With 508 votes in favour, 64 against and 90 abstentions, MEPs gave their green light to an agreement with EU member states on the mandatory screening of foreign investments in sensitive sectors such as defence, semiconductors, artificial intelligence, critical raw materials and financial services, in order to identify and address potential security or public order risks while remaining open to foreign capital inflows.
The procedures applicable to national screening mechanisms will be streamlined, to reduce complexity and make the EU a more attractive place to invest. Cooperation among national screening authorities and with the Commission will be enhanced, facilitating coordination and joint action on cross-border security risks. The new law will also cover transactions within the EU where the investor is ultimately owned by individuals or entities from a non-EU country.
It was also agreed that further action at Union level is needed to address economic security risks resulting from foreign investments. The Commission also committed to take the initiative on setting the conditions for foreign investment in specific strategic sectors. The Commission delivered on this commitment by submitting a legislative proposal for an Industrial Accelerator Act on 4 March 2026.
Parliament’s rapporteur Raphaël Glucksmann (S&D, FR) said:“ With this text, we are closing a chapter of European naivety. Certain foreign states are seeking to weaken us. We are turning the page on the wilful blindness of Member States that allowed foreign actors to seize control of sensitive sectors of our economy. But our work on foreign investment is not finished – the fight for Europe’s independence and sovereignty continues, now with the proposed Industrial Accelerator Act.”
Background
The current foreign direct investment screening regulation entered into application on 11 October 2020. Following an evaluation of its functioning, the Commission proposed a revision of the law in January 2024 to address the deficiencies identified. The COVID-19 pandemic, Russia’s war of aggression against Ukraine and other geopolitical tensions have underlined the need to be able to identify risks and do more to protect EU critical assets from certain investments.
Next steps
The new regulation now has to be formally approved by the Council too, before entering into force and being applied 18 months later.