The European Parliament voted on February 14 in support of setting up an EU-level tool to screen foreign direct investment (FDI) on grounds of security to protect strategic sectors.
The new provisions on how to screen FDI were informally agreed between European Parliament negotiators and EU ministers, and were passed with 500 votes in favour, 49 against and 56 abstentions.
Although 14 EU member states already have FDI screening mechanisms, their regulations varied both in scope and design. “FDI has cross-border effects, which can now be addressed,” the European Parliament said in a statement.
The new regulation protects critical infrastructure such as energy, transport, communications, data, space, and finance; and technologies, including semiconductors, artificial intelligence, and robotics. The European Parliament said that is negotiators added sectors such as water, health, defence, media, biotechnology and food security to the list of industries with closer FDI scrutiny.
Under the new rules, EU member states can exchange information, with one state issuing comments on FDI targeting other member states, while the European Commission can ask for information and deliver its opinion to the country where the investment is planned, although the final decision would remain with the country in question, the European Parliament statement said.
The next step is for the European Council to formally endorse the agreement, which it expected to do on March 5. The regulation would enter into effect 18 months after its publication in the Official Journal of the EU.
In a separate vote, the European Parliament also passed new rules that will require banks to charge equally for cross-border payments in euro and domestic payments and make currency conversion costs transparent.
This is expected to lower transaction charges for individuals and businesses outside the euro zone, with expected savings of more than one billion euro a year, the European Parliament said.