Foreignness in EU Investment Screening Law

Concerns regarding foreign direct investments (FDI) from China have played a central role in the adoption and development of the EU framework for FDI screening. The official discourse regarding these concerns initially focussed on economic interests but shifted to security following the introduction of the FDI Screening Regulation. Because the precise security threats posed by FDI were largely unspecified, there is a lack of meaningful indications in the law and the legislative history regarding the definition of security and public policy, as well as the broader objectives of the EU FDI Screening Regulation. Since its adoption, the official discourse on FDI screening has emphasised the importance of European strategic autonomy and economic security, which are used as a wide umbrella term for various industrial political interests. While the Russian invasion of Ukraine has shifted the attention to Russia, the impact of this shift is likely to be limited given the small number of Russian investments in the EU. At the same time, the EU has pursued cooperation with the United States on FDI screening, starting already during the parliamentary debate and formalised by the conclusion of the EU-US Trade and Technology Council. Close cooperation with the United States is, however, hard to reconcile with the purported general objective of European strategic autonomy and the principle of non-discrimination, and risks dragging the EU into the increasingly hostile US-China rivalry.