The Birth of the EU Screening Regulation
This chapter deals with the process that led to the adoption of the EU Screening Regulation. The chapter starts with a description of the political debate that sparked the idea to harmonise the screening of FDI in the EU. Having laid down the political an
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Contents 1 Introduction 2 The EU Needs to Ensure a Level Playing Field for Foreign Direct Investments 3 How Does the Screening of FDI Fit in the Framework of EU Law? 3.1 Free Movement of Capital 3.2 Definition of Foreign Direct Investment 3.3 Security Reviews 4 From Idea to Regulation: The Evolution of the EU Screening Regulation 4.1 EPP Group Proposal for a Union Act on the Screening of Foreign Investment in Strategic Sectors 4.2 Light Bulb Moment: State of Union in September 2017 4.3 The EC Proposal from September 2017 4.4 Position of the European Parliament as Adopted in May 2018 4.5 The Provisional First Reading Agreement (Trilogue) 4.6 The Achievement of the First Reading Agreement: A Win-Win Situation 5 Conclusions References
Abstract This chapter deals with the process that led to the adoption of the EU Screening Regulation. The chapter starts with a description of the political debate that sparked the idea to harmonise the screening of FDI in the EU. Having laid down the political and economic context, the author describes the legal context where the EU Screening Regulation was to fit in before presenting a detailed account of the legislative process, predominantly from the perspective of the European Parliament.
J. Warchol (*) European Parliament, International Trade Committee (INTA), Brussels, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2020 YSEC Yearbook of Socio-Economic Constitutions 2020, YSEC Yearbook of Socio-Economic Constitutions 2020, https://doi.org/10.1007/16495_2020_1
J. Warchol
1 Introduction Foreign direct investment is an important source of economic growth in the EU while sometimes it can be a valid concern for our citizens. This can be the case if the investor is a state-owned enterprise from a third country, which is lacking a market economy status or if the investment is in strategic infrastructure projects, communications or key future technologies. There is a need for the EU to safeguard a level playing field when trading with state-owned enterprises of third countries with planned (controlled) economy status. In case of countries lacking market economy status, political interlocutors such as governments of one-party states or the military are controlling major aspects of the economy. Moreover, administrative acts can determine economic decisions as well as prices, and the state can provide generous subsidies to its industries in order to boost its global competitiveness. The year 2016 has been marked by the press1 as the year in which Chinese foreign direct investment (hereafter FDI) into the EU hit all-time high records, jumping to almost $200 billion US dollars within a year, nearly 50% more than over the last ten years combined. On the other hand, the EU FDI flow to China continued to decline drastically to $8 billion US dollars from 11.8 billion in 2014, proving the growing imbalances,2 while simultaneously slow growth and persisting hurdles to market access in China were an issue. The record high Chinese FDI flow to the EU was a result of differe
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