The European Commission approved its guidelines for the screening of outbound investment on economic security grounds and urged member states to review all deals in targeted technologies in any country since January 2021. 

“The geopolitics of today means that we must have a deeper understanding of the potential risks [cross-border investment] may entail,” Maroš Šefčovič, commissioner for trade and economic security, said in a note on January 15. “The assessment of EU outbound investment in key technology areas will allow us to have a clearer picture of potential threats we face.”

The commission is urging member states to screen outbound investment in three main areas: semiconductors, artificial intelligence and quantum computing. 

“The risks caused by technology leakage are likely to be particularly acute for a narrow set of technological advances that can enhance military and intelligence capabilities of actors that may use them to undermine international peace and security,” reads the set of recommendations published on January 15. “Such leakage should not be fuelled by union capital, expertise and knowledge: including in the context of outbound investment from the union.”

Further reading on European policy:

• Opinion | UK must cut ECT legacy to become green superpower
• Brussels push to ban ECT disputes gains traction
• Opinion | Europe needs an industrial deal, not just a green deal

Unlike the outbound FDI regulations issued by the US, which focused on the same technologies but targeted exclusively FDI heading to China, reviews by EU members “should be country-neutral and not exclude, a priori, specific destinations”, the commission’s guidelines read. “Nevertheless, member states may prioritise their review activities based on the risk profiles of individual countries.”

Any deal in the targeted technologies, both ongoing or going back to no earlier than January 2021, is to be reviewed by member states, which have 15 months to identify and assess the potential risks posed by these transactions and provide the Commission with a progress report. 

So far, European companies are not leaders in any of the targeted sectors, with their US and Asian counterparts having a clear lead along most of the value chain in both semiconductors and artificial intelligence, while it is still early days for quantum computing technologies. 

According to fDi Markets, European companies announced five cross-border greenfield FDI projects in the aforementioned sectors between January 2021 and November 2024, only three of them outside the bloc itself. 

Do you want more FDI stories delivered directly to your inbox? Subscribe to our newsletters.