Technology, Investments and Screening: The Evolution of the EU’s FDI Framework

Technological competition and technology leakage concerns have become an increasingly important dimension of the EU’s geoeconomic turn, reflected in initiatives such as the Chips Act, the Critical Raw Materials Act and the European Economic Security Strategy. The EU explicitly identifies a set of critical technologies and raw material inputs considered relevant for economic security, underscoring the growing political salience of technology-related capabilities. Since the entry into force of the EU Foreign Direct Investment (FDI) Screening Regulation in 2019, foreign investments involving technology-intensive activities have appeared across Member State screening practices and EU-level reporting. Technology-related dynamics – including EU policy strategies, critical technology assessments, and selected FDI cases – all form an important part of the environment in which the EU’s FDI screening framework and practices have evolved. Understanding how these developments relate to the EU’s screening framework and national practices is important because FDI screening sits at the intersection of economic policy, technological capability and geopolitical risk. Against this backdrop, this paper examines the question: how can we explain the role of technology-related dynamics in the development of the EU’s FDI screening framework and practices in a period of shifting geopolitical conditions and the emergence of a geoeconomic order? Drawing on the concept of the geopoliticisation of trade policy, the paper highlights how trade and investment-related instruments increasingly interact with broader security considerations. Using a process-tracing approach, it analyses how technology-related issues have surfaced in screening practice and policy debate, and how these developments relate to the adjustments reflected in the Commission’s 2024 proposal to revise the Regulation. The paper contributes to understanding how the EU positions investment screening within a wider policy setting in which technology, economic security and geopolitical dynamics increasingly overlap.