EU Calls for Review of Outbound Investments in Key Technologies

January 16, 2025 — The European Commission has published a Recommendation urging EU Member States to conduct a review of outbound investments made by their companies into non-EU countries.

This Recommendation focuses on three strategically important and high-risk technology areas: semiconductors, artificial intelligence, and quantum technologies. It calls upon Member States to assess potential risks to economic security that may arise from these transactions.

This review of outbound investments will inform a subsequent decision regarding the need for further action at both the EU and national levels to address any identified risks. The Commission's primary objective is to safeguard the EU's economic security by preventing EU outbound investments from having negative impacts, specifically by ensuring that critical technologies and know-how do not fall into the wrong hands.

The Recommendation on outbound investments builds upon a previously published White Paper and a subsequent public consultation, both of which confirmed the need to assess potential security risks related to outbound investments. This initiative is a key component of the EU's Economic Security Strategy, operating in conjunction with ongoing efforts related to inbound foreign direct investment screening.

Recognizing the importance of international cooperation, the EU's Economic Security Strategy emphasizes the necessity of coordination with third countries on economic security matters. The Commission has expressed its intention to further engage with allies on the issue of outbound investment screening.

The Recommendation requests Member States to collaborate with relevant stakeholders to review outbound investments made by EU investors in the three designated technologies within third countries. This review process is expected to last 15 months and should encompass both ongoing and past transactions dating back to January 1, 2021. Drawing upon the work of the Commission's Expert Group on Outbound Investments, the Recommendation provides guidance to Member States on how to identify and evaluate potential risks associated with these transactions. Member States are required to submit a progress report by July 15, 2025, and a comprehensive report on their implementation of the Recommendation, including any identified risks, by June 30, 2026.

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