The Horizon of Investment Screening in Ukraine
Authors: Anton Arkhypov, John Kay, Mariia Bykova, Mykyta Nota and Simon Sharghi-Erdmosa.
Introduction
In a newly published report produced by CELIS in collaboration with the Center for International Private Enterprise (CIPE), we examine Ukraine’s emerging foreign direct investment (FDI) screening framework at a critical moment for the country’s post-war reconstruction. We analyse Ukraine’s two draft screening laws introduced in 2025, identifying key legal and institutional gaps when measured against European Union (EU) and OECD standards. The report also assesses potential risks in light of the reconstruction needs in the transportation, energy, and defence sectors, drawing on sectoral risks previously identified in the context of foreign investment across the EU and the United States. The report sets out recommendations for establishing a coherent and credible screening mechanism capable of safeguarding national security while supporting the large-scale foreign investment needed for Ukraine’s recovery.
The full report can be accessed here.
Main Findings
Ukraine’s post‑war recovery will require unprecedented volumes of foreign investment, yet the country currently lacks a coherent, legally grounded system to manage national‑security risks linked to these inflows. Two draft laws introduced in 2025 (No. 14062 and No. 14062‑1) seek to establish Ukraine’s first formal foreign direct investment (FDI) screening mechanism. In January 2026, the government established an Inter-Agency Commission on FDI Screening; however, the body has only advisory powers. The draft laws diverge sharply from each other in institutional design, definitions, and thresholds, and both contain substantial gaps when measured against EU and OECD standards, leaving Ukraine without a functional framework at a time of accelerating reconstruction needs.
The urgency of adopting an effective screening regime stems from Ukraine’s exceptional exposure to strategic risks. Reconstruction in sectors such as transport, energy, and defence will depend heavily on foreign capital, while these same sectors face heightened vulnerabilities due to wartime damage, concentration of assets, and the involvement of foreign state‑backed investors. Without a structured screening mechanism, Ukraine risks technology leakage, hostile influence over critical infrastructure, and long‑term strategic dependencies. At the same time, FDI remains indispensable for rebuilding the economy, scaling defence‑tech production, modernizing the energy grid, and aligning key industries with the EU’s economic and security architecture.
The current legislative proposals suffer from conceptual, legal, and procedural problems that undermine predictability and leave a wide space for circumvention. Definitions of FDI, foreign investor, control, and covered transactions are inconsistent with international practice and risk capturing low‑value, low‑risk deals while missing strategically important minority stakes. Notification thresholds (especially those based on fixed‑asset values or broad references to ‘agreements related to making FDI’) are imprecise. Sectoral coverage is either overly narrow or left to future government decrees, generating uncertainty. Institutional design remains unresolved: assigning screening to the Antimonopoly Committee of Ukraine would strain its mandate and resources, while a commission within the Ministry of Economy may lack safeguards for independence. Review processes, timelines, and sanctions are insufficiently clear to ensure both security and investor confidence.
To address these shortcomings, Ukraine should adopt clear and internationally aligned definitions, ensure that minority investments with strategic rights are captured, and tailor asset‑based thresholds to focus on transactions with genuine security relevance. A stable set of sensitive sectors should be defined in primary legislation, with a transparent process for periodic updates or ‘call in’. The screening authority must be institutionally independent, supported by structured interagency input, and equipped with clear timelines, parallel review procedures, and the ability to impose targeted mitigation measures. Effective monitoring, transparent reporting, and judicially reviewable criteria are essential to build credibility and avoid politicization.
A reliable, proportionate, and EU‑aligned FDI screening system is integral to Ukraine’s reconstruction and its path toward deeper integration with European economic and security structures. By adopting a coherent legal framework, enhancing institutional capacity, and embedding screening within a broader national economic‑security strategy, Ukraine can safeguard critical sectors while maintaining an open, predictable investment environment capable of attracting the scale of capital required for recovery.
