EU Investment Screening: The European Commission calls on Member States to review tech investment risks in non-EU countries.

State of play

On 15 January 2025, the EU Commission published its Recommendation on reviewing outbound investments in technology areas critical for the economic security of the Union. The Recommendation aims to provide guidance on screening outbound investments made by EU investors in non-EU countries. It focuses on 3 key technologies: advanced semiconductors, AI and quantum.

This Recommendation is a part of the EU’s Economic Security Strategy which was first published in June 2023 and builds upon a White paper published in January 2024. The White paper which had been followed by a public consultation, had led the Commission to confirm, alongside respondents that there was a need to assess potential economic security risks linked to outbound investments from the EU. This newly published recommendation therefore aims to provide a common scope to structure the review and risk assessment while individual EU Member States individually decide the details of its implementation according to their specific circumstances.

What technologies does the Recommendation cover?

The Recommendation identifies the following technologies as areas of focus for the risk assessments conducted by EU Member States :

- Advanced Semi-conductors:

- Artificial Intelligence:

- Quantum technologies:

Which countries should be covered by these outbound investments screening?

Regarding the geographical coverage of these outbound investment screenings, the Commission recommends a “country neutral” approach and to not exclude a priori specific destinations. Additionally, the document encourages each EU Member State to prioritise their review activities based on the risk profiles of individual countries while coordinating with other EU Member States, the EU Commission, and “include when relevant, the past behaviour of the country concerned, including violations of the UN Charter”.

Timeline

EU Member States have 15 months to conduct this review and will have to cover ongoing and past transactions going back to 1 January 2021.

EU Member States will then provide a progress report by July 2025, and a comprehensive report on their implementation of the Recommendation and any risks identified by 30 June 2026. Following this, the EU will determine which measures may be taken to mitigate risks to its economic security.

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