EU Reaches Agreement to Strengthen Foreign Direct Investment Screening Framework for Economic Security

On December 11, 2025, the European Commission welcomed a political agreement between the European Parliament and the Council of the EU on strengthening the EU's Foreign Direct Investment (FDI) Screening Framework, a key component of the EU's economic security strategy. Key revisions include making investment screening mechanisms mandatory for all member states; establishing a minimum mandatory scope to ensure all review foreign investments in core sensitive sectors; extending screening to investments indirectly controlled by foreign entities; and setting minimum harmonization standards for member states' mechanisms to enhance EU-level coherence.

The revised framework is expected to be formally adopted in the first half of 2026 and enter into application 18 months later. The move aims to address external challenges and more effectively protect European security and strategic interests.