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Trade and security: Commission highlights work to defend EU interests and values

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The European Commission is presenting key findings related to defending EU interests when it comes to export controls and foreign investments in the EU. The Commission screened 400 foreign investments since the new Foreign Direct Investment (FDI) screening legislation entered into force. While only in place since a year, there has been an impressive take-up of this mechanism, meaning that EU interests will be better protected going forward. At the same time, over 30,000 requests for the export of goods with potential military use were reviewed by Member States under the EU Export Control regime, with 603 of these exports blocked. These are some of the highlights announced at the occasion of publication of the first reports on FDI screening and on export controls.

Executive Vice President and Trade Commissioner Valdis Dombrovskis said: “The EU remains open to trade and foreign investment – this is a pillar of our job creation and economic growth. But our openness is not unconditional and it needs to be balanced by appropriate tools to safeguard our security and public order. Foreign investment screening and control of exports of dual use goods help keep the EU safe, while protecting human rights. They are key elements of our open, sustainable, and assertive trade policy. These two reports highlight how these tools can help the Commission and competent Member State authorities to act decisively when the situation demands, defending our interests while promoting our values.”

FDI Screening

This report on FDI screening is the first to be published since the new EU FDI screening regulation came into force a year ago. Under this regulation, member states and the Commission work closely together to ensure that any foreign direct investment which can pose a security risk to EU member states or EU critical assets is effectively screened.

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In terms of key findings, the report highlights:

  • The Commission screened 265 transactions notified by member states under the report until end of June 2021 (now the teller is above 400);
  • 80% of the transactions did not justify further investigation and were thus assessed by the Commission in just 15 days;
  • most notifications for screening from Member States concerned the manufacturing sector, ICT, wholesale and retail;
  • the top five countries of origin of investors among notified FDI cases were companies located in: the United States, the United Kingdom, China, Canada and the United Arab Emirates, and;
  • the Commission issued an opinion in less than 3% out of 265 screened cases.

The report confirms that the EU remains open for foreign investment, while ensuring the protection of EU security and public order. The FDI screening cooperation mechanism works effectively and does not create unnecessary delays for transactions. A growing number of member states have adopted their own screening mechanism – 18 now have a mechanism in place.  The European Commission expects all member states to adopt national screening mechanisms. This will further enhance the effectiveness of the screening system and ensure a comprehensive EU approach to tackle risks related to security or public order.

Export Controls

This is the last report on export controls before the entry into force of the upgraded Export Controls Regulation.

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The report shows that dual-use exports represent about 2.3% of total EU exports. Out of a total number of 30.292 applications for and notifications of exports under licences, 603 transactions (exports) were denied (in 2019) representing about 0.02% of total exports. This would put the value of dual-use trade at €119 billion in 2019.

The new Regulation that entered into force on 9 September this year strengthens export controls further by:

  • Introducing a novel ‘human security' dimension in order to capture emerging dual-use technologies – especially cyber-surveillance tools;
  • simplifying procedures and making the export control system more agile and able to evolve and adjust to circumstances;
  • developing an EU capacity-building and training programme for member states' licensing and enforcement authorities;
  • co-ordinating and supporting robust enforcement of controls, and;
  • setting up dialogues with third countries so as to enhance global security and promoting a level playing field at global level.

Memorandum on Dual Use Controls 9 September 2021.

Background

FDI screening and export controls are part of the EU's renewed trade strategy, that seeks to enforce EU rights and defend its values more assertively. Other initiatives and actions under this strategy include:

  • A proposal on an International Procurement Instrument to help ensure a level playing field in the global procurement market. This is currently with the European Parliament and Council.
  • A legislative proposal for a new anti-coercion instrument due in December 2021 that will allow the EU to respond to attempts by other countries to force the EU or its countries to bring about policy changes.
  • A new tool currently prepared by the Commission, designed to tackle effectively foreign subsidies that cause distortions and harm the level playing field in the Single Market in any market situation.
  • A new ‘Access to Markets' portal launched in October 2020, providing easily accessible and multilingual information to help businesses of all sizes to make the most of EU trade agreements .
  • A Single Entry Point established in November 2020, making it quick and easy for any EU-based stakeholder to lodge complaints about non-compliance by third countries with their international trade commitments vis-à-vis the EU.
  • A more systematic use of the institutional structures established by EU trade agreements to ensure effective implementation of commitments by third countries and the resolution of market access barriers.
  • A more active use of dispute resolution mechanisms to enforce our rights.
  • Continued mobilisation of civil society representatives in the implementation of EU trade agreements and arrangements, notably on trade and sustainable development.

More Information

Report on the screening of foreign direct investments into the Union

Accompanying document to FDI report

Report on the control of exports, brokering, technical assistance, transit and transfer of dual-use items

Factsheet

Brochure

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China

Competition: EU and China meet during 22nd Competition Week to discuss competition policy priorities

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Officials and experts from the EU and China will meet online from 29 November to 2 December 2021 to discuss about their co-operation on competition law and enforcement. The discussions will focus on the green transition and how China's Fair Competition Review System and the EU's State Aid framework can contribute to it. Participants will also discuss mechanisms to control potentially anti-competitive acquisitions in the digital sector and the practical challenges of investigating digital markets. In addition, there will be updates on the proposed revisions to China's Anti-Monopoly Law and recent regulatory and competition policy developments in the EU.

The 22nd EU-China Competition Week follows the longstanding tradition of biannual competition dialogue between the EU and the anti-monopoly enforcement agencies in China. It is part of the Competition Co-operation project, a five-year EU funded programme offering technical co-operation to competition authorities in Asia. It also provides a platform for exchanges on competition policy between the European Commission Directorate-General for Competition (DG Competition) and the Chinese State Administration for Market Regulation (SAMR). The objective is to exchange experiences and strengthen convergence in competition policy, to the benefit of citizens and businesses in both the EU and in Asia. More information about the European Commission's bilateral dialogue with China in the field of competition policy is available on the Commission's website.

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Commission hosts second matchmaking event to speed up the development and production of COVID-19 medicines

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Today (30 November), the Commission is hosting a pan-European matchmaking event to accelerate and upscale the development and production of COVID-19 medicines in Europe, as part of the actions under the EU Strategy on COVID-19 Therapeutics. Following a first matchmaking event on COVID-19 medicines in July 2021 and a previous matchmaking event on COVID-19 vaccines in March 2021, this event aims at strengthening the participation of EU companies in value chains for COVID-19 therapeutics and speeding up connections among the participants. It also broadens the focus: from therapeutics specifically used to treat COVID-19, to also including those used to treat the symptoms of COVID-19, as well the production of disposable materials, such as syringes, and ingredients needed for making such medicines.

The event gathers companies from the European Economic Area as well as other businesses and organisations included in the portfolio of 10 most promising treatments, presented by the Commission in the follow-up to the COVID-19 Therapeutics strategy. In order to facilitate matchmaking events, the Commission issued a comfort letter in March 2021 (based on the Antitrust Temporary Framework adopted by the Commission on 8 April 2020) providing guidance, relevant also for this event, on how the matchmaking and exchanges between participating companies, including direct competitors, can take place in compliance with EU competition rules. The matchmaking event is organised by the Commission's Task Force for industrial scale-up of COVID-19 vaccines and therapeutics, in close co-operation with the European Cluster Collaboration Platform. The event is also hosted in partnership with the Council of European BioRegions (CEBR) and the European Cluster Alliance (ECA), which are supporting the Commission in running an EU survey to assess EU capacities for COVID-19 therapeutics production. More information about the event is available here.

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European Commission

President von der Leyen addresses the special session of the World Health Assembly of the WHO

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On 29 November, Commission President Ursula von der Leyen (pictured) addressedthe World Health Assembly of the World Health Organization (WHO), which gathers between 29 November and 1 December for its second-ever special session. The President welcomed the Assembly's decision to start negotiations towards an international instrument to strengthen pandemic prevention, preparedness and response. Following the emergence of the Omicron variant, President von der Leyen commended the leadership of South Africa's President Cyril Ramaphosa, underlining that South Africa's analytical work and transparency have allowed a swift global response to save lives. She praised South Africa as an example of international cooperation in times of cross-border health threats.

Building on the Global Health Summit of May and on the G20 Summit last month, President von der Leyen reaffirmed the EU's commitment to uphold equity, good governance, multilateral cooperation and solidarity as the only ways out of the current health crisis. The European Union and its Member States will continue working to help achieve the global vaccination target of 70% in 2022 and will support capacity building for sequencing, testing, treatments and vaccination. In this sense, the President confirmed that the EU aims at sharing at least 700 million vaccine doses by mid-2022 with low and middle-income countries. That is on top of the €3 billion in financing that the EU provided to help create the ACT-Accelerator for global vaccination through COVAX and the ongoing efforts to develop vaccine manufacturing in Africa and in South America. The full speech is available here and can be re-watched here.

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