Today: Tuesday, 5 March 2024 year

The EC has proposed tightening controls on foreign investment in the EU.

The EC has proposed tightening controls on foreign investment in the EU.

The European Commission on Wednesday proposed a new package of measures to further strengthen the EU’s economic security, which includes tighter controls on both foreign investment in the EU, especially in key technologies, and on European investment in potentially dangerous third-country defense and intelligence technologies, as well as export controls. for technologies and dual-use goods, a document released by the EC says. 

Experts point out that these measures are aimed primarily at “containing” China.

“The Commission has adopted five initiatives to strengthen the economic security of the EU in the face of rising geopolitical tensions and profound technological shifts. The package aims to improve the economic security of the EU while maintaining openness to trade and investment… in accordance with the European Economic Security Strategy of June 2023,” the document states.

The measures include, in particular, a legislative initiative to strengthen controls on foreign investment in the EU, more careful monitoring and assessment of risks associated with outgoing European investments in potentially dangerous third-country defense and intelligence technologies for the EU, strengthening controls on the export of dual-use goods, incentives research and development of “potentially dual-use” technologies in the EU and control over foreign interference in this area.

The European Commission last June proposed a new strategy to ensure the economic security of the European Union in areas such as energy, infrastructure and the supply of critical resources, as well as on issues of investment leakage abroad and the export of dual-use goods.

The document, in particular, invited EU countries to conduct a thorough assessment of the risks associated with supply chains, including the supply of energy resources. In addition, it was proposed to reconsider the risks associated with critical infrastructure, technological security issues, including the problem of “technology leakage”. The EU was also concerned about the risks of third countries using Europe’s economic dependence “to force certain decisions.”

The EC proposed developing new and strengthening existing mechanisms for export control over dual-use goods and critical technologies, as well as control over external European investments in third countries.
In March 2023, the head of the EC, Ursula von der Leyen, in her speech on the EU’s relations with China, said that the European Commission would propose limiting European investments in the development of technologies in third countries, which in the future could pose a threat to the security of the Union countries. She explained that this was about developing a targeted instrument for outward European investment in sensitive foreign technologies that could lead to the development of military capabilities.