The current Union framework for the screening of foreign direct investment is about to be renewed. In January 2024, the Commission presented a proposal for a new Regulation that is supposed to bring about more convergence in the currently strongly fragmented national legislation landscape. The Proposal obliges Member States to introduce national screening mechanisms and tries to harmonise those by prescribing a minimum scope of application and a number of screening factors. The article gives an overview of the changes and tries to analyse in how far they can contribute to a more enhanced, effective screening exercise across the Union. In addition, the Proposal raises questions as to its conformity with primary law, in particular with regard to its appropriate legal basis and its relation to the free movement rules. By expanding FDI screening also to certain types of foreign-held intra-EU investment, a dichotomy between FDI screening and the freedom of establishment is created. The article thus tries to analyse how the Proposal can be reconciliated with the European Court of Justice’s (strict) case law on restrictions to the freedom of establishment.
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