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EU states asked to review overseas deals

Lawyers at Eversheds Sutherland have urged business leaders in certain sectors to prepare for requests from EU member states about their overseas investments. 

This follows a call from the European Commission earlier this week for EU states to review their companies’ outbound investments into non-EU countries. 

The recommendation covers three technology areas that the commission believes are strategically important, as well as posing the highest risk: semi-conductors, artificial intelligence, and quantum technologies. 

It calls on member states to assess risks to economic security potentially arising from such deals.

Economic security 

After the review, the commission will decide on whether further action is needed – at EU and/or national levels – to address any risks identified. 

“The commission's ultimate objective is to prevent EU outbound investments from negatively impacting the economic security of the union by ensuring that key technologies and know-how do not fall into the wrong hands,” it said in a statement. 

In a note on the firm’s website, Eversheds Sutherland says that the study will cover both ongoing and past transactions, adding that member states have been given 15 months to complete their evaluations. 

“EU investors who have engaged in outbound investments since 2021 should be prepared to receive questions about their transactions,” the firm’s lawyers state. 

‘Long way to go’ 

The commission’s request follows a white paper on the issue in 2024, after which a public consultation took place. 

Eversheds Sutherland points out, however, that the recommendation itself does not provide a basis for the commission or any member state to take any action in relation to deals that may be identified as being a risk to the EU’s security. 

“There is still a long way to go before the EU may introduce an outbound investment regime akin to those that already exist in China, Japan and the US,” they conclude.