negotiations that preceded the adoption of the Regulation were characterized by greatly divergent views of Member States on the proper use of FDI screening. Under such conditions, the Regulation's framework for administrative cooperation and information sharing was as much as the Commission could hope for. The main challenge going forward lies in balancing the policy priorities of individual Member States in determining what constitutes a threat to security and public order, with the needs of the collective, that is the EU. In that respect, the indicative criteria set out in the Regulation may initiate a drive towards a rough consensus. While any ambition to fully harmonize FDI screening has now become only a long-term goal, this paper finds that the Regulation has established a nascent EU screening mechanism, albeit a well-camouflaged one.