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On 24 January 2024, the European Commission published a White Paper on Outbound Investment and a consultation on its proposed next steps. Rather than provide details of the potential measure - as had been originally anticipated when the Commission published its European Economic Strategy in June 2023 (which we covered in an earlier post) - the White Paper instead proposes further steps for gathering information before any more concrete proposals are made.
This suggests that there is a long road ahead before we might see an outbound investment screening regime in the EU, with any proposed policy responses not expected until at least Autumn 2025. This post sets out the approach outlined by the Commission and what this might mean for outbound investment screening going forward.
In the White Paper, the Commission emphasises the complex and sensitive nature of the field of outbound investments, and the tentative steps it must take to ensure that the EU’s response is proportionate and targeted.
Despite the Commission having already gathered information from Member States, and the Expert Group on Outbound Investment (that was set up last July) having met three times in 2023, the conclusion reached so far is that more data is needed - as data on outbound investments is not routinely collected and what is available has “significant limitations”.
To gather more information, the Commission has proposed the following stages:
The Commission’s White Paper also states that making full use of any existing instruments to address any identified concerns (such as dual-use export controls or FDI screening mechanisms) will take priority over establishing a new outbound investment screening regime.
The Commission has invited comments on the scope of the monitoring it has proposed, including:
The brakes have been applied when it comes to an EU outbound investment screening regime, with the White Paper not going much further than to make proposals for how to gather information relevant to further assessing the need for such a tool. The overarching tone also appears to be one of caution. If existing measures can be used, they will, and extensive information must be gathered by Member States before any more definitive decisions can be made.
The extent of the information to be gathered by Member States is likely to pose a challenge, and it remains to be seen whether the Commission will receive the detail it seeks. In addition, with the EU Parliamentary elections in June this year, we expect that these proposals could change – or potentially be kicked into the long grass.
2 February 2024
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