On the 24th of January 2024, the EU Commission adopted 5 initiatives to strengthen the EU’s economic security. One of which is to improve on the shortcomings and efficiency of Regulation (EU) 2019/452 on establishing a framework for the screening of foreign direct investments into the Union (hereinafter the “FDI Screening Regulation”). The revision will use the experience gained by virtue of reviewing over 1,200 Foreign Direct Investments (hereinafter “FDI”).

Under the current FDI Screening Regulation Member States are able to maintain their existing screening mechanisms, adopt new ones, or remain without such national mechanisms. As of 24th January 2024, there are 22 EU MS which have notified of having national investment screening mechanisms, with Malta being one by virtue of the National Foreign Direct Investment Screening Office Act (Chapter 620 of the Laws of Malta).

The revision of the EU FDI Screening Regulation is expected to (i) ensure that all Member States have a screening mechanism in place, with better harmonized national rules; (ii) identify minimum sectoral scope where all Member States must pre-screen investments; and (iii) extend EU screening to investments by EU investors that are ultimately controlled by individuals or business from a non-EU country. MS may, depending on their own national security interests, go beyond the minimum sectoral scope under the expected revision.

For more information or assistance on FDI please contact Dr Terence Cassar and Dr Cherise Abela Grech.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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