European Parliament approves new EU rules for screening of foreign investments
In a vote on May 19, the European Parliament approved new EU rules for the screening of foreign investments to prevent security risks.
With 508 votes in favour, 64 against and 90 abstentions, MEPs gave their green light to an agreement with EU member states on the mandatory screening of foreign investments in sensitive sectors such as defence, semiconductors, artificial intelligence, critical raw materials and financial services, in order to identify and address potential security or public order risks while remaining open to foreign capital inflows.
The procedures applicable to national screening mechanisms will be streamlined, to reduce complexity and make the EU a more attractive place to invest.
Cooperation among national screening authorities and with the European Commission will be enhanced, facilitating coordination and joint action on cross-border security risks.
The new law will also cover transactions within the EU where the investor is ultimately owned by individuals or entities from a non-EU country.
It was also agreed that further action at EU level is needed to address economic security risks resulting from foreign investments.
The European Commission also committed to take the initiative on setting the conditions for foreign investment in specific strategic sectors. The Commission delivered on this commitment by submitting a legislative proposal for an Industrial Accelerator Act on March 4 2026.
The new regulation now has to be formally approved by the Council of the EU too, before entering into force and being applied 18 months later.
(Photo: EC Audiovisual Service)
