Bloc seeks to protect key industries, including the critical raw materials sector.
The European Union on Thursday reached a provisional agreement to significantly strengthen its screening of foreign direct investment, introducing mandatory oversight across all Member States for transactions involving sensitive technologies, infrastructure, and critical raw materials. The deal, struck between the European Parliament and the Council, updates the EU’s 2020 framework and aims to reduce strategic vulnerabilities amid rising geopolitical tensions.
Under the revised regulation, Member States will be required to scrutinize foreign investments involving military and dual-use items, hyper-critical technologies such as AI, quantum and semiconductors, critical raw materials, essential energy, transport and digital infrastructure, electoral systems, and a defined set of financial market entities. The rules will also extend to EU-based subsidiaries controlled by foreign companies. A shared database and potential single filing portal are intended to streamline cooperation and prevent circumvention.
Danish Industry and Business Minister Morten Bødskov said the agreement strengthens the EU’s ability to safeguard security and public order while maintaining its appeal to global investors.
The EU’s move comes as other Western economies tighten scrutiny of foreign investments. Australia and Canada, for example, have both announced more stringent reviews of critical minerals and sensitive technologies, while Ottawa already blocked a planned sale of rare earth material from a Canadian firm to a Chinese buyer and has expanded national-security reviews in the mining sector.
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