EU to Tighten Foreign Investment Regulations Amid Security Concerns

Summary

  • EU plans to introduce laws requiring all member states to scrutinize and potentially halt foreign investments considered a security risk.
  • The European Commission will provide proposals on improving the coordination of export controls, especially those related to goods with military applications, and regulating access to research in essential technologies.
  • New initiatives will aim to prevent the transfer of sensitive technologies to countries deemed as “of concern”.
  • Efforts will be made to minimise the bloc’s economic dependency on China, a dominant player in green tech and key mineral production.
  • […]

Decisions Awaiting by the European Union

The European Union’s executive body will soon unveil a comprehensive proposal for discussion, which will be accompanied by a newly proposed legislation. This law, if passed, will obligate every EU member nation to examine and possibly impede foreign investments within the bloc, should they pose a threat to security.

Strengthening Export Controls and Research

The Commission’s proposals will contain ideas for improving the harmonization of export controls, specifically for goods that can be used militarily. The proposal will also aim to regulate more strictly those who can participate in and have access to research in pivotal technologies.

Preventing Leakage of Sensitive Technologies

Furthermore, the Commission will propose new mechanisms to prevent sensitive technological information from reaching countries or areas labeled as “of concern”.

Tackling Dependence on China

The plans won’t name any specific nations. However, the EU has stressed the importance of collaborating with “reliable allies” and adopting the policy of “de-risking”, which refers to the bloc’s strategy to lessen its economic reliance on China – a country known for its domination in green tech and crucial mineral production.

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Consequently, this new geopolitical reality can have significant implications on forex or trading and potentially impact assets related to EU and China’s green tech and mineral production sectors.

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