The European Commission (the “Commission”) issued a White Paper on Outbound Investments (the “White Paper”) on 24 January 2024, setting out non-binding proposals for a detailed analysis of EU outbound investment. With its initiative, the Commission aims to understand whether the current limited regulation in the area of outbound investments is allowing leakage of strategic technologies and leading to potential risks to security. The conclusions of any review would inform possible EU policy responses, including whether to adopt EU-level rules regarding the screening of outbound investment to third countries. The White Paper is one of five initiatives set out in the Commission’s European Economic Security Package (the “EESP”) that aim to address the national security and public order concerns that the Commission has identified (see our Global Policy Watch blog).
In this blogpost, we discuss the key aspects of the outbound investment White Paper at the EU level. These are the main takeaways:
- The White Paper does not introduce any immediate change to legislation or create an EU- level outbound investment screening framework, but is a step towards the EU identifying whether (and what) legislation may be necessary to close perceived ‘gaps’ in regulation that permit outbound investments made by EU businesses which could lead to potential security risks.
- The White Paper envisages a joint effort by the Commission and Member States to explore the need to regulate and control outbound investment, prompted by the Commission’s perception of growing geopolitical tensions and technological shifts.
- The Commission suggests a multi-stage process to evaluate risks potentially associated with outbound investments. This process began with a consultation (following the White Paper’s publication) followed by a monitoring period. Based on the findings of both the public consultation and monitoring, the Commission will assess the need and possible content of any policy response in Autumn 2025.