EU Hopes to Propose New Export Control, Investment Initiatives by End of Year

The EU this week released an economic security strategy, detailing plans to improve export controls over sensitive technologies and study whether it needs better guardrails around inbound investments and new restrictions around outbound investments. The strategy could lead to new proposals surrounding export controls and investment restrictions by the end of the year.

The European Commission said it hopes to implement the strategy alongside member states and the European Parliament so it can create a “comprehensive approach to protect the Union's economic security.” Export licensing procedures in particular need “more coordinated action at EU level,” Margrethe Vestager, European Commission executive vice president, told reporters June 20. She said she wants to work with EU countries to “fully implement” the bloc’s existing dual-use regulations with the potential for new proposed controls before 2024.

She also said the EU needs to make sure its companies' “capital, research, expertise and knowledge are not used to fuel technological advances” in certain countries, calling on the bloc to “look at security risks arising from outbound investment.” She said the commission will “examine these risks together with Member States, and on this basis propose an initiative by the end of the year.”

The 17-page strategy said some dual-use “strategic technologies” need “specific attention.” Due to Russia’s invasion of Ukraine and other “geopolitical tensions,” some countries have “stepped up national controls” on critical technologies, specifically mentioning “semiconductor chips or equipment related to quantum computing.” The commission said it’s concerned about “possible divergences” between member states’ export controls “as more technologies are developed that are key to national security.”

The commission said “a reflection should begin on building on the existing framework to develop a more coordinated European approach that goes beyond the current obligation of ensuring transparency among Member States.” The body said it plans to “table a proposal at the latest by the end of this year to improve the effectiveness and efficiency of the current framework.”

The strategy doesn't mention China, and Josep Borrell, the bloc’s foreign policy chief, told reporters that “it is not about China.” But it does say geopolitical tensions are “rising” and member states have had to “shoulder the cost of economic coercion.”

“While the European Union has done a lot to respond to specific challenges in recent years,” the strategy said, ‘it now needs a comprehensive strategic approach to economic security, de-risking and promoting its technological edge in critical sectors.”