EU Calls for Greater Scrutiny of Foreign Investments in Strategic Sectors
In his State of the European Union speech on September 13, 2017, the President of the European Commission (the “EC”), Jean-Claude Juncker, announced a proposed regulation which would create a new framework for closer cooperation and better coordination between European governments when reviewing foreign investments.
The proposal stops short of creating a European equivalent to the national security review process overseen in the United States by the Committee on Foreign Investment in the United States (“CFIUS”), as it would not establish a formal European mechanism to review foreign takeovers. Rather, it focuses on the existing vetting regimes in Member States, their better coordination and the minimum requirements for such regimes.
The only indication of a more interventionist approach at EU level is the proposed new powers for the EC to review a transaction itself if EU funds are at stake. This is likely to create controversy in particular in the energy sector.