Guidance to the Member States concerning foreign direct investment from Russia and Belarus in view of the military aggression against Ukraine and the restrictive measures laid down in recent Council Regulations on sanctions

Summary:

Communication published by the European Commission on 6 April 2022, offering guidance on foreign direct investment (FDI) from Russia and Belarus in the European Union (EU) in view of the military aggression against Ukraine and the sanctions laid down by the EU.

Further information:

In response to Russia's invasion of Ukraine - supported by the Belarusian regime - the EU adopted several packages of restrictive measures against the two countries. It has also become necessary to increase vigilance towards Russian and Belarusian direct investments with the EU Single Market. This goes beyond instruments by persons or entities that are subject to sanctions. In the existing institutional framework, the responsibility of screening FDI rest with Member States. The scope of the FDI Screening Regulation is limited to cases where the acquisition of an EU entity involves direct investment by one or more entities established outside the EU. However, other investments can still be subject to national controls or screening mechanisms.

The European Commission urges the Member States to:

• systematically use their screening mechanisms to assess and prevent the threats related to Russian and Belarusian investments on grounds of security and public order;
• ensure close cooperation between national authorities competent for sanctions and those competent for the screening of investments;
• implement fully the FDI Screening Regulation;
• ensure full compliance with the requirement of the Anti-Money Laundering Directive (AMLD);
• ensure close cooperation between screening authorities, national authorities competent for sanctions and national promotional banks and institutions, as well as international financial institutions.

The Annex of this Communication also describes the conditions under which Member States may be permitted to impose restrictions on the free movement of capital and freedom of establishment.