Published 8 January 2020
While being open to foreign investment, the European Union has witnessed some new investment trends which have recently raised important concerns and attracted political and public attention. In particular, the influx of Chinese foreign direct investment by State-controlled entities (SCEs) and State-owned enterprises (SOEs) in the EU has triggered a strong call for a screening mechanism in the still decentralised and fragmented EU environment. In response to this changing economic reality, the EU adopted in March 2019 a new regulation, which has entered into force in April 2019. The regulation should provide an answer to the increasing role of non-traditional sources of FDI and safeguard strategic European assets. This change in EU investment policies is motivated by national security concerns, but there is always a risk that it could be used as a protectionist tool in the future. It is to be seen whether the EU is able to protect its essential security interests as well. This article explores the recent development of screening regulations in the EU and its ramifications for SOEs as well for the broader policy context.
This paper will be part of the TDM Special Issue on "The Changing Paradigm of State-controlled Entities Regulation: Laws, Contracts and Disputes". More information here https://www.transnational-dispute-management.com/news.asp?key=1719