Between Openness and Security: CFIS 23 – Roundtable ‘Looking for a design of Europe’s Screening Mechanism(s)’

By Leonard von Rummel, BLOMSTEIN and Ass.-Prof. Dr. Lena Hornkohl, University of Vienna / CELIS Deputy Director

The annual conference of the CELIS Institute dealt with the pivotal question of Investment Screening and Economic Security and its current challenges. CFIS 2023 was held in Prague from 11 – 13 October 2023 and consisted of a private and a public part.


Following an insightful keynote speech by Damien Levie on the future of the FDI Screening Regulation, we had the honour and privilege to moderate one of the first public panels on Thursday. The panel brought together four experts from different screening authorities with Petr Lang, (Czech Republic), Pierre-Marie Voegeli (France), Dr Alexandra Leoni (Austria) and Dr Angelika Milger (Germany) as well as Dr Dimitri Slobodenjuk (Clifford Chance), an experienced private practitioner in the area of FDI screening. The discussion circled around the future of FDI control in Europe, with the panelists reporting from their practical expertise.


In the ever-evolving landscape of foreign investments and economic competitiveness, Europe faces a pivotal decision on how to strategically position its investment screening mechanisms for the next five years. Balancing security concerns with economic growth is paramount, as Alexandra Leoni pointed out in her intervention:

  • Balancing Security and Investment: Investment screening should find a delicate equilibrium between addressing security risks on one hand and not overly hindering foreign investments on the other.
  • Universal Screening Mechanism: Every Member State should possess a screening mechanism. A uniform approach enhances security and minimizes potential loopholes.
  • Broad and Flexible Scope: The screening mechanisms’ scope should be broad and flexible, capable of adapting to unforeseen risks or emerging technologies over time. This flexibility ensures the mechanisms remain relevant and effective.
  • EU Cooperation: Cooperation and information exchange at the EU level is vital. The scope of the FDI Screening Regulation and the EU cooperation mechanism should also be broad and flexible. This empowers Member States to leverage the tools provided in the Regulation.
  • Harmonization: To ease the impact of investment screening on investments across the EU, consider harmonizing screening mechanisms to some extent. This harmonization can simplify transaction planning for investors, making it easier to navigate the diverse European landscape.
  • Timely Screening: Ensure that screening of non-critical transactions is conducted within a reasonable timeframe. Delays can deter investments, so efficiency is key in maintaining economic competitiveness.


While Dimitri Slobodenjuk agreed with Alexandra Leoni that restricting investments too heavily can stifle economic growth and innovation, he disagreed with the call for a broad and flexible approach:

  • Balanced Approach: While recognizing the legitimate interest of EU FDI regulators to review certain transactions for security reasons, a more balanced approach to foreign investments is needed. The current situation involves too many unproblematic transactions being subject to FDI scrutiny, which can have a negative impact on the investment climate due to unnecessary delays and costs.
  • Harmonization of FDI Regimes: In five years, EU Member States should continue to be responsible for national FDI screening. However, there should be a push for the harmonization of FDI regimes to the extent possible. This could involve having a similar interpretation of relevant sectors based on clear thresholds to exclude small and irrelevant transactions, and ideally, establishing similar timelines for review.
  • Consistent Approach: Member States should adopt a consistent approach as to when to send cases into the cooperation mechanism, especially in Phase II cases. This would eliminate confusion and inefficiency caused by varying timelines and processes.
  • Efficiency in EU Screening Mechanism: The EU Screening mechanism should be more effective and coordinated. Currently, some deals are subject to FDI scrutiny in various EU Member States, and parties sometimes receive exactly the same questions from the Commission in all national proceedings. This redundancy can be reduced through better coordination.
  • Transparency: Finally, the FDI scrutiny process should be more transparent, both at the EU and national levels, including access to the EU Commission opinions. This would not only instil trust in the process but also allow investors to understand the reasons behind the scrutiny and, if necessary, make adjustments to address security concerns.


Petr Lang emphasized the critical impact the still very young EU FDI Screening Regulation had as a very much needed impetus for establishing national mechanisms in member states. He looked back and ahead:

  • Information Exchange: The rules on information exchange under the Regulation provide an important tool for maintaining joint situational awareness and risk-consciousness and a necessary input to initiate the ex officio screening.
  • Outreach Abroad: For the future, in order to support broader open and secure investment environment, we should engage more in capacity building activities towards partners outside of the EU who have not yet implemented a national FDI regime.


The panel then turned to the question regarding the assessment of the effectiveness of the EU Investment Screening Regulation in protecting critical assets. Pierre-Marie Voegeli stated that the overall assessment of the EU FDI Screening Regulation in protecting critical assets and ensuring economic security within the European Union is positive, with room for improvement:

  • Factors of Success:
    • Confidentiality: The regulation has maintained confidentiality in the exchange of information among the 27 Member States and the Commission.
    • Value to National Authorities: The Commission provides significant value to national authorities, in particular through:
      • Participation regarding EU Projects: Providing input regarding various EU projects and programs.
      • Identification of Unnotified Transactions: Identifying transactions that should have been notified.
      • Coordination on EU-Dimensional Cases: Coordinating on cases with a strong EU dimension.
    • Ideas for Improvement:
      • Core List of Critical Sectors: Consider obligating Member States to have screening mechanisms for a core list of critical sectors and technologies.
      • Horizontal Analyses by the Commission: Allow the Commission to provide horizontal analyses on critical sectors, technologies, and predatory investment strategies at the EU level.
      • Focused Cooperation Mechanism: Improve the focus of the cooperation mechanism on the most critical transactions.
      • Expanded Scope: Explore the possibility of expanding the regulation’s scope to cover EU investors ultimately owned by extra-EU investors. Furthermore, the FDI Screening Regulation and national systems must find a mechanism to assess the criticality of emerging critical sectors and technologies.
      • Outreach to Member States Without Screening Mechanisms: More outreach towards partners outside the EU without FDI screening mechanisms to establish them.


The panel turned to Angelika Milger for her view to what extent the cooperation among EU member states improved or evolved in implementing investment screening measures and what strategies can further enhance this collaborative effort. Cooperation among EU member states has significantly improved in implementing investment screening measures, but challenges remain:

  • Cooperation in Implementation:
    • Member states have provided resources and established procedures both nationally and in collaboration with the European Commission and other EU countries.
    • A process review and shared learning have enhanced the effectiveness of these mechanisms.
  • Added Value of Cooperation:
    • Consideration of public order and security of other member states within national frameworks is now common practice.
    • The collaborative mechanism provides an overview of foreign direct investment across the EU, improving awareness of potential risks.
    • Cooperation with both member states and the European Commission on specific cases has strengthened security measures.
    • Exchange of national regulatory frameworks and best practices facilitates a harmonized approach.
  • Remaining Challenges:
    • Integrating diverse national approaches into a cohesive mechanism remains a challenge.
    • The increasing case load requires efficient processing – not everything can be screened and processed: swift differentiation between critical and non-critical notifications is essential.
    • Streamlining the overall process can enhance collaborative efforts further.
    • Accountability for national decisions vis-à-vis the Commission or other EU Member States


The review of the FDI Screening Regulation is going in full speed. The panel showed us and the audience that the role of EU law on the one hand in guiding member states systems through cooperation and information exchange already works well. Future challenges include mandatory screening systems and taking due account of multi-member state transactions. The next months will show us the way forward: will the Commission Report cite with our experts?

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