Foreign Direct Investment Flashcards
(15 cards)
What is the EU’s foundational piece of legislation establishing a framework for screening of FDI?
Regulation (EU) 2019/452.
What is the main objective of Regulation 2019/452?
To better equip the EU and its Member States to identify, assess, and mitigate potential risks that certain FDI from third countries might pose.
What framework does Regulation 2019/452 establish?
One for coordination and cooperation between Member States and between Member States and the European Commission.
What is the cooperation mechanism?
This is a core element, establishing a system where Member States that screen FDI must notify the Commission and other Member States.
What are the factors for screening?
These include potential effects on critical infrastructure, critical technologies, security of supply, access to sensitive information and the foreign investor controlled by a third country government.
What are recent developments for FDI?
January 2024, the European Commission proposed a revision of Regulation (EU) 2019/452. This made national screening mechanisms mandatory for all Member States.
What is Article 4(2) TEU?
The legal basis under EU law that gives exclusive responsibility to EU Member States regarding FDI screening.
What does Article 4(2) TEU say about national security?
That it is the sole responsibility of each Member State.
What is one of the most debated and significant parts of the Article 4(2)?
The EU mandated respect for national identities, as reflected in regional and local self-government.
What are “essential state functions”?
Territorial integrity of the State, maintaining law and order, and safeguarding national security.
What does the final sentence of Article 4(2) TEU explicitly mention?
The EU cannot dictate or assume a Member State’s core responsibility for its own national security.
What is the significance of Article 4(2) TEU?
It acts as a reminder that the EU operates within the limits of the competence conferred upon it by the Member States.
What is Article 207(2) TFEU?
A pivotal legal basis for the EU’s external economic relations.
How does Article 207(2) relate to FDI?
It is the legal basis for the EU’s competence for the Economic Aspects of FDI.
What is the relationship between Article 4(2) TEU and Article 207(2) TFEU?
The EU asserts competence over FDI through Article 207(2) whilst also respecting that Member States hold absolute responsibility for national security, as stipulated by Article 4(2) TEU.
