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4 April 2020

New Guidelines on screening of foreign Investments in the EU

According to Regulation (EU) 2019/452, the EU member states and the Commission may cooperate and exchange information on investments by third countries that may affect the security or the public order within the European Union. The regulation introduced in 2019 was a framework regulation, without any obligation on the member states to establish procedures for screening of foreign investments. The framework for the cooperation is described in more details here. As a direct consequence of the current public health crisis and related economic vulnerability, the Commission issued additional guidelines to this regulation on 25 March 2020, with the purpose of protecting critical European infrastructure assets, systemic important companies and technology in the current COVID-19 crisis. Business and industries mentioned in particular are health, medical research, biotechnology and infrastructures that are essential for our security and public order. In the guidelines issued on 25 March 2020, the Commission urges member states that already have an existing screening mechanism in place to use all tools available to them in order to prevent capital flows from non-EU countries that could undermine Europe's security or public order. Further, it is urged that the member states that still do not have a screening mechanism in place to set up a fully-fledged screening mechanism and to consider all options to address cases where the acquisition or control by a foreign investor of a particular business, infrastructure or technology would potentially create a risk to security or public order in the EU. The new guidelines do however still not impose any formal obligation on member states to implement investment screening on foreign investments, and the decision to approve foreign investments remains with the member state.

Pernille Nørkær


+45 30 37 96 40

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Poul Guo (Quach)/郭保罗

Senior Associate

+45 30 37 96 23

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Rasmus Juel Schiøtt

Senior Associate

+45 30 37 96 22

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