The Community framework for the examination of foreign direct investments under the magnifying glass European Court of Auditors

This paper examines in detail the current Community framework for the screening of foreign direct investments (FDI) in the European Union, in the context of Special Report No 27/2023 published by the European Court of Auditors. This analysis is essential for understanding the dynamics and implications of foreign direct investment on national security and competition in the European Union, in light of contemporary geopolitical and economic realities. The study examines both the scope and main objectives of the European legal framework and the evolution of investment screening mechanisms in the Member States of the European Union, presents the European Court of Auditors’ organization, mission, vision and values, as well as the scope and approach to external public audit, focusing specifically on the findings and recommendations of the European Court of Auditors, critically examining how European competition authorities manage these investments and the European Commission’s responses to these challenges. By using a mixed methodology that combines the analysis of official documents with interviews and case audit, the paper provides a thorough assessment of the effectiveness and efficiency of current regulations and suggests directions for improving the European Union’s policy in this area. The results show that although the Community framework has recently been strengthened, significant adjustments are still needed to adequately address the risks associated with foreign direct investment and to balance security and economic development needs in the bloc. In conclusion, the paper recommends a prudential and coordinated approach in the review of foreign investment policies, with a particular focus on long-term implications for regional stability and international competitiveness.