According to the draft proposal, the European Commission will ask the member states to put in place screening mechanisms and will widen the scope of existing rules to include investments made by companies that are either directly or indirectly controlled by foreign entities and could impact public order and security.

The draft proposal would also introduce the novelty of screening greenfield investments, which is when the foreign investor or a foreign investor’s subsidiary in the EU sets up new facilities or a new undertaking inside the bloc, essentially building production facilities from scratch.

This is expected to have a major impact on investements in key industries such as solar and wind technologies and electric vehicles (EV), as well as semiconductor investments made by non-EU investors. Those are often linked especially to concerns about Chinese investment in those sectors.