B Law & Tax
15 March 2024

The new initiatives and proposal for a European regulation on the control of foreign investments to reinforce economic security in the European Union

In line with the European Economic Security Strategy published in June 2023. The five initiatives approved by the European Commission on January 24, 2024 cover the following objectives:

  • Strengthen the protection of security and public order in the EU by proposing improvements in the control of foreign investments in the region.
  • Stimulate discussions and actions to promote greater European coordination in export control, while respecting existing multilateral regimes and Member States’ prerogatives.
  • Consult with Member States and stakeholders to identify potential risks arising from overseas investments in a limited set of technologies.
  • Encourage further discussions on how to support research and development of technologies with dual-use potential.
  • Propose to the Council measures aimed at strengthening research security at national and sectoral level.

The measures adopted by the Commission are as follows:

  1. legislative proposal to strengthen the control of foreign investments:

After analyzing foreign direct investment operations over the past three years, the Commission proposes measures to strengthen the system, such as ensuring control mechanisms in all Member States, harmonizing national rules and extending EU control over European investments controlled by non-EU entities.

  1. Monitoring and risk assessment of outbound investments:

The European Union, as a major global investor, recognizes the need to maintain open markets. However, there is growing concern about certain investments in advanced technologies that could be used for military purposes or to threaten international security. Currently, these investments are not subject to adequate oversight at EU or Member State level. The Commission’s White Paper therefore proposes a thorough analysis of these investments to understand the potential risks involved. 

  1. More effective EU control of exports of dual-use items:

In today’s increasingly complex geopolitical scenario, it becomes imperative that the European Union take steps to improve coordination in the control of exports of items with civilian and defense applications, such as advanced electronics, toxins, and nuclear or missile technology, ensuring that they are not used to threaten security or human rights. Among the measures suggested is the implementation of uniform controls across the EU for those items that have not been adopted by the multilateral export control regimes, thus avoiding disparity of approaches at the national level.

  1. Options to support research and development of technologies with dual-use potential:

The presentation of the White Paper on alternatives for strengthening support for research and development (R&D) of technologies with dual-use potential marks the launch of a Commission-driven public consultation. This White Paper is part of the “promotion” dimension of the European Economic Security Strategy, with the aim of maintaining a competitive edge in the field of critical and emerging technologies that can be used for both civil and defense purposes.

  1. Enhancing research security across the EU:

The EU seeks to ensure coherence across Europe and avoid fragmented measures, working together to mitigate security risks and maintain open and secure international research cooperation. This approach follows the principle of being “as open as possible, as closed as necessary”.

Additionally, regarding the Proposal for a Regulation for the control of foreign investments in the European Union, which would replace Regulation (EU) 452/2019. This proposal, still subject to approval, establishes significant changes to the minimum requirements for foreign investment control mechanisms in all EU member states.


The Proposal, if approved as published, would have a significant impact on Spain’s current foreign investment control regime. In particular, the application procedure for the authorization of foreign investments should be adapted to, on the one hand, reflect the phases of initial review and detailed investigation of foreign investments and, on the other hand, include the possibility of initiating ex officio the review of the operation up to at least fifteen months after closing. In addition, the deadlines that the new Regulation would establish for the formulation of comments by other Member States and the issuance of opinions by the Commission for the resolution of the authorization files must be taken into account, and it cannot be ruled out that the objective scope of the subject sectors will be revised in the light of the list included in Annex II of the Proposal.

It is important to remember that the control of foreign investments does not imply a prohibition to foreign investment in Spain, but it is a mandatory process prior to the closing of certain transactions. In conclusion, given the relevance of the investment control procedure in most of the operations of purchase and sale of companies, attention should be paid to the approval of the new Regulation and to the terms in which it is approved.  

Stay informed: 

If you want to know more about the new initiatives to strengthen economic security in the European Union, don’t miss the next B LAW&TAX INSIGHTS article.

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B Law & Tax International Tax & Legal Advisors.


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