EU calls for higher scrutiny on outbound tech investments

Posted by Admin January 15, 2025 Tech

EU Commissioner for Interinstitutional Relations and Transparency Maroš Šefčovič said he “strongly encourage all EU Member States to pursue these recommendations, which will help us all in the long run.” Credits: Thierry Monasse/GettyImages

The European Commission, the executive arm of the European Union (EU), is calling on bloc members to review outbound investments to non-EU countries in sectors of “strategic importance” and “highest risk.” These include semiconductors, artificial intelligence (AI) and quantum technologies. The news follows a flurry of restrictions on the semiconductor sector that US President Joe Biden has passed in his last few weeks in office mainly aimed at limiting exports to China.

The EU says its goal is to secure the bloc’s economic security by “ensuring that key technologies and know-how do not fall into the wrong hands.” While it did not specify which bad actors it was referring to, the EU is presumably following the US’s lead in trying to limit China’s semiconductor development and encourage domestic industries.

The suggestion comes after an EU White Paper found that “member states do not systematically review and assess outbound investments for security purposes” and recommended a three-stage review approach. The research happened alongside ongoing EU work regarding inward FDI screening.

“The EU is and will remain among the leaders of both providing and attracting world-class investment. However, the geopolitics of today means that we must have a deeper understanding of the potential risks it may entail. The assessment of EU outbound investment in key technology areas will allow us to have a clearer picture of potential threats we face,” EU Commissioner for Interinstitutional Relations and Transparency Maroš Šefčovič commented.

The review will be in place for the next 15 months and covers ongoing and past transactions, dating back to 1 January 2021.

While EU recommendations are non-binding, the case reflects a growing trend of strategic technology sectors developing alongside geopolitical lines.

Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free
sample

Your download email will arrive shortly

We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form

By GlobalData

Tick here to opt out of curated industry news, reports, and event updates from Investment Monitor.

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The EU assured that the effort will depend on “cooperation and coordination with third countries” and that they will continue to discuss the subject of outbound FDI screening with their allies.