The EU-US Trade and Technology Council (“TCC“), set up at the June 2021 EU-US Summit, held its first meeting on 29 September 2021 in Pittsburgh, USA. The objectives of the TCC are to “coordinate approaches to key global technology, economic, and trade issues; and to deepen transatlantic trade and economic relations, basing policies on shared democratic values”.
The TCC Inaugural Joint Statement (the “Joint Statement“) discusses outcomes in respect of five key areas including export controls, foreign direct investment screening, enhancing supply chain security (focusing on semiconductors), artificial intelligence technologies and global trade challenges. 10 working groups have been established to address the future scope of work.
The Joint Statement noted that “openness to foreign investment is essential for economic growth and innovation”. The TCC will continue investment screening to manage risks to national security (and within the EU, public order) and the regimes will include appropriate enforcement mechanisms. The TCC also acknowledged that the investment screening regimes should be “guided by the principles of non-discrimination, transparency of policies and predictability of outcomes, proportionality of measures, and accountability of implementing authorities”, as set out in the Guidelines for Recipient Country Investment Policies Relating to National Security, adopted by the OECD Council in May 2009.
Working group 8 has been set up to focus on investment screening. The aim of the working group is to:
- exchange information on:
- investment trends affecting security. This includes “strategic trends with respect to industries concerned, origin of investments, and types of transactions”; and
- best practices, “including risk analysis and the systems for risk mitigation measures with a focus on sensitive technologies and related sensitive data”
- discuss policy tools dealing with risks regarding specific sensitive technologies
- carry out a joint virtual stakeholder outreach event
- engage with global partners
For more information, see here.
The working group will enable cooperation between the EU and US to share their experiences and best practices in this area. It complements the already existing October 2020 EU framework in respect of investment screening, which promotes cooperation between the Commission and Member States.
Further, when passing legislative reforms to the authorizing legislation for the Committee on Foreign Investment in the United States (“CFIUS“) in 2018, Congress directed the Committee to coordinate with allied governments on foreign investment review regulation. On the United States side, CFIUS has over decades developed analytical tools, information on security vulnerabilities associated with particular businesses, information of threats posed by particular foreign investors, and highly detailed security risk mitigation measures. In light of that extensive experience, one may expect CFIUS agencies to share their insights and seek greater alignment in foreign investment review approaches.