EEA EFTA States call for close cooperation in the area of investment screening
In a joint EEA EFTA Comment, Iceland, Liechtenstein and Norway highlight the importance of improved investment screening mechanisms across the European Economic Area. They caution that adopting the revised regulation on the screening of foreign investments as it stands could result in trade barriers, as well as creating loopholes for malign foreign investors operating in the Internal Market. The EEA EFTA States therefore propose a joint expert meeting with the European Commission to assess how best to ensure close cooperation in the area of investment screening.
The Foreign Direct Investment (FDI) Screening Regulation is a cooperation mechanism between EU Member States and the Commission to address cross-border risks to security or public order, while preserving the openness to foreign investment. In 2024, the Commission put forward a revision of the regulation making it mandatory for all EU Member States to have a FDI screening mechanism. The proposal includes new rules for the assessment of multi-country transactions, as well as provisions requiring authorisation ahead of certain types of FDIs.
Iceland, Liechtenstein and Norway welcome the European Economic Security Strategy and the EU’s ambition for a more competitive and resilient Europe. The EU and the EEA EFTA States share a common interest in cooperating closely in the field of investment screening to safeguard the integrity of the Internal Market. They underline that investors from the whole of the EEA should be subject to the same rules and be assessed in the same way. In line with the objectives of the proposal, the three EEA EFTA States are exploring national screening mechanisms.
Although the EEA EFTA States’ final assessment of whether the regulation is EEA relevant can only be carried out once it has been adopted by the EU, they are concerned that if its scope remains unchanged, it risks creating trade barriers within the Internal Market. Moreover, it could create loopholes that allow malign investors to gain access to the Internal Market. The EEA EFTA States underline that enhanced cooperation and information sharing among the 30 EEA States would help to prevent unintended consequences such as these.
Iceland, Liechtenstein and Norway are committed to safeguarding the integrity of the Internal Market and to supporting fair and predictable trade relations. To ensure that the screening instrument is effective once adopted, they propose holding a joint expert meeting with the Commission services and look forward to continuing their close dialogue.
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