The Regulation applies to all EU Member States, regardless of whether they have a screening mechanism or not. The procedure will however slightly differ, depending on whether the foreign investment is undergoing a screening procedure at national level or not. For instance, Member States which have a screening mechanism will notify the Commission and the other Member States when a transaction is screened, by providing information on that transaction.

The EU framework is not fully equivalent to a national screening mechanism. It sets up a cooperation mechanism among Member States, and with the European Commission. It provides for a formal channel of information exchange to raise awareness on cases where a foreign direct investment may affect security or public order, and to suggest steps to address the concerns. In addition, whereas existing screening mechanisms by EU member states address FDI solely within their own territories, the EU framework will help identifying and addressing security risks that affect several Member States or the Union as a whole.

No. The new Regulation complements the existing screening mechanisms of Member States and enhances their effectiveness. It is designed to help Member States and the Commission to assess collectively potential cross-border threats to security and public order arising from a foreign direct investment. This is regardless of whether a Member State has a screening mechanism or not. It does not substitute existing national screening mechanisms. In particular, the Member States keep the final decision as to whether an investment is authorised in their territory and under which conditions.

The Regulation covers any foreign direct investment. This means, as defined by the European Court of Justice, an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the target company in order to carry out an economic activity in a Member State.

Foreign direct investment can take two different forms: greenfield, and mergers and acquisitions (M&As). International greenfield investment typically involves the creation of a new company or establishment or facilities abroad, whereas an international merger or acquisition amounts to transferring the ownership of existing assets to an owner abroad. Foreign investor means a natural person of a third country or an undertaking of a third country, intending to make or having made a foreign direct investment.

No. Businesses (investors or target undertakings) are not required to notify transactions to the Commission or to other Member States. Only the Member State that undertakes the screening of a transaction is under an obligation to notify. The Commission will assess risks to security or public order on the basis of information received from the host Member State or from other available sources. At the same time, Member States that are under obligation to provide information to the Commission or other Member States, may request such information directly from businesses.