REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Third Annual Report on the screening of foreign direct investments into the Union
Date: 2023-10-19
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: EU Member State, activity report, direct investment, financial control, foreign capital, foreign investment, investment policy, third country

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.10.2023  COM(2023) 590 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Third Annual Report on the screening of foreign direct investments into the Union {SWD(2023) 329 final}  
 
 
INTRODUCTION  

This Report is the third Annual Report by the European Commission on the application of the EU 
Foreign Direct Investment (FDI) Screening Regulation1 (the “FDI Screening Regulation”, or the 
“Regulation”).  

The Report covers the year 2022 and provides transparency around the operation of FDI screening 
in the EU, and developments in national screening mechanisms. It contributes to the accountability 
of  the  Union  in  an  area  where,  given  the  security  interests  at  stake,  transparency  regarding 
individual transactions is neither possible nor appropriate.  

It is based on reports by the 27 Member States and other sources and consists of four chapters: 

•  Chapter 1 on trends and figures for FDI into the EU;  
•  Chapter 2 on legislative developments in Member States;  
•  Chapter 3 on FDI screening activities by Member States;  
•  Chapter 4 on the EU cooperation mechanism on FDI screening. 

This  Annual  Report  is  an  important  tool  for  strategic  trade  and  investment  controls  to  ensure 
security and public order in the European Union.  

1 Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework 
for the screening of foreign direct investments into the Union (OJ L 79I , 21.3.2019, p. 1). 

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CHAPTER 1 – FOREIGN DIRECT INVESTMENTS INTO THE EUROPEAN UNION – 
TRENDS AND FIGURES 

1.  Overall evolution 

In 2022, the global FDI totalled EUR 1.2 trillion (Figure 1) and were 34% above the 2020 levels, 
after a robust post-COVID growth in 20212. Yet, it displayed a year-on-year decrease of -14.3% 
compared to 2021. 

The  EU27  contributed  to  this  global  decrease  in  2022,  with  EUR  -140  billion  of  inward  FDI, 
compared  to  the  EUR  +142  billion  recorded  for  2021.  The  EU27  result  is  primarily  driven  by 
decreases of inward FDI in Luxembourg3. Besides the EU27 (-199% compared to 2021), declines 
in FDI flows in 2022 were also observed for other important recipients, such as the US (-12%) and 
China (-41%). 

Figure 1: World and EU27 inward FDI flows4 

Source: OECD data, extracted on 03/05/2023. Data refers to inward FDI flows. 

2 Pitchbook, Global M&A report 2022, January 2023 
3 OECD, FDI IN FIGURES, April 2023 – https://www.oecd.org/corporate/mne/statistics.htm 
4 The data provided here has been revised by the OECD for the past years. Thus, it differs from the data displayed in 
the second annual report on FDI screening. 

2 

 
 
 
 
 
 
 
 
However,  the  cumulated  number  of  foreign  transactions5  into  the  EU27  displays  an  increasing 
trend between 2015 and 2022 (Figure 2). The average yearly number of foreign acquisitions and 
greenfield investments into the EU27 in this period were about 2 200 and 3 200, respectively. The 
positive trend confirms the openness of EU Member States to foreign investments.  

Figure 2: 2015-2022 yearly cumulative number of foreign transactions into the EU27 

Source: JRC elaboration based on Bureau van Dijk data, extracted on 06/02/2023 (Zephyr) and on 02/02/2023 (Orbis Crossborder Investment). 
Data for 2015 corresponds to the flows of FDI in 2015, while data for the subsequent years correspond to the cumulated sum of yearly flows.   

There was a fall in deal making, especially in the second half of 2022, resulting from the economic 
slowdown and rising cost of financing due to higher interest rates, decided by the main central 
banks to keep inflation at bay. The weakening of the confidence in global markets had some main 
contributing factors. Inflationary trends, worsened by Russia’s war of aggression against Ukraine, 
and the resulting pressure on energy and commodity prices, together with generalised supply chain 
disruptions, induced a prudent approach of investors waiting for more favourable conditions. 

5  Foreign  direct  investment  can  take  two  different  forms:  greenfield,  and  mergers  and  acquisitions  (M&As). 
International greenfield investments typically involve the creation of a new company or establishment of facilities 
abroad, while an international merger or acquisition amounts to transferring the ownership of existing assets relating 
to an economic activity to an owner abroad. 

3 

 
 
 
 
 
 
 
2.  Top Origin Countries of Foreign Investors 

A comparison between 2021 and 2022 transactions data by foreign jurisdiction of origin shows 
differing patterns regarding the relative importance of each between acquisitions and greenfield 
investments (Figure 3).  

Figure 3: Number of foreign acquisitions* (left) and greenfield investments (right) in 2022 and 
2021 – Detail by foreign jurisdiction (top ten investors into EU27) 

Source: JRC elaboration based on Bureau van Dijk data, extracted on 06/02/2023 (Zephyr) and on 02/02/2023  (Orbis Crossborder Investment). 
OFCs: Offshore Financial Centres (see footnote 1). RoW: Rest of the World. (*) Acquisitions of equity stakes above 10% of the capital of the EU27 
business. 

The US remained the top foreign investor in 2022, accounting for 32.2% of all foreign acquisitions 
and 46.5% of all greenfield investments, followed by the UK accounting for 25.1% and 19% of 
acquisitions  and  greenfield  investments,  respectively.  The  UK  remained  the  second  source  of 
investment  despite  a  decline  in  both  the  number  of  acquisitions  (-17.1%)  and  greenfield 
investments (-8.9%) in 2022 compared to 2021.  

However, some differences emerge between the two types of FDI: for greenfield investments, the 
US experienced a 13.7% year-on-year increase in 2022. The Offshore Financial Centres6 (OFCs), 
the  third  most  important  origin  jurisdiction  for  greenfield  investments,  also  experienced  an 
increase in 2022 compared to 2021 (+8.5%).  

In 2022, the OFCs replaced China as the third most important jurisdiction of origin of greenfield 
investments. In fact, greenfield investments into the EU27 originating from China diminished and 
China was fifth, with a share of 3.9% down from 5.9% in 2021. 

6 The main offshores by number of M&As or Greenfields are (in alphabetical order): Bermuda, British Virgins Islands, 
Cayman Islands, Mauritius and the United Kingdom Channel Islands. For the full list of Offshore Financial Centres, 
see e.g., Commission Staff Working Document - Following up on the Commission Communication “Welcoming 
Foreign Direct Investment while Protecting Essential Interests” – SWD(2019) 108 final – 13 March 2019. 

4 

 
 
 
 
 
 
 
3.  Other Origin Countries of Acquisitions and Greenfield Investments 

Other  origin  jurisdictions  which  experienced  a  decline  in  number  of  greenfield  investments 
between  2021  and  2022  are  Switzerland  (-15.5%,  which  represents  the  second  largest  drop  in 
number  of  greenfield  investments  after  China),  Japan  (-11.8%)  and  Canada  (-2%).  For 
acquisitions, OFCs (-43.2%) and Canada (-41.6%) experienced a sharp decrease in numbers in the 
same two years. Conversely, other jurisdictions which experienced an increase in the number of 
greenfield investments in 2022 are Norway (6.9%), India (9.1%) and South Africa (118.8%). For 
acquisitions, Japan (23.9%) and India (107.1%) registered a robust growth in investments in the 
EU in 2022.  

4.  Top Destinations of Foreign Acquisitions and Greenfield Investments 

The number of foreign transactions by target EU27 country records a generalised decline in 2022 
compared to 2021 (Figure 4).  

Germany, with a share of 17.2% of all acquisitions, remained the first destination of foreign direct 
investments  in  2022.  Spain,  despite  a  -17.5%  decrease  in  the  number  of  acquisitions  in  2022 
compared to 2021, retained the second place with a 13.5% share. Italy, France and the Netherlands 
followed,  with  shares  of  foreign  transactions  of  10.6%,  10.2%  and  10%,  respectively.  Most 
destination countries experienced a decline in the number of acquisitions, ranging from -3.2% in 
Denmark to -20% in Belgium. The only two exceptions were Sweden and Portugal, with a 1.3% 
and 30.6% growth in 2022, respectively.  

As regards greenfield investments,  Spain was in 2022 the number one destination in the EU27 
(representing a 17.2% share of the total number of greenfield investments in 2022) followed by 
France and Germany with 14% and 11.4% respectively of greenfield investments in 2022. 

France  experienced  an  increase  in  2022  of  the  number  of  greenfield  investments  received 
compared to 2021 (+20.4%), while for Spain and Germany there was a decline of 13.8% and 6.5%, 
respectively. Of note is that the Netherlands and Ireland saw an increase in greenfield investments 
by  25%  and  25.7%,  respectively.  Romania  and  Poland,  however,  saw  considerable  drops  in 
greenfield investments with -24.7%, and -15.6%, as compared to 2021. 

5 

 
 
 
 
Figure 4: Number of foreign acquisitions* (left) and greenfield investments (right) in 2022 and 
2021 – Detail by destination Member State (top ten EU27 destination Member States) 

Source: JRC elaboration based on Bureau van Dijk data, extracted on 06/02/2023 (Zephyr) and on 02/02/2023 (Orbis Crossborder Investment). 
RoEU stands for Rest of EU27. (*) Acquisitions of equity stakes above 10% of the capital of the EU27 business. 

5.  Sector Specific Information 

A  closer  look  to  the  evolution  between  2021  and  2022  of  foreign  acquisitions  and  greenfield 
investments by sector7 into the EU27 shows mixed trends (Figure 5). The five main sectors saw a 
decrease in the number of acquisitions, while greenfield investments saw increases in all but one 
(manufacturing) sector. 

Figure 5: Number of equity stakes* (left) and greenfield investments (right) in 2022 and 2021 – 
Detail by NACE Rev. 2.1 sectors (top five categories) 

7  The  sectors  used  to  categorise  are  the  NACE  [Nomenclature  of  Economic  Activities]  Rev.  2.1,  see: 
https://showvoc.op.europa.eu/#/datasets/ESTAT_Statistical_Classification_of_Economic_Activities_in_the_Europe
an_Community_Rev._2.1._%28NACE_2.1%29/data.  

6 

 
 
 
 
 
 
 
Source: JRC elaboration based on Bureau van Dijk data, extracted on 06/02/2023 (Zephyr) and on 02/02/2023 (Orbis Crossborder  Investment). 
PST stands for professional, scientific and technical activities (NACE Rev. 2, section M), it contains among other things R&D facilities. ICT stands 
for Information and Communication (NACE Rev. 2, section J). (*) Acquisitions of equity stakes above 10% of the capital of the EU27 business. 

The overall number of acquisitions in the ICT sector declined by 18.6% in 2022 compared to 2021. 
ICT  was  the  sector  receiving  the  highest  share  of  investments  in  acquisitions  in  2022  (28%). 
Moreover, ICT grouped 19.4% of new greenfield investments in 2022, ranking second after Retail: 
ICT experienced a 17.6% growth in the number of greenfield investments in 2022 compared to 
2021. 

Manufacturing was the second most important sector in 2022 in terms of the share of acquisitions 
(24.7%),  but  only  fifth  in  terms  of  the  share  of  greenfield  investments  (10.4%).  This  sector 
experienced a decline in the number of both acquisitions (-17.9%) and greenfield investments (-
13.1%) in 2022, when compared to 2021.  

The largest year-on-year increase in number of greenfield investments was observed in the Finance 
and in the Professional and Scientific activities sector categories, with 33.2% and 26.6% increases 
in 2022, respectively.  

Further details 
More details on the above figures are available in the accompanying Commission Staff Working 
Document, providing more information on the impact per Member State and sector, on the origin 
of  foreign  investors  in  the  EU27,  and  on  foreign  state  participation  in  foreign  investors  in  the 
EU27. 

7 

 
 
 
 
CHAPTER 2 – LEGISLATIVE DEVELOPMENTS IN MEMBER STATES IN 2022 

The EU FDI Screening Regulation and EU Member States’ FDI screening mechanisms 

In  2022,  the  European  Commission  continued  to  exchange  and  engage  with  Member  States  to 
ensure that all of them adopt, adapt and implement national FDI screening mechanisms. 

The  Commission  expects  all  27  Member  States  to  establish  a  comprehensive  national  FDI 
screening mechanism. To safeguard the Union against potentially risky foreign investments from 
third  countries,  a  comprehensive  national  screening  mechanism  in  all  Member  States  is 
indispensable. With this tool, all Member States and the European Commission would be able to 
screen relevant FDI and Member States would be able to take informed screening decisions. This 
would in turn contribute to protecting the collective security of the Member States and the Union, 
along with the security of the Internal Market. 

Furthermore,  the  European  Commission  strongly  encouraged  and  facilitated  the  alignment  of 
national  screening  mechanisms.  It  assisted  Member  States  with  technical  and  policy  guidance, 
meetings and information exchange notably on best practices. Yet, despite this regular cooperation 
and several important similarities, noticeable divergences between national screening mechanisms 
remained,  as  highlighted  in  an  evaluation  study  of  the  FDI  Screening  Regulation  published  in 
20228. These discrepancies encompassed notably what constitutes a formal screening of an FDI, 
timelines, sectoral coverage and notification requirements.  

Overview of Member States’ national screening mechanisms 

Russia’s  war  of  aggression  against  Ukraine  and  uncertainties  in  relation  to  geopolitical 
developments have brought even more into focus the criticality of key industries such as energy, 
space, defence including key technologies. Consequently, many EU Member States have either 
adopted new national screening mechanisms or updated and expanded existing ones in reaction to 
the current situation. In detail, in 2022, one Member State adopted a new screening mechanism, 
and eight Member States amended their existing ones (see table below). By the end of 2022, eight 
Member  States  had  already  initiated  consultative  or  legislative  processes  to  establish  a  new 
national  screening  mechanism.  Some  are  very  close  to  adopting  or  having  their  mechanism 
entering into force in 2023. In 2022, two thirds of all EU Member States had an FDI screening 
legislation in place.  

8  OECD  study  –  Framework  for  Screening  Foreign  Direct  Investment  into  the  EU  –  assessing  effectiveness  and 
https://www.oecd.org/investment/investment-policy/oecd-eu-fdi-screening-

10-11-2022 

- 

efficiency 
– 
assessment.pdf 

8 

 
 
 
 
 
 
 
 
 
 
 
The map below gives an overview of the legislative situation of EU Member States. 

Produced in May 2023 

Malta 

Steps initiated 
Adoption of screening mechanism ongoing 

Screening mechanism adopted/updated since 2017 

Screening mechanism adopted before 2017 

Administrative boundaries: ©EuroGeographics ©UN-FAO ©Turkstat 
Cartography: Eurostat - IMAGE, 05/2023 

eurostat 

Developments in EU Member States in 2022 – FDI screening mechanisms 

The  following  table  gives  an  overview  of  all  27  Member  States’  legislative  situation  and 
developments in 20229. 

National  FDI  screening  mechanism  in  place  (no 
update in 2022) 
National  FDI  screening  mechanism  in  place 
(updated in 2022) 
Had a consultative or legislative process expected 
to result in updates to an existing mechanism 

Czechia,  Denmark, Germany, Finland, 
Malta, Portugal, Slovenia 
Austria, France, Hungary, Italy, Latvia, 
Lithuania, Poland, Spain 
The Netherlands, Romania 

9 For more details, please see the accompanying Commission Staff Working Document on FDI screening. 

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adopted  a  new  national  FDI 
mechanism 
Had a consultative or legislative process expected 
to result in the adoption of a new mechanism 
Initiative underway 

screening 

Slovakia 

Belgium,  Croatia,  Cyprus,  Estonia, 
Greece, Ireland, Luxembourg, Sweden  
Bulgaria 

Most national legislative developments revolved around three main topics: (1) starting a legislative 
process  to  introduce  a  national  FDI  screening  mechanism,  (2)  upgrading  national  screening 
procedures and expanding covered sectors, and (3) prolonging the validity of national screening 
mechanisms. 

New Member State’s screening mechanisms 

Estonia  finalised  the  draft  of  the  Foreign  Investment  Reliability  Assessment  Act  which  was 
approved by the Government in May 2022. The legislative procedure in the Estonian Parliament 
started in June 2022 and the law was adopted in January 2023. It is expected to enter into force on 
1 September 2023. Ireland published draft legislation in 2022 to introduce a new FDI screening 
mechanism and the proposal is currently being considered by its Parliament. It is expected that the 
screening  mechanism  will  come  into  force  in  late  2023  or  early  2024.  In  Luxembourg,  the 
initiative  to  create  an  FDI  screening  mechanism,  approved  in  2021  by  the  government,  was 
reviewed  for  opinion  by  the  Council  of  State  in  2022  and  amended.  These  amendments  were 
approved in 2023. The new regime is applicable as of 1 September 2023. In Belgium, the Draft 
Cooperation  Agreement  was  reviewed  by  nine  Belgian  entities  (Federal  Parliament  and  the 
Parliaments  of  the  Federated  Entities)  and  adopted  in  2023.  The  national  Belgian  screening 
mechanism went into force on the 1 July 2023. 

In 2022, Cyprus drafted a new law for the establishment of a national FDI screening framework, 
which has to be approved by the House of Representatives in Cyprus. Bulgaria initiated steps to 
establish a screening mechanism. 

On updated national FDI screening mechanisms 

In 2022, France prolonged by one year the temporary obligation for foreign investors to notify 
investments when acquiring at least 10% of the voting rights of listed companies. Latvia adopted 
amendments in reaction to Russia’s war of aggression against Ukraine by prohibiting Belarussian 
and Russian citizens from obtaining a qualifying holding or decisive influence in a company of 
significance to national security. Italy introduced urgent measures to react to the economic and 
humanitarian  effects  of  the  crisis  triggered  by  Russia’s  war  (cybersecurity,  raw  materials, 
agricultural goods, etc.). Poland prolonged until June 2025 the temporary regulations stemming 
from the Act on the Control of Certain Investments, which notably added a list of new sectors to 
be subject to screening. 

More detailed information on the legislative developments in Member States’ national screening 
legislations can be found in the accompanying Commission Staff Working Document. Also, a list 
of national legislative updates is maintained by the European Commission on its website10. 

10 The list of screening mechanisms notified by Member States (last update: 17 August 2023) is available under: 
https://circabc.europa.eu/rest/download/7e72cdb4-65d4-4eb1-910b-bed119c45d47 

10 

 
 
 
 
 
CHAPTER 3 - MEMBER STATES’ FDI SCREENING ACTIVITIES 

The FDI Screening Regulation establishes a cooperation mechanism on FDI screening between 
the European Commission and EU Member States and amongst Member States based on exchange 
of information on transactions subject to screening at Member State level. It is always the Member 
State  in  which  the  investment  takes  place  that  decides  which  investments  to  screen,  approve, 
condition, or block. This chapter is based on – and aggregates – data provided by Member States 
on  their  screening  activities.  Based  on  aggregate  data  received  from  Member  States,  a  total  of 
1 444 requests for authorisations of acquisition made by the foreign investors11 and ex officio cases 
were handled in 2022. Not all authorisation requests resulted in a decision to screen as this largely 
depends on the Member States’ legislation and on how they classify and treat the requests12.  

Figure 6 - Member States’ FDI Screening Activity13 

Source: Member States’ reporting. 

There is a clear trend towards screening more cases formally. Indeed, out of all the authorisation 
requests  and  ex  officio  cases,  roughly  55%  of  the  cases  were  formally  screened.  This  marks  a 
significant increase in the proportion of formally screened cases compared to 2021.14 About 45%15 
of the applications were deemed ineligible or did not require formal screening. 

11 Some Member States did not report any cases under their screening legislation. Some Member States also reported 

‘consultations’ on the eligibility of the cases, which are included in this number. 

12  Member  States  have  different  screening  procedures.  So,  the  cases  reported  depend  on  the  domestic  procedures 
(scope, eligibility check upfront or later, etc.). For instance, some Member States declared cases ineligible before a 
formal  screening  procedure  is  carried  out,  while  others  first  formally  screened  cases  and  then  declared  them 
ineligible. The graphs and numbers reported in this chapter aim at accurately reflecting Member States’ screening 
activities as reported by them, regardless of their domestic system. 

13 From the total number of reported cases formally screened by Member States, cases received by one Member State 
were  subtracted  to  produce  the  data  shown  in  Figure  6.  This  is  because  that  Member  State  provided  partial 
information about cases received and did not provide information about all possible outcomes of notified cases. 

14 It was 29% in the second annual report for the whole year 2021, and 20% in the first annual report for 2020. 
15 It was 71% in the previous report. 

11 

 
 
 
  
 
The number of authorisation requests is unevenly distributed across EU Member States. However, 
a diversification of screening among EU Member States can be observed as the top four Member 
States accounted for 66% of all authorisation requests in 2022, down from 70% in 2021 and almost 
87% in the first report. 

Out  of  the  cases  formally  screened  in  2022,  and  for  which  Member  States  have  reported  a 
decision16, the overwhelming majority (86%) was authorised without conditions.  

However, 9% of the decisions involved an approval with conditions or mitigating measures (in 
2021, 23% of cases involved authorisation with conditions or mitigating measures). In these cases, 
national  screening  authorities  have  negotiated  -  or  imposed,  depending  on  the  Member  State  - 
certain  actions,  assurances,  and  commitments  from  the  investors  before  approving  the  planned 
foreign direct investment.  

Finally, national authorities ultimately blocked transactions in 1% of all decided cases, while for 
a further 4% the transaction was withdrawn by the parties. 

Figure 7 – Notified decisions on FDI cases 

Source: Member States’ reporting. 

16 One Member State reported a general figure on the number of requests for authorisation and two (partial) figures 
on outcomes. Thus, these cases were subtracted to produce the data shown in Figure 7. Moreover, some cases were 
carried over in 2023 and hence their outcome was unknown in 2022, thus, these have been subtracted too. 

12 

 
 
 
 
In summary, these findings give rise to the following remarks: 

• 

• 

• 

In  comparison  to  2021,  Member  States  have  in  2022  considered  more  requests  for 
authorisations received as sensitive given that the proportion of formally screened cases has 
increased significantly. 
In  2022,  86  %  of  transactions  where  a  decision  was  reported  to  the  Commission,  were 
authorised  by  the  relevant  Member  State  without  any  conditions;  in  2021  only  73%  of  the 
transactions were authorised without conditions. 
In 9% of the transactions the Member States imposed mitigating measures as a condition for 
the go ahead of the transactions. In 2021 the figure was higher at 23%. 

•  Only 1% of the transactions were blocked by Member States (same as in the previous year). 
This confirms that the European Union remains open to foreign direct investments and Member 
States only deny transactions that pose very serious threats to security and public order.  

13 

 
 
 
 
 
 
 
CHAPTER 4 – EU COOPERATION MECHANISM ON FDI SCREENING 

1.  Notifications and other actions taken under the FDI Screening Regulation 

a) Overview of activity in 2022 

In 2022, 17 Member States submitted a total of 423 notifications17, pursuant to Article 6 of the 
FDI Screening Regulation, compared to 13 Member States in 202118. Six Member States, namely 
Austria, Denmark, France, Germany, Italy and Spain, were responsible for more than 90% of those 
notifications. The notified transactions varied greatly in terms of sectors of the target company, 
value of the transaction and origin of the ultimate investors, among other parameters. 

The map below shows the notifications to the EU cooperation mechanism in 2022 

17 Yet, in 2022 there were cases dealt with from 19 Member States: The Commission opened ex officio cases notably 

concerning Member States with no national screening mechanism in place. 

18 See https://ec.europa.eu/transparency/documents-register/detail?ref=COM(2022)433&lang=en 

14 

 
 
 
 
 
The  map  above  indicates  the  number  of  notifications  received  in  the  framework  of  the  EU 
cooperation  mechanism  on  FDI  Screening.  In  2022,  out  of  the  eighteen  Member  States  with  a 
national screening mechanism in place, ten Member States submitted between 0-4 notifications, 
two submitted 5-9 notifications and six submitted more than 10 notifications. 

b) Main sectors of FDI into the EU (in Phase 1) 

The four sectors with the highest number of transactions in 2022 were Manufacturing19, ICT20, 
Professional Activities21, Wholesale and Retail22, thus following the same trend as in 202123. The 
first two remained the same as the ones identified in the second annual report but in a different 
order.  The  sector  Professional  Activities  took  the  third  place  (previously  it  was  Financial 
Activities24), followed by Wholesale and Retail. 

Figure 8 - Main targeted sectors overall in 202225 

Source: Member States’ notifications. 

19 Manufacturing encompasses activities by companies which are involved in the transformation of materials into new 
products.  For  example,  this  encompasses  the  manufacturing  of  electrical  equipment  and  motors,  of  industrial 
machinery and equipment, of weapons and ammunitions, of pharmaceuticals, etc. 

20 ICT stands for Information and Communication Technologies. It encompasses activities by companies providing 
essential infrastructures and tools for knowledge  creation, sharing and diffusion. For example, this encompasses 
computer programming, software publishing, data processing and hosting, wireless telecommunication activities, 
etc. 

21  Professional  activities  include  activities  by  law  and  accounting  firms,  as  well  as  consultancy  and  engineering 
activities.  For  example,  this  encompasses  activities  of  head  offices,  market  research  and  public  opinion  polling, 
consultancy, research & experimental development on biotechnology, etc. 

22 Wholesale and Retail includes activities relating to pharmaceutical goods, chemical products, electronic and telecom 

equipment and supplies, computers, computer peripheral equipment and software, metals and metal ores, etc. 

23 In the first annual report it was Manufacturing, ICT, and, Wholesale and Retail, categorised under the NACE codes 
C, J and G respectively. In the second annual report it was ICT, Manufacturing and Financial Activities, categorised 
under the NACE codes C, J and M. 

24 Financial activities encompass activities by holdings, funds or similar actors in the financial sector which aim at 
acquiring a specific (equity) stake or control in a target company. For example, this encompasses fund management 
activities, activities of holding companies, financial services, insurance activities, etc. 

25 As cases can cover several sectors (i.e. NACE codes), the total in the graph is higher than the total number of cases 
notified in 2022. The category ‘other’ encompasses all other sectors below 4%, notably: energy, water, mining, real 
estate, construction, health, etc. 

15 

 
 
 
 
c) Average value of FDI into the EU 
Looking at the transactions’ value, almost half of them (49%) had a value26 of less than EUR 500 
million (62% in the previous report). 42% of the transactions involved a value of EUR 100 million 
and more (it was 55% in the previous report). 

Figure 9 – Respective value per notified FDI transaction in 202227 

Source: Member States’ notifications. 

The notified transactions show a broad range in terms of value, with the lowest deal-value at less 
than one euro and the highest at approximately EUR 25 billion. 

d) Procedure and swiftness in closing FDI cases 

In line with the FDI Screening Regulation, FDI transactions  notified by the Member States  are 
assessed by the European Commission in two possible phases:  

All notified transactions  are assessed under Phase 1, with only a limited number proceeding to 
Phase 2. Phase 2 implies a more detailed assessment of cases that could possibly affect security or 
public order in more than one Member State, or create risks to projects or programmes of Union 
interest. Cases in Phase 2 can be concluded with an opinion of the European Commission. 

26 The value, where available, relates to the target company which may be an EU-based subsidiary of a larger corporate 

target company. It relates to the total value of the transaction. 

27 N/A includes blanks, not available/not disclosed and not applicable. 

16 

 
 
 
 
Figure 10 - Cases closed in Phases 1 and 2 - and ongoing ones 

Source: Member States’ notifications. 

Of  the  423  cases  notified  in  2022  within  the  cooperation  mechanism,  81%  were  closed  by  the 
European Commission in Phase 1. 11% proceeded to Phase 2 with additional information being 
requested from the notifying Member State. 8% of those cases were still ongoing on the cut-off 
date of this report, i.e. not yet closed in Phases 1 nor 228. 

When opening Phase 2, the European Commission requests additional information which varies, 
depending  on  the  transaction  and  detail  of  the  information  supporting  the  notification29.  The 
information  requested  may  include  one  or  several  elements  such  as:  data  on  products  and/or 
services  of  the  target  company;  possible  dual-use  classification  of  any  products  involved; 
customers, alternative suppliers and market shares; influence of the investor on the target company 
after the transaction; IP portfolio and R&D activities of the target company; additional defining 
characteristics of the investor and its strategy. This information is requested to better assess the 
criticality of the target company and/or the potential threats posed by the investor. 

e) Main sectors of FDI into the EU (in Phase 2) 

The main sectors for  Phase 2 examinations were Manufacturing and ICT. Together they accounted 
for 82% of all Phase 2 cases. The Manufacturing sector rose quite drastically from 44% in 2021 
(in previous report) to 59% in 2022. Also compared to 2021, Transport and storage is now the third 
most  examined  sector  by  the  Commission  (it  was  Financial  Activities  in  the  previous  report), 
before Wholesale and Retail. The category “Other” includes several sectors which accounted for 
less than 4% of the cases. 

28 From these cases, 72% were closed in phase 1. Thus, in total, 87% of the 2022 cases were closed in phase 1. 
29 The notification form - request for information from an investor for the purposes of notifications pursuant to Article 
6 of the Regulation, and the Frequently Asked Questions document, serve to ensure some degree of uniformity and 
a  minimum  level  of  information  about  the  transaction,  the  investor  and  the  target  company  provided  in  the 
notification under the Regulation. Both documents are available at  https://policy.trade.ec.europa.eu/enforcement-
and-protection/investment-screening_en 

17 

 
 
 
 
Figure 11 - Phase 2 main targeted sectors in 2022 cases30 

Source: Member States’ notifications. 

The top sector, Manufacturing, encompasses critical infrastructures and/or technologies. Looking 
more  closely  (Figure  12),  there  are  significant  changes  in  the  sub-sectors,  notably  Energy  and 
Aerospace (both 16%, down from respectively 21% and 20% in 2021), Defence (13%, down from 
25% in 2021), Semiconductors (9%, down from 18% in 2021) and Health (6%, same as in 2021). 
In addition, in 2022, there were more sectors above 5%: Data processing and storage as well as 
Communications  (both 10%), Transport  (7%) and Cybersecurity (6%).  This  indicates  a greater 
diversity of (sub-)sectors targeted by FDI. 

Figure 12 - Manufacturing sub-sectors in Phase 2 in 2022 cases31 

Source: Member States’ notifications 

30 As stated in footnote 25, one case can touch upon several sectors, thus the total in the graph is higher than the total 

number of cases notified in 2022. 

31 See previous footnote. 

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In 2022, a total of 11 Member States accounted for 56 Phase 2 cases32. For all Phase 2 cases, the 
average period of time for Member States to provide the requested information was 24 calendar 
days (compared to 22 in 2021), with a range from 1 to 126 days (compared to 3 to 101 calendar 
days in 2021). The FDI Regulation does not set precise timelines within which Member States 
must respond, but the timeline under the Regulation is suspended until full information is received.  

f) Origin of ultimate investors 

Of the 423 cases notified in 2022, the six main countries of origin were the USA, the UK, China, 
Japan, the Cayman Islands and Canada. Compared to 2021 , the percentage for US and UK ultimate 
investors went down from respectively 40% to 32% and  from 10% to 7.6%. Also, the share of 
China origin investors decreased, from 7% down to 5.4%. The share of investors originating in 
Japan have increased from 3% in 2021 to 5% in 2022. 
Around 40%33 of notified cases originated from countries other than the top six compared to 2021 
where the share was only 29 %. This marks a clear increase in the diversification of origin of the 
ultimate investors. This is also reflected in the fact that in 2022 the ultimate investors originated 
from 52 different countries (it was 43 in 2021). 

Figure 13 - Origin of Ultimate Investors in 2022 cases 

Source: Member States’ notifications. 

g) Multi-jurisdiction FDI and their main sector 

Of all the cases notified in 2022, 20% (compared to 28% in the second report and 29% in the first 
report) constituted multi-jurisdiction FDI transactions because they concerned (and were notified 
by) several Member States34. 

32 It was nine in the second report for 47 Phase 2 cases and six Member States for 36 Phase 2 cases in the first report. 
33 Other origin countries’ can be divided as follows: UAE (3.2%), SGP (2.6%), JEY (2%) AUS (1.8%), CHE 
(1.6%); and the remaining 28,8% is spread out all around the world. 
34  “Multi-jurisdiction  FDI  transactions”  refers  in  this  context  to  FDI  transactions  where  the  target  company  is  a 
corporate group with a presence in more than one Member States (and possibly also third countries), e.g., by way of 

19 

 
 
 
 
 
The main sectors subject of such notifications were: Manufacturing (up from 20% in the previous 
report), ICT (down from 39% in the previous report), Professional activities (new), Wholesale and 
Retail (same percentage as in the previous report) and Transport (new). 

Table – Multi-jurisdiction FDI transactions and main sectors 

Manufacturing 31% 
ICT 20% 
Professional activities 14% 
Wholesale and retail 11% 
Transport 8% 
Other 16% 

Source: Member States’ notifications 

h) Additional findings 

In  addition  to  the  analysis  of  notified  cases  by  Member  States  pursuant  to  Article  6  of  the 
Regulation  in  2022,  the  European  Commission  has  in  2022  also  made  use  of  Article  7  of  the 
Regulation.  Article  7  allows  the  European  Commission  to  screen  ex  officio  an  investment  of  a 
Member State – whether the latter has its own screening mechanism or not. As described in Article 
7(5) of the Regulation, where a Member State or the European Commission considers that an FDI 
which  is  not  undergoing  screening  is  likely  to  affect  security  or  public  order,  it  may  request 
information  from  the  Member  State  where  that  FDI  is  planned  or  has  been  completed.  This 
information would enable other Member States to possibly provide comments and/or the European 
Commission to issue an opinion. 

The  European  Commission  has  under  the  Regulation  the  possibility  to  adopt  opinions  on  FDI 
transactions notified by Member States. However, such opinions remain confidential pursuant to 
Article 10 of the Regulation and no information is provided on individual opinions in this report. 
Opinions have been issued in less than 3% of the cases notified by Member States under the EU 
cooperation mechanism and are issued only when and if required by the circumstances of a case, 
more specifically the risk profile presented by the investor and the criticality of a target company. 
When an opinion is issued, any recommended mitigating measures are proportionate and specific 
to the risks and criticality identified. European Commission’s opinions may also consist of sharing 
relevant information with a screening Member State, and may also suggest potential mitigating 
measures to address identified risks. It is ultimately for the Member State where the investment 
takes place  to decide on the transaction,  while it shall give due  consideration to  any  European 
Commission opinion. Opinions relating to projects and programmes of Union interest are shared 
with all Member States. 

Member States participated actively in the EU cooperation mechanism by sending comments to 
the notifying Member States: nine Member States sent comments concerning around 7% of the 
notified cases. 

subsidiaries in more than one Member State. Depending on the circumstances, and the particularities of the screening 
mechanism of the relevant Member States such deals are notified by more than one Member State, albeit rarely 
in a coordinated and synchronised manner. 

20 

 
 
 
 
The  data  above  leads  to  similar  but  distinct  key  conclusions  as  the  ones  drawn  for  the 
previous report for 2021. 

a) Similar findings 

First, the processing of cases through the EU cooperation mechanism continues to function very 
well. Of the 423 cases notified in 2022, the vast majority (81%35) were closed in Phase 1, i.e. very 
quickly, with only 11% of the notified cases closed in Phase 2 (same as in the previous report), 
and less than 3% of cases resulting in European Commission’s opinions. 

Second,  there  is  a  continuous  trend  towards  more  diversification  of  screening  among  Member 
States. Yet, there are some Member States contributing with more cases: i.e. four Member States 
accounted for 66% of all applications received under the EU cooperation mechanism in 2022 (it 
was 70% in the second annual report and 86.5% in the first one). 

Third, while most cases are assessed rapidly in Phase 1, within the prescribed 15 calendar days, 
the  duration  of  cases  entering  Phase  2  shows  significant  variation  given  the  time  needed  by 
Member  States  to  provide  answers  to  a  Commission’s  request  for  additional  information,  with 
them often depending on the investor for the requested information. 

b) Distinct findings 

Fourth,  the  main  sectors  of  interest  to  foreign  investors  (Manufacturing,  ICT,  Professional 
activities,  Wholesale  and  Retail,  Financial  activities,  Transport)  changed  somewhat  with 
Manufacturing being now the first one (instead of ICT in 2021) and Professional Activities taking 
the third place (previously it was Financial Activities). But there were more (sub-)sectors targeted 
by FDI in 2022, under the category Manufacturing. 

Fifth,  the  origin  of  the  ultimate  investor  (USA,  UK,  China,  Japan,  Cayman  Islands,  Canada) 
involved in cases notified under the Regulation remains approximately stable although the share 
of the  US,  UK and China decreasing  somewhat  in 2022 compared to  2021, while  the share of 
Japanese investors increased. In addition, in 2022, ultimate investors originated from 52 different 
countries up from 43 in 2021. This could be an indicator that the EU further increased its openness 
to investors from more diverse countries. 

Sixth, a lower number of multi-jurisdiction FDI cases have been dealt with: 20% in 2022 compared 
to 28% in 2021. 

2.  FDI from Russia and Belarus in the context of Russia’s invasion of Ukraine  

As already stated and detailed in the previous annual report, the European Commission adopted in 
April  2022  a  Guidance36  to  Member  States  on  FDI  from  Russia  and  Belarus,  to  ensure  that 
particular attention is given to investments into critical EU assets from entities or persons somehow 
related to the Russian or Belarusian governments. In 2022, Russia accounted for less than 1.4% of 
the cases notified to the European Commission and Belarus for 0.2%. 

35 See footnote 28. 
36 Communication from the Commission - Guidance to the Member States concerning foreign direct investment from 
Russia and Belarus in view of the military aggression against Ukraine and the restrictive measures laid down in 
recent Council Regulations on sanctions (OJ C 151 I, 6.4.2022, p. 1). 

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3.  Steps taken since 1 January 2022, and looking ahead 

This third report marks the further strenthening of a European policy essential for the protection 
of security and public order in the Union. In 2022, more Member States were about to establish a 
national FDI screening mechanism while others improved their frameworks. The FDI cooperation 
with partner countries, notably the US through the Trade and Technology Council (TTC) Working 
Group on FDI, allowed the EU to consolidate further the EU screening system. Almost three years 
after the entry into force of the Regulation, the EU is now a well-established active player in the 
field of FDI screening. 

The  present  report  confirms  further  the  added-value  of  the  FDI  Regulation  and  of  the  EU 
cooperation mechanism which has proven to be appreciated and efficient. 

In 2022, there were no reported leaks on notifications, opinions or other action undertaken under 
the FDI Regulation. Appropriate handling and protection of any information submitted for the 
purpose of Articles 6, 7 and 8 of the Regulation is crucial to ensure the required trust between all 
actors involved (parties to a transaction, the notifying Member State, the 26 other Member States 
and the European Commission). 

The European Commission welcomes that additional Member States are about to adopt a national 
FDI screening  mechanism  or further  strengthen  their existing  mechanisms  for potentially risky 
foreign  investments.  It  firmly  expects  that  all  Member  States  will  have  a  comprehensive 
national FDI screening mechanism in place in the near future. The Commission encourages 
Member  States  to  make  effective  use  of  their  screening  mechanim.  This  would  directly 
contribute to the shared security objective. As stated in the recently adopted Communication on 
European economic security strategy37, “Member States who have not yet implemented national 
FDI screening mechanisms should do so without further delay.”  The increase in the number of 
Member  States  with  a  national  FDI  screening  mechanism  should  logically  lead  to  more  cases 
notified  and  thus  an  intensification  of  the  use  of  the  EU  cooperation  mechanism.  Yet,  as  the 
economic environment remains uncertain, the number and nature of future notifications is hard to 
predict. 

On avenues for future developments, the European Commission had launched in 2021 a study 
on the FDI cooperation mechanism which was published in October 202238. Its objective was to 
assess  the  articulation  between  the  screenings  carried  out  by  the  national  authorities  and  the 
European Commission. It also aimed at identifying any significant efficiency or effectiveness issue 
considering  the  policy  goals  of  the  FDI  Screening  Regulation39.  The  study  contributed  to  the 

37 Joint Communication to the European Parliament, the European Council and the Council on « European economic 
security  strategy »  -  20.06.2023  –  JOIN(2023)  20  final    https://circabc.europa.eu/rest/download/a75f3fb8-74e3-
4f05-a433-fdbf406d5de6 

38  OECD  Study  “Framework  for  Screening  Foreign  Direct  Investment  into  the  EU  –  Assessing  effectiveness  and 

efficiency” - https://www.oecd.org/investment/investment-policy/oecd-eu-fdi-screening-assessment.pdf 

39 The specific objectives of the study are (i) to present an overview of the existing legislation of the Member States 
which  currently  have  a  screening  mechanism;  (ii)  review  how  the  national  legislations  and  the  FDI  Screening 
Regulation  regulate  the  interaction  between  national  authorities  and  with  the  European  Commission  within  the 
cooperation mechanism set up by the FDI Screening Regulation; (iii) identify any significant problems in the current 
system of national laws and the FDI Screening Regulation which may lead to less effective and/or less efficient 
outcomes in light of the policy goals of the FDI Screening Regulation, and, (iv) the need to keep administrative 
burden for investors and other stakeholders proportionate to the policy goals and relevant security or public order 
concerns. 

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Commission’s  reflections  on  the  need  for  a  revision  of  the  FDI  Screening  Regulation  in  2023, 
together with the experience gathered since the entry into force of this instrument. 

Indeed, since October 2020, the European Commission and Member States have reviewed more 
than 1 000 FDI transactions. In this context, a public consultation was launched on 14 June 2023 
and closed on 14 July 2023. The Communication on European economic security strategy40 of 20 
June 2023 announced that the Commission is evaluating the current framework and will propose 
a revision of the FDI Screening Regulation before the end of 2023. 

The Commission services are working to prepare this revision.   

40 See footnote 37. 

23