The European Commission (“EC”) recently published its first annual report on the new European cooperation mechanism regarding the screening of foreign direct investment (“FDI”) into the EU (the “Report”).
The Report shows that four out of every five FDI filings screened at the EU level were quickly resolved within Phase I, while the remaining filings were pushed to Phase II (or were pending at the time of the Report) subject to additional information being requested from the notifying Member State. The EC issued a formal opinion in 3% of the screened notifications (although the ultimate outcome of these cases was not reported). It is, though, too early to draw any meaningful conclusions out of these initial statistics.
While the EC and Member States have overall deemed the EU FDI cooperation mechanism efficient and reliable, it has also attracted criticism by Member States due to associated burden and procedural issues driven by variations among the Member States’ FDI rules.
Transaction parties are well-advised to carefully consider how best to navigate this continually developing FDI framework in the EU.
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