Legal provisions of COM(2024)23 - Screening of foreign investments in the Union - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)23 - Screening of foreign investments in the Union. |
|---|---|
| document | COM(2024)23 |
| date | January 24, 2024 |
CHAPTER 1
GENERAL PROVISIONS
Article 1
Subject matter and scope
1. This Regulation establishes a Union framework for the screening, by Member States, of foreign investments in their territory, on the grounds of security or public order.
2. This Regulation establishes a cooperation mechanism to enable Member States and the Commission to exchange information on foreign investments, assess their potential impact on security or public order, and identify potential concerns that shall be addressed by the Member State that is screening the foreign investment.
3. Member States may adopt or maintain in force national provisions in fields not coordinated by this Regulation.
4. This Regulation is without prejudice to each Member State having sole responsibility for its national security, as provided for in Article 4(2) TEU, and to the right of each Member State to protect its essential security interests in accordance with Article 346 TFEU.
5. This Regulation is without prejudice to Member States’ obligations under the Treaties, in particular Articles 49 and 63 TFEU. Member States shall ensure that any measure taken in the framework of this Regulation complies with those obligations. This Regulation is without prejudice to the powers of the Commission under Article 258 TFEU to ensure compliance with Union law.
Article 2
Definitions
For the purposes of this Regulation, the following definitions apply:
1. ‘foreign investment’ means a foreign direct investment or an investment within the Union with foreign control, which enables effective participation in the management or control of a Union target;
2. ‘foreign direct investment’ means an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and an existing or to be established Union target, and to which target the foreign investor makes capital available in order to carry out an economic activity in a Member State;
3. ‘investment within the Union with foreign control’ means an investment of any kind carried out by a foreign investor through the foreign investor’s subsidiary in the Union, that aims to establish or to maintain lasting and direct links between the foreign investor and a Union target that exists or is to be established, and to which target the foreign investor makes capital available in order to carry out an economic activity in a Member State;
4. ‘request for authorisation’ means the filing, under a screening mechanism established pursuant to Article 3, of a request to authorise foreign investment subject to an authorisation requirement;
5. ‘notifiable investment’ means a foreign investment meeting at least one of the conditions set out in Article 5;
6. ‘foreign investor’ means:
a. a natural person of a third country; or
b. an undertaking or entity established or otherwise organised under the laws of a third country;
7. ‘foreign investor’s subsidiary in the Union’ means an economically active undertaking established under the laws of a Member State meeting the conditions set out in Article 22(1) of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 20130, and directly or indirectly controlled by a foreign investor;
8. ‘Union target’ means an undertaking established under the laws of a Member State;
9. ‘Union target economically active in one of the areas listed in Annex II’ means an Union target active or intending to be active in technologies, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union, listed in Annex II, including through ownership, use, production or supply thereof;
10. ‘applicant requesting an authorisation’ means the party or parties to a foreign investment transaction who applies for authorisation with the relevant screening authority;
11. ‘third country’ means a jurisdiction, which is not a member of the Union;
12. ‘screening’ means a procedure that allows a Member State to assess, investigate, authorise, authorise subject to mitigating measures, prohibit or unwind foreign investments on the grounds of security or public order;
13. ‘screening mechanism’ means an instrument of general application, such as a law or regulation, and accompanying administrative requirements, implementing rules or guidelines, that set out the terms, conditions and procedures for the screening of foreign investments on the grounds of security or public order;
14. ‘screening decision’ means a measure adopted by a screening authority in application of a screening mechanism resulting in the authorisation, authorisation subject to mitigating measures, prohibition or unwind of a foreign investment;
15. ‘screening authority’ or ‘screening authorities’ means the authority or authorities designated by a Member State to screen foreign investments;
16. ‘completion’ means the point in time when the last condition precedent has been met in relation to an investment decision by the parties to a foreign investment transaction;
17. ‘cooperation mechanism’ means the cooperation between Member States and the Commission on foreign investments pursuant to this Regulation;
18. ‘projects or programmes of Union interest’ means projects or programmes covered by Union law that provide for the development, maintenance or acquisition of critical infrastructure, critical technologies or critical inputs which are essential for security or public order and are listed in Annex I;
19. ‘notifying Member State’ means a Member State that has notified a notifiable investment to the cooperation mechanism pursuant to Article 5;
20. ‘multi-country transaction’ means a foreign investment subject to screening mechanisms in several Member States;
21. ‘multi-country notification’ means a notifiable investment that several Member States are required to notify to the cooperation mechanism;
22. ‘mitigating measure’ means any condition to resolve the likely negative effect to security or public order arising from the foreign investment.
23. ‘contact point’ means the person or entity designated by a Member State to notify notifiable investments to the cooperation mechanism, and to receive and send all communication related to foreign investments covered by this Regulation to the cooperation mechanism, on behalf of the screening authority.
CHAPTER 2
NATIONAL SCREENING MECHANISMS
Article 3
Establishment of screening mechanisms
1. Member States shall establish a screening mechanism in accordance with this Regulation.
1. Member States shall ensure that the screening mechanism referred to in paragraph 1 applies at least to investments subject to an authorisation requirement pursuant to Article 4(4).
2. Each Member State shall notify to the Commission the measures adopted pursuant to paragraph 1 no later than [date: 15 months after entry into force]. Member States shall thereafter notify the Commission of any amendment to their screening mechanism within 30 days of the adoption of the amendment.
3. The Commission shall make publicly available a list of Member States’ screening mechanisms no later than 3 months after having received all the notifications referred to in paragraph 3 or by [date: 21 months after entry into force], whichever occurs first. The Commission shall keep that list up to date.
Article 4
Minimum requirements
1. Rules and procedures related to screening mechanisms, and measures taken pursuant to such rules and procedures, shall comply with Union law, be transparent and shall not discriminate between third countries or between the Member States in which the foreign investor’s subsidiary in the Union is established.
4. Member States shall ensure that their screening mechanisms comply with the following requirements:
a. adequate procedures shall be provided for the screening authority to determine whether it has jurisdiction over a foreign investment filed for authorisation and to carry out an initial review followed by, where necessary, an in-depth investigation to determine whether that foreign investment is likely to negatively affect security or public order. The purpose of the in-depth investigation shall be, in particular, to determine whether a screening decision as referred to in Article 14(1) is appropriate and to determine its content.
b. the screening authority shall monitor and ensure compliance with the screening mechanism and screening decisions. In particular, it shall put in place adequate procedures to identify and prevent circumvention of the screening mechanism and screening decisions;
c. the screening authority shall be empowered to start screening foreign investments by its own initiative for at least 15 months after the completion of a foreign investment that is not subject to an authorisation requirement where the screening authority has grounds to consider that the foreign investment may affect security or public order;
d. confidential information, including commercially sensitive information, made available to the Member State carrying out the screening shall be protected;
e. foreign investors, foreign investors’ subsidiaries in the Union through which the foreign investment is carried out and undertakings concerned by a screening decision shall have the possibility to seek judicial recourse against that screening decision;
f. an annual report shall be made public, and shall include information on relevant legislative developments in the Member State and aggregate and anonymised data on the investments screened, including the outcome of screening decisions, nationalities, or country of establishment as the case may be, of parties to the investments notified to the screening authority, and the economic sectors in which those transactions took place;
g. foreign investments subject to an authorisation requirement as referred to in paragraph 4 shall be filed by the applicant requesting authorisation with the screening authority and shall be screened before the foreign investment is completed;
h. the screening authority shall be empowered to impose mitigating measures, prohibit, or unwind foreign investments subject to an authorisation requirement as referred to in paragraph 4 that were not filed or that were filed after completion and, where applicable, address effectively the consequences of non-compliance with the mitigating measures;
i. adequate procedures shall be provided for the notification of notifiable investments to the cooperation mechanism pursuant to Article 5.
5. Before taking a decision to authorise a foreign investment subject to mitigating measures or to prohibit a foreign investment, Member States shall inform the applicant requesting an authorisation and state the reasons on which they intend to take their decision, subject to the protection of information the disclosure of which would be contrary to the security or public order interests of the EU or one or more of the Member States and without prejudice to Union and national law concerning the protection of confidential information. Member States shall give the foreign investor the opportunity to make their views known before taking such decision.
1. Member States shall ensure that their screening mechanisms impose an authorisation requirement for foreign investments where the Union target established in their territory:
a. is part of or participates in one of the projects or programmes of Union interest listed in Annex I, including as a recipient of funds as defined in Article 2 paragraph 53 of Regulation 2018/1046 of the European Parliament and of the Council 0, or
b. is economically active in one of the areas listed in Annex II.
CHAPTER 3
THE UNION COOPERATION MECHANISM ON FOREIGN INVESTMENTS LIKELY TO NEGATIVELY AFFECT SECURITY OR PUBLIC ORDER
Article 5
Notification of foreign investments
1. Member States shall notify the Commission and the other Member States through the cooperation mechanism of any foreign investment in a Union target established in their territory that:
a. meets the conditions set out in Article 4(4) point (a); or
a. meets the conditions set out in Article 4(4) point (b) and any of the following conditions:
(i) the foreign investor or the foreign investor’s subsidiary in the Union is directly or indirectly controlled by the government, including state bodies, regional or local authorities or armed forces, of a third country, including through ownership structure, significant funding, special rights or state-appointed directors or managers;
(ii) the foreign investor, a natural person or entity controlling the foreign investor, the beneficial owner of the foreign investor, any of the subsidiaries of the foreign investor, or any other party owned or controlled by, or acting on behalf or at the direction of, such a foreign investor is subject to Union restrictive measures pursuant to Article 215 TFEU; or
(iii) the foreign investor or any of its subsidiaries was involved in a foreign investment previously screened by a Member State and was not authorised or only authorised with conditions; to determine this, the notifying Member State shall rely on information available to them, including the information contained in the secure database set up pursuant to Article 7(10) and information provided by the foreign investor on this matter.
2. Member States shall notify the Commission and the other Member States of any foreign investment in a Union target established in their territory where they initiate an in-depth investigation under their screening procedures. Furthermore, Member States shall notify the Commission and the other Member States of any foreign investment in a Union target established in their territory, in exceptional cases, where they intend to impose a mitigating measure or to prohibit the transaction without an in-depth investigation.
3. Member States may notify any foreign investment that do not meet the conditions set out in paragraphs 1 and 2 if the Member State where the Union target is established considers that a foreign investment could be of interest to the other Member States and the Commission from a security or public order perspective, including where the Union target has significant operations in other Member States, or belongs to a corporate group that has several companies in different Member States which are economically active in one of the areas listed in Annex II.
Where a Member State intends to notify a foreign investment in its territory that forms part of a multi-country transaction pursuant to Article 6(2), it shall coordinate with the other Member States who received the request for authorisation. The respective Member States shall notify the multi-country transaction and they shall endeavour to send their notifications to the cooperation mechanism on the same day.
Article 6
Content and procedures for notification of foreign investments
1. Member States shall ensure that a notification pursuant to Article 5 contains the information referred to in Article 10(1) and is sent to the Commission and other Member States via the secure and encrypted system referred to in Article 12(4):
a. within 15 calendar days of receiving the respective request for authorisation for foreign investments meeting any of the conditions set out in Article 5(1) or (3);
b. within 60 calendar days of receiving the request for authorisation for foreign investments meeting the conditions set out in Article 5(2).
1. The following procedures shall apply to multi-country transactions:
a. applicants requesting an authorisation shall file their requests for authorisation in all relevant Member States on the same day, and each request for authorisation shall make reference to the other requests;
b. where a Member State receives a request for authorisation that meets the conditions set out in point (a), it shall coordinate with the other Member States concerned, inter alia, to determine whether point (c) or (d) of this paragraph is applicable; the Commission may participate in such coordination upon request from one or more Member States;
c. if the requests for authorisation concern a foreign investment meeting any of the conditions set out in Article 5(1), the respective Member States shall send their notifications to the cooperation mechanism on the same day and within the deadline laid down in point (a) of paragraph 1 of this Article;
d. if the requests for authorisation concern a foreign investment meeting the conditions set out in Article 5(2), the respective Member States shall endeavour to send their notifications to the cooperation mechanism on the same day.
Article 7
Comments by Member States and opinions by the Commission on notified foreign investments
1. Any Member State may issue duly motivated comments to the notifying Member State via the secure and encrypted system referred to in Article 12(4). A Member State may issue such comments if it:
a. considers that a foreign investment is likely to negatively affect its security or public order; or
b. has information relevant for the screening of that foreign investment.
The Member State issuing comments shall simultaneously send its comments to the Commission and inform through the cooperation mechanism all other Member States that comments have been provided.
2. The Commission may issue a duly motivated opinion addressed to the notifying Member State via the secure and encrypted system referred to in Article 12(4). The Commission may issue such an opinion if:
a. it considers that such a foreign investment is likely to negatively affect the security or public order of more than one Member State;
c. it considers that such a foreign investment is likely to negatively affect projects or programmes of Union interest on grounds of security or public order;
or
d. it has relevant information related to that foreign investment.
The Commission may issue an opinion regardless of whether Member States have issued comments.
3. The Commission may issue a duly motivated opinion addressed to all Member States if it considers that several foreign investments or other similar investments if they were to be made, taken together, and having regard to their characteristics could affect the security or public order of the Union. After a Commission opinion is issued, the Commission may, as appropriate, discuss with Member States how to address the identified risks.
4. The Commission shall:
a. send opinions meeting the conditions set out in points (a) and (c) of paragraph 2 to all Member States that provided comments and notify the other Member States that an opinion was issued via the secure and encrypted system referred to in Article 12(4);
a. send opinions meeting the conditions set out in point (b) of paragraph 2 and opinions meeting the conditions in paragraph 3 to all Member States via the secure and encrypted system referred to in Article 12(4).
5. Where a Member State where the foreign investment is planned or completed receives a comment from another Member State pursuant to paragraph 1 or an opinion from the Commission pursuant to paragraph 2 or 3, it shall give utmost consideration to such a comment or opinion.
6. Following the receipt of a comment pursuant to paragraph 1, the Member State shall set up a meeting with the Member States who issued comments to discuss how to best address the risks identified. If the Member State where the foreign investment is planned or completed disagrees with the risks identified or, if applicable, the measure proposed with the comment, the Member States shall aim to identify alternative solutions. Where the comment concerns a multi-country transaction, the other Member States who notified the foreign investment shall also be invited to discuss whether the intended outcomes are compatible with one another and, where applicable, the intended conditions are able to address identified cross-border risks adequately. The Commission shall be invited to any such meetings.
7. Following the receipt of an opinion pursuant to paragraph 2 or 3, the procedure set out in paragraph 6 shall apply mutatis mutandis.
8. Following the receipt of an opinion pursuant to paragraph 2 or 3, the Member State where the foreign investment is planned or completed shall:
a. notify its screening decision to the respective Member States and to the Commission via the secure and encrypted system referred to in Article 12(4) no later than 3 calendar days after it was sent to the respective parties to the foreign investment;
b. provide a written explanation to the respective Member States and the Commission via the secure and encrypted system referred to in Article 12(4) no later than 7 calendar days after the screening decision was notified pursuant to paragraph (a) on:
(i) the extent to which it gave the Member States’ comments or the Commission opinion utmost consideration; or
(ii) the reason for its disagreement with the Member States’ comments or the Commission opinion.
6. Where the Member States or the Commission indicate that the screening decision referred to in paragraph 8, subparagraph (a), of this Article does not give utmost consideration to their comments provided pursuant to pursuant to paragraph 1 or the opinion provided pursuant to paragraph 2 or 3, the Member State where the investment is planned or completed shall organise a meeting to explain the obstacles encountered or the reasons for disagreement and shall endeavour to identify solutions, should a similar situation arise in the future. Where the screening decision concerns a multi-country notification, the other Member States who notified the foreign investment to the cooperation mechanism shall also be invited. The Commission shall be invited to any meetings organised pursuant to this paragraph.
7. The Commission shall set up a secure database made available to all Member States with information on the foreign investments assessed by the cooperation mechanism and the outcome of the assessments under the national screening mechanisms, including information about the relevant screening decisions. The Commission shall upload to that database the information it has at its disposal since 12 October 2020. By [date of application of this Regulation] Member States shall upload to that database the information at their disposal about the outcome of the relevant procedure under their own screening mechanisms. They may also provide additional explanations.
8. When issuing comments or an opinion pursuant to this Article, the Member States, and the Commission, as the case may be, shall consider whether such comments or opinion should be classified information and what level of classification should apply thereto, in accordance with Union and the respective national law on classified information.
Article 8
Deadlines and procedures for providing comments and opinions on notified foreign investments
1. Before a Member State issues a comment or the Commission issues an opinion pursuant to Article 7, the following procedure shall apply:
a. Member States shall inform the notifying Member State via the secure and encrypted system referred to in Article 12(4) that they reserve their right to issue comments no later than 15 calendar days following the receipt of the notification pursuant to Article 5;
b. the Commission shall inform the notifying Member State via the secure and encrypted system referred to in Article 12(4) that it reserves its right to issue an opinion no later than 20 calendar days following the receipt of the notification pursuant to Article 5.
2. When reserving their right to issue comments or an opinion, Member States and the Commission may request additional information from the notifying Member State. Any request for additional information shall be duly justified, limited to the information necessary for the Member States to provide comments or for the Commission to issue an opinion, proportionate to the purpose of the request and not unduly burdensome for the notifying Member State. Where a Member State requests additional information from the notifying Member State, it shall send such requests to the Commission simultaneously.
3. The following deadlines shall apply to the issuing of comments by Member States and opinions by the Commission referred to in Article 7:
a. where a Member State reserves its right to issue comments on a notified foreign investment without requesting additional information from the notifying Member State, the respective comments shall be addressed to the notifying Member State via the secure and encrypted system referred to in Article 12(4) no later than 35 calendar days following receipt of the complete notification of the foreign investment;
b. where the Commission reserves its right to issue an opinion on a notified foreign investment without requesting additional information from the notifying Member State, the respective opinion shall be addressed to the notifying Member State via the secure and encrypted system referred to in Article 12(4) no later than 45 calendar days following receipt of the complete notification of the foreign investment;
c. where a Member State reserves its right to issue comments on a notified foreign investment and requests additional information from the notifying Member State, the respective comments shall be addressed to the notifying Member State via the secure and encrypted system referred to in Article 12(4) no later than 20 calendar days following receipt of the complete additional information;
d. where the Commission reserves its right to issue an opinion and requests additional information from the notifying Member State, the respective opinion shall be issued to the notifying Member State via the secure and encrypted system referred to in Article 12(4) no later than 30 calendar days following receipt of the complete additional information.
The notifying Member State shall take their screening decision only after the deadlines referred to in points (a)-(d) have expired.
4. The notifying Member State shall notify the Commission and the other Member States via the secure and encrypted system referred to in Article 12(4) any substantial new information or circumstances relevant for the assessment of a foreign investment already notified pursuant to Article 5. If this information is made available before the deadlines set out in paragraph 3 expire, the notifying Member State, the Commission and the other Member States shall endeavour to agree on a mutually acceptable extension of the deadline. If the deadlines for the assessment of the initial notification set out in paragraph 3 have passed, they shall resume according to the deadlines set out in point (c) and (d) of paragraph 3.
9. The notifying Member State shall provide the complete additional information requested by the Commission or other Member States pursuant to paragraph 2 without undue delay via the secure and encrypted system referred to in Article 12(4). Where the notifying Member State provides additional information to a Member State, such additional information shall be sent to the Commission simultaneously.
5. Where the notifying Member State receives several requests for additional information about the same notifiable investment, it shall provide all the additional information requested simultaneously.
10. Where several notifying Member States receive requests for additional information about a given multi-country notification, the deadlines set out in paragraph 3 shall commence on the date of receipt of the last complete additional information. The Commission shall communicate this date and the deadline to the respective Member States.
11. Where, due to exceptional circumstances, the notifying Member State considers that its security or public order requires issuing a screening decision before the deadlines referred to in paragraph 3 expire, it shall notify the other Member States and the Commission of its intention and duly justify the need for immediate action. The other Member States and the Commission shall provide comments or issue an opinion expeditiously. This procedure shall not be invoked to serve purely the commercial interests of the applicant requesting the authorisation.
12. All deadlines set out in this Article shall be suspended between 25 December and 1 January and shall resume on 2 January.
Article 9
Own initiative procedure
1. A Member State that considers that a foreign investment in the territory of another Member State which has not been notified to the cooperation mechanism is likely to negatively affect its security or public order, it may open an own initiative procedure in relation to that foreign investment. Before opening the procedure, the Member State shall check that the Member State where the investment is planned or completed does not intend to notify the foreign investment to the cooperation mechanism.
2. Member States shall be granted at least 15 months, after the foreign investment has been completed, the right to open the procedure set out in paragraph 1, provided the respective foreign investment has not been notified to the cooperation mechanism in the meantime.
3. The Commission may open an own initiative procedure when it considers that a foreign investment in the territory of a Member State which has not been notified to the cooperation mechanism falls under Article 7(2). Before opening the procedure, the Commission shall check that the Member State where the investment is planned or completed does not intend to notify the foreign investment to the cooperation mechanism.
4. The Commission shall be granted at least 15 months, after the foreign investment has been completed, to open the procedure set out in paragraph 3, provided the respective foreign investment has not been notified to the cooperation mechanism in the meantime.
5. The Member States or the Commission shall open the own initiative procedure set out in paragraph 1 and 3 respectively by sending a duly motivated request for information via the secure and encrypted system referred to in Article 12(4) to the Member State where the foreign investment is planned or has been completed. Any request for information pursuant to this paragraph shall be duly justified, limited to the information necessary for the Member States to provide comments or for the Commission to issue an opinion, proportionate to the purpose of the request and not unduly burdensome for the notifying Member State. Where the request for information is submitted by a Member State, that Member State shall send the request to the Commission simultaneously.
6. The Member State where the investment is planned or completed shall provide the complete information requested by the other Member States or the Commission pursuant to paragraph 5 without undue delay via the secure and encrypted system referred to in Article 12(4). Where the notifying Member State provides additional information to a Member State, such additional information shall be sent to the Commission simultaneously.
9. Following receipt of information referred to in paragraph 6, Member States may provide comments and the Commission may provide an opinion to the Member State where the foreign investment is planned or has been completed. The rules and procedures laid down in Article 7 and 8 shall apply mutatis mutandis, subject to the following modifications:
a. the comments by Member States or the opinion by the Commission shall be sent no later than 35 calendar days following receipt of the complete information requested pursuant to paragraph 5.
b. for procedures initiated pursuant to paragraph 1, the Commission shall have 15 additional calendar days to issue an opinion after the deadline for the Member State set out in point (a) of this paragraph have expired.
Article 10
Information requirements
1. Member States shall ensure that information provided in the notification referred to in Article 5 and to the request of information referred to in 9(5) include:
a. the name of the investor, the global ultimate owner of the investor and the Union target, the ownership structure of the investor and, where applicable, of the corporate group to which the investor is a part;
b. a comprehensive description of the investment, its value and information on the ownership of the Union target, before and after the foreign investment, on the funding of the investment and its source, on the basis of the best information available to the Member State;
c. name and address of the Union target, its activities and alternative providers, the ownership structure of the Union target and, where applicable, of the corporate group to which the Union target is a part;
d. if applicable, information about the other legal entities of the same corporate group as the Union target that are located in other Member States;
e. activities of the foreign investor, its name and address; and
f. the date when the foreign investment is planned to be completed or has been completed.
13. The Commission shall set out, by means of implementing acts pursuant to Article 21, to be adopted prior to the date of application of this Regulation referred to in Article 24(2), the form to be used to provide the type of information required under paragraph 1.
10. Where the Commission or Member States request additional information pursuant to Article 8(1) or Article 9(5) from the Member State where the foreign investment is planned or has been completed, that Member State shall endeavour to provide such information, if available, to the requesting Member States and the Commission.
11. Where necessary, the Member State where the foreign investment is planned or has been completed may request the applicant requesting an authorisation or any other relevant undertaking to provide the information referred to in paragraphs 1 and 3. The request for information may concern information necessary for the Member State to determine if any of the conditions set out in Article 5(1) are met. The undertaking concerned shall provide the requested information to the Member State where the foreign investment is planned or has been completed within 15 calendar days of the request.
12. The Member State where the foreign investment is planned or completed and the Commission may request other Member States to seek information from undertakings in their territory, provided this information is relevant and strictly necessary for assessing a foreign investment pursuant to Article 13. The Member State receiving the request to seek information shall, without delay, request the undertaking to provide that information and shall notify it to the Member State where the foreign investment is planned or completed and the Commission, in accordance with the procedure set out in Articles 8(2) and 9(6) as applicable.
13. A Member State shall notify the Commission and the other Member States concerned if, in exceptional circumstances, it is unable, despite its best efforts, to provide the information referred to in paragraphs 3, 4 or 5. That Member State shall duly explain the reasons for not being able to provide the information.
14. If no or incomplete information is provided, the comment issued by Member States, or the opinion issued by the Commission may be based on the information available to them.
14. Where the information referred to in paragraphs 1 to 6 originates from an undertaking, the Member State receiving the information from the undertaking shall check the completeness of the information and shall take reasonable steps to ensure that the information is accurate before providing it to the Commission and other Member States.
Article 11
Common requirements for screening mechanisms to ensure an effective cooperation mechanism
1. Member States shall provide the necessary resources, legal and administrative means for their efficient and effective participation in the cooperation mechanism.
15. Each Member State and the Commission shall designate a contact point for the purposes of the cooperation mechanism.
16. Member States shall ensure that the deadlines and procedures set out in their screening mechanisms allow them to provide complete answers to requests for additional information by the Commission or other Member States.
17. Member States shall ensure that their screening mechanisms give sufficient time and means to assess and give utmost consideration to other Member States’ comments and Commission opinions before a screening decision is taken. This includes having all necessary legal means and powers to consider concerns expressed or likely impacts identified by another Member State or the Commission in its screening decision or in any other relevant instrument at its disposal. Where a foreign investment is notified to the Commission and other Member States pursuant to Article 5, the screening mechanisms shall not allow Member States to take their screening decision until the deadlines for comments by the Member States and Commission opinions set out in Article 8(3) expire.
18. Member States shall ensure that their national laws allow compliance with the obligations set out in paragraphs 5 to 9 of Article 7.
19. The screening authorities shall be empowered to investigate, assess, decide on and monitor foreign investments brought to their attention pursuant to Article 9(7).
20. Where mitigating measures in a screening decision require compliance by undertakings established in other Member States, the Member States that adopted a screening decision shall cooperate with the other Member State or Member States concerned on the monitoring and enforcement of screening decision. Member States shall ensure that they have all necessary legal means and powers to address effectively the consequences of non-compliance with the mitigating measures provided in a screening decision.
Article 12
Confidentiality of information exchanges in the cooperation mechanism
1. Information received in accordance with the procedures set out in Articles 5, 7 and 9 shall be used only for the purpose for which it was requested, unless:
a. the originator of the information explicitly agrees to another use; or
b. the Court of Justice of the European Union or a court of the Member State where the foreign investment is planned or completed requests such information for the purpose of legal proceedings.
2. Member States and the Commission shall ensure the confidentiality of the information they provide or receive in application of this Regulation, in accordance with national and Union law. When dealing with requests for access to documents provided or received in application of this Regulation, Member States and the Commission shall refrain from disclosing any information that would undermine the purpose of the investigations conducted pursuant to this Regulation.
1. Member States and the Commission shall ensure that classified information provided or exchanged under this Regulation is not downgraded or declassified without the prior written consent of the originator.
2. The Commission shall provide a secure and encrypted system to support the exchange of information between the contact points.
CHAPTER 4
FOREIGN INVESTMENTS LIKELY TO NEGATIVELY AFFECT SECURITY OR PUBLIC ORDER
Article 13
Determination of likely negative impact on security and public order
1. Member States shall determine, for the purposes of taking a screening decision pursuant to Article 14 or issuing a duly motivated comment pursuant to Article 7(1) or Article 9(7), whether a foreign investment is likely to negatively affect security or public order.
2. The Commission shall determine, for the purpose of issuing a duly motivated opinion pursuant to Article 7(2) or (3) or Article 9(7), whether it considers a foreign investment to be likely to negatively affect security or public order.
3. When determining whether an investment is likely to negatively affect security or public order, the Member States or the Commission shall in particular consider whether the investment concerned is likely to negatively affect:
a. the security, integrity and functioning of critical infrastructure, whether physical or virtual; in that context, based on the information available, it shall also be assessed whether the foreign investment is likely to negatively affect the resilience of any of the critical entities they have identified under Directive (EU) 2022/2557 of the European Parliament and of the Council0 as well as entities in scope of Directive (EU) 2022/2555 of the European Parliament and of the Council0. The results of the Union level coordinated security risk assessments of critical supply chains carried out in accordance with Article 22(1) of Directive (EU) 2022/2555 shall also be taken into account. ;
b. the availability of critical technologies;
a. the continuity of supply of critical inputs;
a. the protection of sensitive information, including personal data, in particular with regard to the ability of the foreign investor to access, control, and otherwise process such personal data, or
b. the freedom and pluralism of the media, including online platforms that can be used for large scale disinformation or criminal activities.
4. When determining whether an investment is likely to negatively affect security or public order, the Member States or the Commission shall also take into account information related to the foreign investor, including:
a. whether the foreign investor, a natural person or entity controlling the foreign investor, the beneficial owner of the foreign investor, any of the subsidiaries of the foreign investor, or any other party owned or controlled by, or acting on behalf or at the direction of the foreign investor was involved in a foreign investment previously screened by a Member State and that was not authorised or was only authorised with conditions; to determine this, Member States and the Commission shall rely on information available to them, including the information contained in the secure database set up pursuant to Article 7(10);
a. where applicable, the reasons for subjecting the foreign investor, a natural person or entity controlling the foreign investor, the beneficial owner of the foreign investor, any of the subsidiaries of the foreign investor, or any other party owned or controlled by, or acting on behalf or at the direction of the foreign investor to restrictive measures pursuant to Article 215 TFEU;
b. whether the foreign investor or any of its subsidiaries has already been involved in activities negatively affecting the security or public order in a Member State;
c. whether the foreign investor or any of its subsidiaries has engaged in illegal or criminal activities, including the circumvention of Union restrictive measures pursuant to Article 215 TFEU;
d. whether the foreign investor, a natural person or entity controlling the foreign investor, the beneficial owner of the foreign investor, any of the subsidiaries of the foreign investor, or any other party owned or controlled by, or acting on behalf or at the direction of the foreign investor is likely to pursue a third country’s policy objectives, or facilitate the development of a third country’s military capabilities.
Article 14
Screening decisions on foreign investments likely to negatively affect security or public order
1. Where, taking into account the criteria laid down in Article 13 and, where applicable, in the light of comments provided by other Member States pursuant to Article 7(1) or Article 9(7), or an opinion provided by the Commission pursuant to Article 7(2) or (3) or Article 9(7), the Member State in which the foreign investment is planned or completed concludes that the foreign investment is likely to negatively affect security or public order in one or more Member States, including where a project or programme of Union interest is concerned, it shall issue a screening decision to:
a. authorise the foreign investment subject to mitigating measures, or
b. prohibit the foreign investment.
The screening decision shall comply with the principle of proportionality and take into consideration all circumstances of the foreign investment.
2. Where the Member State where the foreign investment is planned or completed considers that other measures pursuant to Union or national law are available and appropriate to address the foreign investment’s effect on security and public order, the foreign investment shall be authorised without conditions.
CHAPTER 5
FINAL PROVISIONS
Article 15
International cooperation
Member States and the Commission may cooperate with the responsible authorities of third countries on issues relating to the screening of investments on grounds of security and public order.
Article 16
Annual reporting at Union level
1. By 31 March of each year beginning in [add date: first year of application], Member States shall report to the Commission, on a confidential basis, on their activities under their screening mechanism and under the cooperation mechanism for the preceding calendar year. This report shall contain information on:
a. the number of foreign investments screened after a request for authorisation and after an own initiative procedure;
a. the number of foreign investments approved with and without conditions;
b. the number of foreign investments prohibited, the number of foreign investments withdrawn;
c. the number of foreign investments notified to the cooperation mechanism, and the number of comments issued by the respective Member State;
d. information on the origin of the foreign investors and the sector of activity of the targets of the foreign investments screened, authorised or prohibited;
e. an aggregate presentation of risks and vulnerabilities identified in the foreign investments that led to a screening decision;
15. On the basis of the information received in accordance with paragraph 1, and based on its assessment of trends and developments, the Commission shall provide an annual report on implementation of this Regulation to the European Parliament and to the Council. That report shall be made public.
Article 17
Processing of personal data
1. Any processing of personal data pursuant to this Regulation shall be carried out in accordance with Regulation (EU) 2016/679 and Regulation (EU) 2018/1725 and only when necessary for the screening of foreign investments by Member States and for ensuring the effectiveness of the cooperation provided for in this Regulation.
2. Personal data related to the implementation of this Regulation shall be kept only for the time necessary to achieve the purposes for which they were collected.
Article 18
Evaluation
1. The Commission shall evaluate the functioning and effectiveness of this Regulation 5 years after the date of application of this Regulation and every 5 years thereafter and present a report to the European Parliament and to the Council. Member States shall be involved in this exercise and, if necessary, provide the Commission with additional information for the preparation of that report.
3. Where the report from the Commission recommends amendments to this Regulation, it may be accompanied by a legislative proposal.
Article 19
Delegated acts
1. The Commission is empowered to adopt delegated acts in accordance with Article 20 for the purposes of amending, where necessary, the list of projects or programmes of Union interest set out in Annex I to take account of the adoption and amendment of Union law relating to projects or programmes of Union interest relevant to security or public order.
2. The Commission is empowered to adopt delegated acts in accordance with Article 20 for the purposes of amending, where necessary, the list technologies, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union set out in Annex II to take account of changes in the circumstances relevant to the security or public order interests of the Union. In particular, these considerations shall include the following:
a. the resilience of supply chains of particular importance for the security or public order interests of the Union;
b. the resilience of infrastructures of particular importance for the security or public order interests of the Union;
c. the advancement of technologies of particular importance for security or public order of the Union;
d. the emergence of vulnerabilities in relation to access to or other forms of processing of sensitive information, including personal data to the extent they are likely to negatively affect the security or public order interests of the Union; and
e. the emergence of a geopolitical situation of particular importance for security or public order of the Union.
Article 20
Exercise of the delegation
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.
2. The power to adopt delegated acts shall be conferred on the Commission for an indeterminate period of time from [date of entry into force of the basic legislative act].
3. The delegation of power may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.
4. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making.
5. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.
6. A delegated act adopted pursuant to Article 19 shall enter into force only if no objection has been expressed by the European Parliament or the Council within 2 months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by 2 months on the initiative of the European Parliament or of the Council.
Article 21
Committee procedure for implementing acts
1. The Commission is empowered to adopt implementing acts setting out the forms to be used to provide the information indicated in Article 10(1).
7. Implementing acts referred to in paragraph 1 shall be adopted in accordance with the advisory procedure referred to in Article 22(2).
Article 22
Committee
1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011.
16. Where reference is made to this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.
Article 23
Repeal
Regulation (EU) 2019/452 is repealed with effect from [date: 15 months after entry into force].
References to the repealed Regulation shall be construed as references to this Regulation.
Article 24
Entry into force and application
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
It shall apply from [date: 15 months after entry into force].
This Regulation shall be binding in its entirety and directly applicable in all Member States.