On Wednesday, January 15, the European Commission called on the 27 member states to review foreign investments in “strategically important” and “high-risk” areas, including semiconductors, artificial intelligence (AI), and quantum technology, and to submit preliminary reports by mid-July.
This move comes as the United States government has recently implemented a series of stricter actions against the Chinese semiconductor industry. As part of national security, both Europe and America are vigilant against the theft of related technologies by the Chinese Communist Party.
According to a report by Investment Monitor, the request from the European Commission stems from a European Union white paper, which points out that “member states have not systematically reviewed and assessed foreign investments for security purposes.”
The Commission highlighted that the three aforementioned technology sectors are “strategically important” and “high-risk.” Therefore, EU countries are required to review and assess the technology transfers involved in such foreign investment cases, the risks they pose to the EU’s economic security, covering transactions since January 1, 2021.
The Commission’s purpose is to ensure that “key technologies and knowledge do not fall into the wrong hands,” giving member states a 15-month review period and requesting a progress report by July 15, with a complete report due by the end of next March.
The Commission stated that further actions will be taken based on the review reports from each country.
The EU is strengthening its technological and supply chain autonomy through its economic security strategy, reducing dependence on other countries. Therefore, in addition to restricting exports of dual-use high-tech products, the EU has begun to enhance systematic reviews of outbound foreign direct investment (FDI) and inbound FDI.
In the white paper, the Commission stated that it established an expert group on foreign investment in July 2023 to draw on the experiences of member states to review potential security risks and disparities and take possible policy actions when necessary. The expert group has held three meetings in 2023.
Investment Monitor quoted EU Trade Commissioner Maroš Šefčovič as saying, “The EU is one of the global leaders in providing and attracting world-class investments, now and in the future. However, today’s geopolitics mean we must have a deeper understanding of the potential risks it could entail.”
He added, “Assessing the EU’s foreign investments in key technological areas will help us better understand the potential threats we face.”