Towards a Balanced Investment Screening Framework

Cross-border investments as instruments of geopolitical competition

The project of global economic liberalisation is in distress. This is increasingly well understood by European policymakers: the strategic use of trade and investment by both adversarial and allied states for political purposes has brought security concerns to the forefront of foreign economic policy. In this context, the EU has become more assertive in controlling inbound Foreign Direct Investment (FDI) in light of security risks. FDI screening mechanisms have become a popular instrument of investment policy and rest assured are here to stay.

Towards a balanced legal framework for screening FDI

This book seeks to gain a better understanding of the legal design of the investment screening framework in the EU and its Member States. It determines what such mechanisms can or cannot accomplish, and in turn, what they should be able to accomplish to reconcile their objective: a balanced legal framework that reconciles the need to address security concerns with the need for an investment climate open for cross-border business. This book approaches foreign investment control from national, European and international legal perspectives, and combines these analyses to identify and respond to key issues. This study covers an analysis of the context and rationale of investment screening mechanisms, the content and functioning of these mechanisms, as well as the applicable legal limitations.

Furthermore, the book looks at means to improve positive investment screening rules through a comparative evaluation between the investment screening laws of Germany, France, the Netherlands, Belgium, and the United States. Last, the book discusses the fundamental issues with the legal order underpinning the investment screening framework, both internal (competence allocation in the EU) and external (international law). Ultimately, this book highlights priorities that national and European law- and policymakers should consider in order to act as a reliable and principled partner, albeit not a naive one.