On September 22, a draft law "On the Screening of Foreign Direct Investments" was registered in the Parliament. Does Ukraine need it?
Investment screening is the process of verifying foreign investments to ensure they are made with transparent economic intentions, do not exert corrosive influence on political processes, do not contribute to the outflow of critical technologies or materials from Ukraine, do not pose a threat to critical infrastructure, and are not aimed at undermining Ukraine’s national security.
How is it done in Europe? EU Regulation No. 2019/452 stipulates that EU Member States may establish mechanisms for screening foreign direct investments on their territory on the grounds of security. Each country can define the specifics of such mechanisms independently, including the circumstances that trigger investment screening, the grounds and procedures for such screening, and ways to consider comments from other Member States and the European Commission.
It is important that investment screening not only protects Ukraine from corrosive capital, but also does not discourage bona fide investors with excessive bureaucracy. Screening should not be all-encompassing — it should only apply to investments that may pose significant risks to national security.
Volodymyr Landa, Head of Investment Screening at the Economic Security Council of Ukraine (ESCU)
