The European Commission has issued a Recommendation (EU) 2025/63 of 15 January 2025 (on reviewing outbound investments in technology areas critical for the economic security of the Union) urging EU Member States to review outbound investments by their companies in non-EU countries, particularly in semiconductors, artificial intelligence, and quantum technologies—three strategic sectors posing the highest risks to economic security. The objective is to assess potential threats arising from such investments and determine whether further regulatory action at the EU or national level is necessary.
Under the Recommendation, Member States must conduct a 15-month review covering past and ongoing investments since 1 January 2021. The Commission’s Expert Group on Outbound Investments will provide guidance on risk assessment methodologies. Progress reports are due by 15 July 2025, with a final comprehensive report on implementation and identified risks required by 30 June 2026.
Summary of the EU recommendation on outbound investments and economic security
The European Commission’s recommendation, grounded in the European Economic Security Strategy, proposes a structured framework for Member States to assess outbound investments from the EU to third countries. The primary concern is technology leakage—especially involving military, intelligence, or other security-sensitive applications—facilitated by EU capital, expertise, or knowledge.
Key objectives
The aim is to collect data, evaluate risks, and inform future policy responses regarding outbound investments in critical technologies. The initiative is framed as a time-limited review exercise, intended to support the development of long-term policy tools.
Technologies in scope
Member States are advised to focus their reviews on three critical technology sectors:
- Semiconductor technologies: including design, fabrication, software, manufacturing equipment, materials, and core components
- Artificial intelligence technologies: particularly generative AI (trained with significant computing power or biological/genomic data) and AI used in biotech, space, or defence applications
- Quantum technologies: including quantum computing, communications, and sensing
Types of transactions covered
The review includes a wide range of outbound investments involving EU investors, such as:
- Acquisitions or mergers granting control or influence
- Transfer of tangible or intangible assets (e.g. IP or technical know-how)
- Greenfield investments or establishment of joint ventures
- Venture capital where the investor has relevant expertise or prior involvement in targeted sectors
- Indirect investments via third-country entities or subsidiaries
- Any investment designed to bypass existing controls
Excluded from the scope are non-controlling financial investments and standard financial services like lending or payment processing. Transactions from 1 January 2021 onward are included, and earlier ones may also be reviewed if of concern.
Geographical coverage
The approach is country-neutral. Member States are not to exclude countries a priori, but may prioritize based on coordinated risk profiles.
Requirements for Member States
By 15 March 2025, Member States must:
- Establish a review mechanism (mandatory or voluntary)
- Collect detailed information on transactions, including technology involved, parties, value, timing, and prior related deals
- Perform qualitative risk assessments, supported by the Commission, using a methodology that considers context, tech maturity, supply chains, and global ecosystem
- Consult stakeholders such as industry, academia, and civil society
- Appoint a single contact point and national authorities responsible for the review
- Share progress within the Expert Group and provide a mid-year update by 15 July 2025
- Submit a final implementation report to the Commission and other Member States by 30 June 2026
Collected data must be protected appropriately and classified where necessary.
Role of the Commission and the Expert Group
The Commission and the Expert Group (composed of Member State experts) will coordinate risk assessments, develop a shared methodology, and guide information exchange. These efforts aim to build a common understanding of economic security risks and inform potential future EU-level mitigation measures.
In essence, the recommendation seeks to strengthen the EU’s strategic autonomy by ensuring that outbound investments do not compromise economic security, particularly in areas of high technological sensitivity.