Updated investment-screening regime on way
EU member states have adopted an updated screening regime for foreign investments into the union.
Under the new rules, foreign investments in “sensitive” sectors such as defence, semiconductors, artificial intelligence, critical raw materials, and financial services will be subject to mandatory screening by member states.
The updated framework also includes harmonised national rules to ensure consistent screening across the EU, as well as a common minimum scope for deals.
Transactions within EU
The new law will also cover transactions within the EU where the investor is ultimately owned by individuals or entities from a non-EU country.
The updated regulation will be published in the EU’s official journal and enter into force 20 days after publication. The new rules will then start applying 18 months later.
The current regulation, in force since October 2020, created an EU-wide framework aimed at addressing potential threats to “security and public order” posed by some investments from third countries.
Ireland’s annual report
The EU Council’s adoption of the updated rules follows the first annual report on Ireland’s regime, published by Department of Enterprise, Tourism and Employment late last month.
The report showed that 102 notifications were submitted to the department in 2025, with 66 not formally screened as they were found not to have met all the criteria for mandatory notification.
A total of 26 screening notices were issued, 18 of which involved targeted entities related to or affecting critical infrastructure.
Of the 26 screening notices issued, two were approved subject to conditions to ensure that contractual arrangements relating to the provision of critical services by the target company were maintained. No transactions were prohibited.
Pinsent Masons competition expert Ciarán Campbell noted that almost two-thirds of notifications did not proceed to the formal screening stage.
“This signals that parties are taking a precautionary approach to notification in circumstances where the scope of the regime is relatively broad and there are notable penalties for non-compliance – at a maximum, a €4 million fine,” he stated.