Articles Posted in Global Investment Screening

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Today, Regulation (EU) 2026/1386 (“FDI Regulation”), the EU’s new regulation revising the Foreign Direct Investment (FDI) screening framework, was published in the Official Journal following its adoption by the Council of the EU earlier this month. The FDI Regulation will enter into force 20 days after its publication, and will begin to apply 18 months thereafter, by which time Member States must ensure compliance with its requirements. The FDI Regulation will replace Regulation (EU) 2019/452, which has governed EU-level coordination of FDI reviews since 2020.

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On 23 June 2025, the UK government published its new Modern Industrial Strategy document (the “IS Document”), outlining the government’s current strategies for UK economic growth. The policy paper focuses on eight priority sectors: professional and business services; advanced manufacturing; clean energy; creative industries; defence; digital technologies; financial services; and life sciences (the “IS Priority Sectors”), which together represent 32% of the UK’s economy. The IS Document makes specific (albeit brief) reference to the UK government’s plans in relation to the UK’s investment screening regime, which is governed by the UK National Security and Investment Act 2021 (NSIA), and confirms that long-awaited updates to the NSIA are still on the government’s to-do list.

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On January 16, 2025, the European Commission issued a recommendation encouraging EU Member States to begin reviewing outbound investments in critical technologies including AI, semiconductors and quantum technologies to assess whether such transactions pose risks to EU economic security (the “Recommendation”). The Recommendation constitutes a call for Member States to establish or adapt existing investment screening mechanisms in consultation with relevant stakeholders. The  underlying objectives of the Recommendation are to: (i) ensure the protection of home-grown EU technologies that could bolster military or intelligence capabilities of adversarial states; and (ii) foster a fact-based understanding of the risks posed by outbound investments.

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