ARTICLE · 26 OCTOBER 2020

EU Foreign Direct Investment Regulation Comes Into Force

Cleary Gottlieb Steen & Hamilton LLP

Explore more from Cleary Gottlieb Steen & Hamilton LLP

On October 11, 2020, the EU Foreign Direct Investment Regulation—which establishes a European framework for the screening of foreign investments into the European Union— entered into force.

European UnionGovernment, Public Sector

François-Charles Laprévote

Séverine Schrameck

Giuseppe Scassellati‑sforzolini

Francesco Iodice

Mirko Von Bieberstein

On October 11, 2020, the EU Foreign Direct Investment Regulation—which establishes a European framework for the screening of foreign investments into the European Union— entered into force.

The legislation attempts to address growing concerns (compounded by the COVID-19 pandemic) regarding inbound investments at a European level.

The Regulation does not grant the European Commission (or any other European institution) the ability to veto foreign investments; this power is retained by Member States under national legislation.

Rather, it lays down a common framework for review by Member States and seeks to coordinate national enforcement action, including by enabling the Commission and other Member States to comment on national reviews.

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