Changes from report parliamentary committee draft to plenary report

AddedArticle 13 – paragraph 4 a (new): 4a. The Commission shall make available a risk evaluation form that may be used by Member States to assess the elements referred to in paragraphs 3 and 4.

AddedArticle 13 – paragraph 4 b (new): 4b. The Commission may carry out a risk assessment relating to a specific sector, critical technology, foreign investors or Union undertakings to inform screening decisions of the Member States. That risk assessment shall be made available in the secure database set up pursuant to Article 12a(6a) and shall be taken into account by Member States when determining whether an investment is likely to negatively affect security or public order.

Article 14 – title: Screening decisions on foreign investments

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ChangedArticle 14 – paragraph 2:1 2.– Wheresubparagraph the1 Member– Stateintroductory wherepart: Where, taking into account the foreigncriteria investmentlaid isdown plannedin orArticle completed13 concludesand, thatwhere theapplicable, foreignin investmentthe islight notof likelycomments toprovided negativelyby affectother securityMember orStates publicpursuant orderto inArticle one7(1) or more MemberArticle States9(7), or considersan thatopinion otherprovided measuresby the Commission pursuant to UnionArticle 7(2) or national(3) lawor areArticle available9(7), and appropriatewithout prejudice to addressthe Commission’s power to adopt a decision pursuant to Article 7(9c), the host Member State concludes that the foreign investment’sinvestment effectis onlikely to negatively affect security andor public order,order thein foreignone investmentor more Member States, including where a project or programme of Union interest is concerned, it shall beissue authoriseda withoutscreening conditions.decision to:

Change 46

RemovedArticle 14 – paragraph 2 a (new): 2a. The mitigating measures referred to in paragraph 1, point (a), may include: / (a) changes to the proposed governance structure of the target; / (b) modifications to the voting rights conferred on the investor; / (c) prevention of unauthorised access to sensitive technologies or information; / (d) commitments by the investor to ensure a specific supply and/or supply to a specific client; / (e) commitments by the investor to maintain or create local added value; / (f) commitments by the investor to address the risk of dependency, including the transfer of technologies and know-how; / (g) measures to ensure the continuation of business activities; / (h) requirements to source critical components from secure and reliable suppliers; / (i) implementation of cybersecurity protocols to protect against potential threats; an obligation to store and process specific data within the Union.

AddedArticle 14 – paragraph 1 – subparagraph 2: The screening decision shall comply with the principle of proportionality, be based on documented risks and take into consideration all circumstances of the foreign investment.

RemovedArticle -15 (new): Article -15 / Group of experts on the screening of foreign direct investments into the Union / 1. The group of experts on the screening of foreign direct investments into the Union providing advice and expertise to the Commission shall continue to discuss issues relating to the screening of foreign direct investments, share best practices and lessons learned, and exchange views on trends and issues of common concern relating to foreign direct investments. The Commission shall also seek the advice of that group on systemic issues relating to the implementation of this Regulation. / 2. The discussions in that group shall be kept confidential.

AddedArticle 14 – paragraph 2: 2. Where the host Member State concludes that the foreign investment is not likely to negatively affect security or public order or considers that other measures pursuant to Union or national law are available and appropriate to effectively address the foreign investment’s effect on security and public order, and except in cases where the Commission has taken a decision pursuant to Article 7(9c), the foreign investment shall be authorised without conditions.

RemovedArticle 15 – paragraph 1: Member States and the Commission may cooperate with the responsible authorities of third countries on issues relating to the screening of investments on grounds of security and public order, including exchange of information and best practices, as well as capacity-building. That cooperation may also encourage the adoption of investment screening mechanisms by third countries, in particular by countries that are candidates for accession to the Union and countries in the Union’s neighbourhood.

AddedArticle 14 – paragraph 2 a (new): 2a. The mitigating measures referred to in paragraph 1, point (a), shall be sufficient to address the foreign investment’s effect on security and public order and shall comply with the principle of proportionality. Those measures may include: / (a) changes to the proposed governance structure of the target; / (b) modifications to the voting rights conferred on the investor; / (c) prevention of unauthorised access to sensitive technologies or information; / (d) commitments by the investor to ensure a specific supply and/or supply to a specific client; / (e) commitments by the investor to maintain or create local added value; / (f) commitments by the investor to address the risk of dependency, including the transfer of technologies and know-how; / (g) measures to ensure the continuation of business activities; / (h) requirements to source critical components from secure and reliable suppliers; / (i) implementation of cybersecurity protocols to protect against potential threats; / (j) the requirement for the foreign investor to establish a joint venture with a Union undertaking; / (k) an obligation to store and process specific data within the Union.

RemovedArticle 15 a (new): Article 15a / Public Transparency Requirements / 1. By ... [12 months from the date of entry into force of this Regulation], the Commission shall publish guidelines regarding: / (a) the concept of foreign investment, in particular the assessment criteria for establishing whether an investment enables decisive influence on a Union target or effective participation in its management pursuant to Article 2, point (2); / (b) the assessment criteria to establish whether an undertaking is part of or participates in a project or programme of Union interest pursuant to Article 4(4), point (a); / (c) the assessment criteria to establish whether an undertaking is economically active in one of the areas listed in Annex II pursuant to Article 4(4), point (b); / (d) the criteria for assessing potential risks to the security and public order of the Union; / (e) the criteria for assessing potential risks to the security and public order posed by transactions involving Union targets that have not yet been established. / Before issuing the guidelines referred to in the first subparagraph, the Commission shall conduct appropriate consultations with stakeholders and Member States. The Commission shall regularly update the guidelines in light of the experience gained in implementing this Regulation. / 2. The Commission shall publish a list of all screening mechanisms established by the Member States. That list shall contain summary information on the respective scope and on the relevant procedura…

AddedArticle 14 a (new): Article 14a / Group of experts on the screening of foreign direct investment into the Union / 1. The group of experts on the screening of foreign direct investments into the Union, which provides advice and expertise to the Commission, shall continue to engage in discussions regarding foreign direct investment screening. It shall share best practices, lessons learnt, and exchange views on emerging trends and issues of common concern related to foreign direct investments. The Commission shall also seek the advice of that group on systemic matters concerning the implementation of this Regulation. That group shall meet on a regular basis to ensure ongoing dialogue and mutual learning. / 2. The discussions in that group shall be kept confidential.

AddedArticle 14 b (new): Article 14b / Public transparency requirements / 1. By ... [the date of entry into force of this Regulation] the Commission shall publish guidelines regarding the application of: / (a) the criteria for determining whether an investment enables effective participation in the management or control of a Union target pursuant to Article 2, point (1); / (b) the criteria for determining whether an undertaking is part of or participates in a project or programme of Union interest pursuant to Article 4(4), point (a); / (c) the criteria for determining whether an undertaking is economically active in one of the areas listed in Annex II pursuant to Article 2, point (9); / (d) the criteria for assessing potential risks to security and public order, including cross-border risks and those posed by greenfield investments, as set out in Article 13. / Before issuing the guidelines referred to in the first subparagraph, the Commission shall conduct appropriate consultations with stakeholders. The Commission shall regularly update those guidelines in light of the experience gained in implementing this Regulation. / 2. The Commission shall publish a list of all screening mechanisms established by the Member States. That list shall contain summary information on the respective scope and on the relevant procedural rules of each screening mechanism. It shall also contain a link to the screening authorities’ guidance referred to in paragraph 3 and the contact details of the contact point concerned.…

AddedArticle 15 – paragraph 1: Member States and the Commission may cooperate with the responsible authorities of third countries and engage through bilateral and multilateral platforms on issues relating to the screening of investments on grounds of security and public order. That cooperation may involve the exchange of information and best practices, as well as technical and capacity-building support. In the context of that cooperation, the Commission shall encourage the establishment of investment screening mechanisms by third countries, particularly those that are candidates for accession to the Union and countries in the Union’s neighbourhood.

Article 16 – paragraph 1 – introductory part: 1. By 31 March of each year beginning in [add date: first year of application], Member States shall report to the Commission, on a confidential basis, on their activities under their screening mechanism and under the cooperation mechanism for the preceding calendar year. This report shall contain:

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AddedArticle 16 – paragraph 1 – point c: (c) the number of foreign investments prohibited, the number of foreign investments withdrawn or unwound;

Article 16 – paragraph 1 – point e: (e) information on the origin of the foreign investors and the sector of activity of the targets of the foreign investments screened, authorised without conditions, authorised with conditions, and foreign investments prohibited, respectively;

Article 16 – paragraph 1 – point e a (new): (ea) the average duration of investment screening procedures;

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RemovedArticle 16 – paragraph 2: 2. On the basis of the information received in accordance with paragraph 1, and based on its assessment of trends and developments, the Commission shall provide an annual report on implementation of this Regulation to the European Parliament and to the Council by 30 September of each year beginning in ... [the first year of application of this Regulation]. That report shall be made public.

AddedArticle 16 – paragraph 1 – point f: (f) a description of the risks and vulnerabilities identified in the foreign investments that led to a screening decision;

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ChangedArticle 16 – paragraph 21 – subparagraphpoint 1f a (new): The Commission’s annual report shall contain the information referred to in(fa) the paragraph 1number of thisown Article.initiative Itprocedures shallopened alsopursuant containto anArticle assessment9(1) ofand the trends andnumber figuresof oninstances foreignwhere directthey investmentsresulted intoin the Union, relevant legislative developments in Memberinitiation Statesof anda internationalscreening cooperationprocedure activitiesby pursuantthe tohost ArticleMember 15.State.

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RemovedArticle 18 – paragraph 1: 1. The Commission shall evaluate the functioning and effectiveness of this Regulation 5 years after the date of application of this Regulation and every 5 years thereafter and present a report to the European Parliament and to the Council. Member States shall be involved in this exercise and, if necessary, provide the Commission with additional information for the preparation of that report. The report shall in particular include an assessment of the contribution of this Regulation to the economic security of the Union.

AddedArticle 16 – paragraph 1 a (new): 1a. By ... [1 January of the first year of application], the Commission shall adopt an implementing act pursuant to Article 21 setting out the form to be used for reporting the information referred to in paragraph 1 of this Article.

RemovedArticle 19 – paragraph 2 a (new): 2a. The first of the delegated acts referred to in paragraph 2 of this Article shall be adopted by ... [12 months from the date of entry into force of this Regulation] for the purpose of amending Annex II to further specify the list of technologies, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union.

AddedArticle 16 – paragraph 2: 2. Based on the information received in accordance with paragraph 1, its implementation practice, and its assessment of trends and developments, the Commission shall provide an annual report on implementation of this Regulation to the European Parliament and to the Council by 30 September of each year beginning in ... [the first year of application of this Regulation]. That report shall be made public.

RemovedArticle 20 – paragraph 2: 2. The power to adopt delegated acts referred to in Article 19 shall be conferred on the Commission for a period of five years from ... [the date of entry into force of this Regulation]. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

AddedArticle 16 – paragraph 2 a (new): 2a. The Commission’s annual report shall include an overview of the information referred to in paragraph 1 for each Member State, an assessment of the trends and figures on foreign investments into the Union, relevant legislative developments across Member States, international cooperation efforts, lessons learnt, and best practices to support the implementation of this Regulation.

RemovedArticle 21 – paragraph 1: 1. The Commission is empowered to adopt implementing acts setting out: / (a) the forms to be used to provide the information indicated in Article 10(1); / (b) the form to be used for filings via the single portal pursuant to Article 12a; and / (c) the modalities for the functioning of the single portal and the secure and encrypted system described in Article 12a.

AddedArticle 18 – paragraph 1: 1. The Commission shall evaluate the functioning and effectiveness of this Regulation 3 years after the date of application of this Regulation and every 5 years thereafter and present a report to the European Parliament and to the Council. Member States shall be involved in this evaluation process and, if necessary, provide the Commission with additional information for the preparation of that report. That report shall include an analysis of the evolution of foreign investments into the Union as well as an assessment of the contribution of this Regulation to the economic security of the Union. It should include an assessment of whether the conditions set out in Article 4(4) and (4a) should be amended in order to ensure a consistent approach to the screening of foreign investments, taking into consideration the criteria set out in Article 13(3) and (4), including the security of military facilities and other sensitive public facilities. The report shall also assess the compliance costs faced by businesses.

RemovedAnnex II – point 5 a (new): 5a. Aeronautics infrastructures and technologies, as covered in particular by Regulation (EU) 2018/1139 of the European Parliament and of the Council1a. / 1a Regulation (EU) 2018/1139 of the European Parliament and of the Council of 4 July 2018 on common rules in the field of civil aviation and establishing a European Union Aviation Safety Agency, and amending Regulations (EC) No 2111/2005, (EC) No 1008/2008, (EU) No 996/2010, (EU) No 376/2014 and Directives 2014/30/EU and 2014/53/EU of the European Parliament and of the Council, and repealing Regulations (EC) No 552/2004 and (EC) No 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No 3922/91 (OJ L 212, 22.8.2018, p. 1).

AddedArticle 19 – paragraph 2 – introductory part: 2. The Commission is empowered to adopt delegated acts in accordance with Article 20 for the purposes of amending, where necessary, the list of technologies, materials, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union set out in Annex II to take account of changes in the circumstances relevant to the security or public order interests of the Union. In particular, these considerations shall include the following:

AddedArticle 19 – paragraph 2 – point b a (new): (ba) the results of relevant risk assessments undertaken by the Commission and Member States under the Union Economic Security Strategy;

AddedArticle 19 – paragraph 2 a (new): 2a. The first of the delegated acts referred to in paragraph 2 of this Article shall be adopted by ... [9 months from the date of entry into force of this Regulation] for the purpose of amending Annex II to further specify the list of technologies, materials, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union.

AddedArticle 20 – paragraph 2: 2. The power to adopt delegated acts referred to in Article 19 shall be conferred on the Commission for a period of five years from ... [the date of entry into force of this Regulation]. The Commission shall draw up a report in respect of the delegation of power no later than nine months before the end of the five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or Council opposes such extension no later than three months before the end of each period.

AddedArticle 21 – paragraph 1: deleted

AddedArticle 21 – paragraph 2: 2. Implementing acts referred to in Article 10(2), Article 12a(3), Article 12a(6) and Article 16(1a) shall be adopted in accordance with the advisory procedure referred to in Article 22(2).

AddedArticle 23 – paragraph 1: Regulation (EU) 2019/452 is repealed with effect from ... [12 months from the date of entry into force of this Regulation].

AddedArticle 24 – paragraph 2: It shall apply from ... [12 months from the date of entry into force of this Regulation].

AddedArticle 24 – paragraph 2 a (new): However, Article 19(2) and (2a) shall apply from ... [the date of entry into force of this Regulation]. / This Regulation shall apply regardless of whether the single portal referred to in Article 12a(2) is operational.

AddedAnnex I – point 7 – paragraph 2: Regulation (EU) 2024/1679 of the European Parliament and of the Council of 13 June 2024 on Union guidelines for the development of the trans-European transport network, amending Regulations (EU) 2021/1153 and (EU) No 913/2010 and repealing Regulation (EU) No 1315/2013 (OJ L 1679, 28.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1679/oj).

AddedAnnex I – point 17 a (new): 17a. European Defence Industry Programme (EDIP) / [Reference to be added once the Regulation has been adopted.]

AddedAnnex I – point 20 a (new): 20a. Projects of common interest and projects of mutual interest / Commission Delegated Regulation (EU) 2024/1041 of 28 November 2023, amending Regulation (EU) 2022/869 of the European Parliament and of the Council as regards the Union list of projects of common interest and projects of mutual interest. (OJ L 107, 26.3.2021, p. 1, ELI: http://data.europa.eu/eli/reg_del/2024/1041/oj).

AddedAnnex II – subheading 1: List of technologies, materials, assets, facilities, equipment, networks, systems, services and economic activities of particular importance for the security or public order interests of the Union

AddedAnnex II – point 3 – point a – introductory part: a. Semiconductors technologies:

AddedAnnex II – point 3 – point a – indent 1: – design of integrated circuits and other semiconductors, including microprocessors, graphic processors, microcontrollers, logic chips, memory chips, radio frequency chips, photonic chips, analog chips, quantum chips, optical semiconductors, power semiconductors, discretes and sensors / microsystem, as well as related semiconductor intellectual property core

AddedAnnex II – point 3 – point a – indent 2: – electronic design automation software for the design of integrated circuits and other semiconductors, or for the design of advanced packaging

AddedAnnex II – point 3 – point a – indent 3: – front-end fabrication of integrated circuits and other semiconductors

AddedAnnex II – point 3 – point a – indent 4: – assembly, testing and packaging of integrated circuits and other semiconductors, including advanced printed circuit boards and packaging

AddedAnnex II – point 3 – point a – indent 4 a (new): – semiconductor manufacturing equipment, both for the front-end and back-end fabrication of integrated circuits and other semiconductors, including etching, deposition, epitaxy, lithography, advanced packaging, testing or metrology tools

AddedAnnex II – point 3 – point a – indent 4 b (new): – core components or software of semiconductor manufacturing equipment

AddedAnnex II – point 3 – point a – indent 4 c (new): – materials used in the fabrication of integrated circuits and other semiconductors, in particular specialty chemicals, rare gases, semiconductor materials, substrates or wafers

AddedAnnex II – point 3 – point a – indent 4 d (new): – data storage and processing equipment and facilities

AddedAnnex II – point 3 – point b – introductory part: b. Artificial intelligence technologies, meaning any technology or know-how related to a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments (‘AI system’), used for the following applications:

AddedAnnex II – point 3 – point b – indent 1: – generative AI systems trained using more than 10^25 FLOPS (floating point operations)

AddedAnnex II – point 3 – point b – indent 2: – generative AI systems trained in a significant part on biological/ genomic data, or designed to be used in a biotechnological, space or defence context

AddedAnnex II – point 3 – point b – indent 3: deleted

AddedAnnex II – point 3 – point b – indent 4: deleted

AddedAnnex II – point 3 – point e – indent 1: – Secure digital communications and connectivity, such as RAN & Open RAN (Radio Access Network), 5G and 6G, laser and light communication

AddedAnnex II – point 3 – point e – indent 2: – Cyber security technologies incl. cyber-surveillance, encryption, security and intrusion prevention and detection systems, digital forensics

AddedAnnex II – point 3 – point e – indent 5 a (new): – Submarine fibre-optic cables