Brussels, 24 January 2024
Good afternoon, everyone.
Over the past decades, the EU has drawn great benefit from being an export and trade powerhouse.
We trade widely. We invest a good deal abroad.
And we keep our market open for foreign investors.
The EU thrives in an open and rules-based world.
Openness is our strength.
The EU is the biggest player in global trade, exporting over €3.1 trillion in goods and services and importing €2.8 trillion.
However, at a time of such profound geopolitical turmoil and rapid technological change, we must be serious about the risks that we face.
The last few years have taught us some hard lessons about the risks of excessive dependence.
First, the COVID-19 pandemic.
Now, Russia’s protracted war against Ukraine.
To preserve the EU’s openness, we must address these risks.
This is why, last June, we presented the European economic security strategy. In essence, our approach to increase our capacity to assess risks and vulnerabilities, and to address them in a proportionate and targeted way.
We propose finding ways to remedy these vulnerabilities – by promoting, protecting and partnering. All these pillars are equally important. They cannot be seen in isolation.
It means:
- building on our strengths;
- strengthening partnerships around the world;
- staying open to trade and investment;
- but defending and protecting ourselves when we have to.
We have been working hard to put this strategy into effect.
Today, we are presenting how we are moving ahead with this work, with initiatives that relate to the ‘protect pillar’:
- foreign direct investment, or FDI screening;
- export controls;
- and outbound investment.
On FDI: based on more than three years of experience and the lessons learned, we propose the revise the existing regulation on FDI screening.
So far, it has allowed the Commission and Member States to review collectively more 1,200 FDI transactions against their potential risk to security and public order.
While the mechanism is well established, we need to address shortcomings and improve its efficiency. That means:
- making sure that all EU Member States have a screening mechanism in place with better harmonised national rules;
- and identifying minimum sectoral scope where all Member States must screen foreign investments.
With FDI, we want to focus on riskier transactions and spend less time and resource on low-risk ones.
We also want to cover intra-EU transactions where the investor is ultimately controlled by a non-EU entity.
Next, export controls.
Here, we are looking specifically at dual-use items.
By this, I mean goods, technology and know-how that can be used for both civil and military purposes.
We do not want them to get into the wrong hands and ultimately undermine EU or global security.
Today’s fraught geopolitical climate and race for new technologies mean that the EU must improve the coordination, effectiveness and efficiency of its current regime and practice.
There are several issues to address here.
The existing multilateral rules are the best way to develop robust export controls globally.
This remains at the heart of the EU technology controls.
However, despite the significant technical work that has already been done, some countries have blocked multilateral decisions on new items to control.
It creates loopholes that we cannot afford to have.
We also see a multiplication of new national controls on emerging and sensitive technologies imposed by some countries. This includes EU Member States.
And this comes outside the multilateral regimes.
It creates a risk of a patchwork of control measures within the EU, causing fragmentation of the single market.
These developments have exposed Member States to geopolitical pressures and raised questions about the adequacy of the current EU export control rules.
Are they fit for purpose? Can they effectively protect the security of the EU and its Member States?
Today, we propose options for introducing uniform EU controls on new items that were not adopted by the multilateral export control regimes because they were blocked by certain countries, notably Russia.
We also propose creating a senior level forum for the political coordination of export controls.
And by this summer, we will present a Commission Recommendation to improve the coordination of national control lists before the planned adoption of national controls.
Lastly, our evaluation of the EU dual-use regulation is advanced to 2025.
We will use this year to consult widely and prepare.
Now,moving on to outbound investments:
We acknowledge the growing concerns on regarding outbound investments in a narrow set of advanced technologies.
We do not want these to leak to those who might use them to enhance their military and intelligence capabilities and to undermine international peace and security.
At the moment, this is not controlled or monitored at EU or Member State level.
Our first step will be to build up a data and evidence base, which will be a major exercise.
We will start by holding a public consultation with Member States and other stakeholders to define its parameters.
These will include the final scope and length of the exercise, among other areas. For example, we would suggest focusing on a narrow set of sensitive technologies, such as artificial intelligence, advanced semiconductors, quantum and biotech.
The proposed length of the monitoring now stands at 12 months. In parallel, we will work on a common methodology or guidance for 27 Member States.
Once this is ready, in early summer, we would move to monitoring and risk assessment to arrive at a joint risk assessment. This will allow us to establish whether any measures or action might be needed.
Thank you.