European Commission Publishes Updated Questions and Answers on EU Foreign Direct Investment Screening Regulation – A Belgian Perspective

• 16/05/2025
• News

On 14 May 2025, the European Commission (the Commission) published an updated version of its answers to frequently asked questions (the Updated FAQ) regarding Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments (FDI) into the Union (the Regulation). In the Updated FAQ, the Commission discusses developments since the last version of its FAQ published in 2021 and clarifies diverse aspects of the Regulation.

The Updated FAQ includes:

• a discussion of the Commission’s Communication providing guidance on FDI from Russia and Belarus on 6 April 2022 and its relevance for assessing FDI originating from Belarussian or Russian investors;
• a reference to the Xella judgment of the Court of Justice of the European Union (the CJEU) of 13 July 2023 and its importance for the understanding of specific concepts under the Regulation (See,  VBB on Competition Law, Volume 2023, Nos. 7 & 8, p. 9 ). For instance, based on that judgment, the FAQ explains what constitutes an FDI. In the Xella judgment, the CJEU held that investments involving an EU entity as direct investor and a non-EU entity as indirect investor do not qualify as FDI under the Regulation, provided there is no deliberate circumvention of the Regulation. However, EU Member States remain free to determine the personal scope of application of their national FDI screening mechanisms and many of them, including Belgium, cover FDI in which a non-EU entity carries out the investment through an EU entity;
• the adoption of the Directive on the resilience of critical entities of 14 December 2022 and its significance for the concept of critical infrastructure under the Regulation; and
• the 2024 publication of the Commission Communication on European Economic Security, including its evaluation of the functioning and effectiveness of the Regulation. The Communication was accompanied by the Commission’s proposal for a revised Regulation on the screening of foreign investments in the Union and repealing the Regulation (the Proposed Revised Regulation) (See, Client Alert of 14 February 2024 and VBB on Competition Law, Volume 2024, No. 2, p. 5).

In addition, the Updated FAQ clarifies the Regulation as follows:

• The Updated FAQ indicates that a private individual may qualify as a foreign investor under the Regulation if he/she is not a citizen of an EU Member State, even when that person is a long-term resident of an EU Member State. This stands in contrast with the approach adopted by several EU Member States, including Belgium, where the status of private individuals is determined on the basis of their residence in or outside of the EU.
• In addition to the existing position that the Regulation does not discriminate against specific foreign investors (implying that no third countries are “targeted” or “blacklisted”), the Updated FAQ adds that, similarly, no third countries are automatically exempted (or “whitelisted”) under the Regulation.
• The Updated FAQ states that EU Member States screening greenfield investments (involving the creation of a new business) under their FDI screening mechanisms are required to notify these under the cooperation mechanism of the Regulation, as is the case for brownfield FDI (involving the acquisition of an existing business) undergoing screening. However, most EU Member States, including Belgium, currently do not screen greenfield FDI.
• Further, the Updated FAQ mentions that both FDIs undergoing national general screening and FDIs subject to sectoral screening mechanisms should be notified under the cooperation mechanism. Conversely, FDIs only undergoing informal (pre-screening) assessments do not have to be notified under the cooperation mechanism (at least not at the informal stage). 
• The Updated FAQ also explains the impact of the cooperation mechanism on the duration of reviews under the EU Member States’ national FDI screening mechanisms. 

Finally, the Updated FAQ indicates that in the course of 2025 the Commission is likely to adopt a new Delegated Regulation governing the list of projects and programmes of Union interest under the Regulation.

Coincidentally, the publication of the Updated FAQ follows by less than a week the day on which the European Parliament (EP) adopted its amendments to the Commission’s Proposed Revised Regulation (on 8 May 2025).

The Updated FAQ is available here. The EP’s amendments to the Proposed Revised Regulation can be consulted here.