Eu Commissioner For Interinstitutional Relations And Transparency Maroš Šefčovič Said He “strongly Encourage All Eu Member States To Pursue These Recommendations, Which Will Help Us All In The Long Run.” Credits: Thierry Monasse/gettyimages

The European Commission, the executive arm of the European Union (EU), is calling on bloc members to review outbound investments to non-EU countries in sectors of “strategic importance” and “highest risk.” These include semiconductors, artificial intelligence (AI) and quantum technologies. The news follows a flurry of restrictions on the semiconductor sector that US President Joe Biden has passed in his last few weeks in office mainly aimed at limiting exports to China.

The EU says its goal is to secure the bloc’s economic security by “ensuring that key technologies and know-how do not fall into the wrong hands.” While it did not specify which bad actors it was referring to, the EU is presumably following the US’s lead in trying to limit China’s semiconductor development and encourage domestic industries.

The suggestion comes after an EU White Paper found that “member states do not systematically review and assess outbound investments for security purposes” and recommended a three-stage review approach. The research happened alongside ongoing EU work regarding inward FDI screening.

“The EU is and will remain among the leaders of both providing and attracting world-class investment. However, the geopolitics of today means that we must have a deeper understanding of the potential risks it may entail. The assessment of EU outbound investment in key technology areas will allow us to have a clearer picture of potential threats we face,” EU Commissioner for Interinstitutional Relations and Transparency Maroš Šefčovič commented.

The review will be in place for the next 15 months and covers ongoing and past transactions, dating back to 1 January 2021.

While EU recommendations are non-binding, the case reflects a growing trend of strategic technology sectors developing alongside geopolitical lines.

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The EU assured that the effort will depend on “cooperation and coordination with third countries” and that they will continue to discuss the subject of outbound FDI screening with their allies.