Screening Foreign Direct Investment in Europe: Having a Tiger by the Tail?

Ivana Damjanovic, Nicolas de Sadeleer

Research output: A Conference proceeding or a Chapter in BookChapterpeer-review


In response to emerging national security risks in global trade, screening of foreign investment has become an important autonomous tool for States in international economic regulation. The European Union (‘EU’) is a latecomer in the field in comparison with its trading partners such as the United States (‘US’) and Australia, due to its more liberal stance towards free movement of capital among the four fundamental market freedoms. This chapter analyses the EU foreign direct investment (‘FDI’) screening mechanism and vertical and horizontal relations within this legal framework. It reviews its key aspects in relation to the EU internal constitutional framework and external obligations under trade and investment agreements with third countries. Due to the specific nature of involved competences under EU law, the EU’s FDI regulatory framework does not lead to harmonisation but to primarily procedural coordination of national screening mechanisms, leaving to the Member States the final decision on the admission of FDI into their territories. Nevertheless, placing the EU mechanism within the Common Commercial Policy should give to the European Commission more leverage in carrying out the EU’s external trade and investment agenda.
Original languageEnglish
Title of host publicationThe European Union and the Evolving Architectures of International Economic Agreements
EditorsOttavio Quirico, Katarzyna Kwapisz Williams
PublisherSpringer Nature Singapore
Number of pages23
ISBN (Electronic)9789819923298
ISBN (Print)9789819923281
Publication statusPublished - 25 Jul 2023


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