FDI Screening Mechanisms on the Grounds of ‘Security or Public Order’ and ‘Public Policy or Public Security’

Abstract

AbstractIn this chapter the author analyzes the scope of the two broadest available screening grounds for FDI screening mechanisms in the EU: ‘security or public order’ in accordance with the Screening Regulation and ‘public policy or public security’ pursuant to Art 65(1)(b) of the Treaty on the Functioning of the EU. In particular, he argues that the screening ground ‘security or public order’ of the Screening Regulation is to be interpreted in accordance with the grounds of exception in Art XIVbis(1)(b) (essential security interests) and Art XIV(a) (public order) of the WTO’s General Agreement on Trade in Services. For his analysis, he, inter alia, develops a test to define the highly complex and dynamic concept of essential security interests. Based on the definitions of the available screening grounds, the author concludes that both grounds, ‘security or public order’ and ‘public policy or public security’, have significant limitations for the EU and Member States to meet their concerns vis-à-vis foreign investors.