EU Regulation 2019/452 and the Foreign Direct Investment Screening Regime in the Czech Republic and Slovakia

Abstract

Foreign direct investment is of paramount importance for economic development, without which capitalization and technology transfer would not be possible. However, its risks should not be overlooked, especially when investments concern economic activities that affect the national security sensitivities of states. Aware of these risks, Regulation (EU) 2019/452 of the European Parliament and of the Council aims to establish a uniform framework for national security screening of foreign direct investment. In this paper, we analyse the recently enacted and reformed foreign direct investment standards in the Czech and Slovak republics with the aforementioned Regulation in mind. We find that both states have set screening criteria that are more demanding than the common minimum set by the EU, thus strengthening state control over foreign direct investments.