15 Jan 2025
EC Recommendation calls on Member States to review outbound investments in 3 key technology areas
On 15 January 2025, the European Commission (EC) published a Recommendation calling on EU Member States to review outbound investments of their companies into non-EU countries. The Recommendation applies to three technology areas of strategic importance as well as the highest risk – semiconductors, artificial intelligence and quantum technologies – and calls on Member States to assess risks to economic security potentially arising from such transactions.
The EC states that this review of outbound investments will inform a decision on whether further action is needed – at EU and/or national levels - to address any risks identified. The Commission's ultimate objective is to prevent EU outbound investments from negatively impacting the economic security of the Union by ensuring that key technologies and know-how do not fall into the wrong hands.
The Recommendation on outbound investments builds on a White Paper and subsequent public consultation, which confirmed the need to assess potential risks to the EU's security related to outbound investments. It forms part of the EU's Economic Security Strategy, in tandem with ongoing work on inbound foreign direct investment screening, inter alia.
The Recommendation asks Member States to review, together with relevant stakeholders, outbound investments made by EU investors in the three key technologies in third countries. This review is to last 15 months and should cover both ongoing and past transactions, going back to 1 January 2021. The criteria for assessing the risk of these investments include, amongst others, "the global interconnectivity of the ecosystem of the critical technology concerned, including research activities", and "when specifically relevant to the technology areas, the participation of the company in EU projects or programmes".
Building on the work of the Commission's Expert Group on Outbound Investments, the Recommendation provides guidance to Member States on how to identify and assess potential risks posed by these transactions. Member States are asked to provide a progress report by 15 July 2025, and a comprehensive report on their implementation of this Recommendation and any risks identified by 30 June 2026.
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