EXPLANATORY MEMORANDUM
1.CONTEXT OF THE DELEGATED ACT
The main objective of Regulation (EU) 2019/452 of the European Parliament and of the Council establishing a framework for the screening of foreign direct investments into the Union 1 (‘the Regulation’) is to create greater awareness of the Member States and the European Commission for risks from certain foreign direct investments (‘FDI’) that may, in certain circumstances, affect security or public order in the Union.
Articles 6 to 11 of the Regulation establish a cooperation mechanism under which the Member States and the Commission are to exchange information and comment on FDI, which are likely to affect security or public order in more than one Member State.
The Regulation also aims at increasing the awareness of FDI affecting projects and programmes of Union interest. To this end, Article 8 of the Regulation allows the Commission to issue an opinion when it considers that an FDI is likely to affect projects or programmes of Union interest on grounds of security or public order, which shall be sent to all Member States. Article 8(2)(c) states that such opinion shall be taken into ‘utmost account’ by the Member State where the investment is planned or completed and the Member State shall provide an explanation to the Commission in case its opinion is not followed.
Article 8(3) sets out that projects and programmes of Union interest are projects and programmes which involve a substantial amount or a significant share of Union funding, or which are covered by Union law regarding critical infrastructure, critical technologies or critical inputs which are essential for security or public order. The list of projects and programmes is annexed to the Regulation. Pursuant to Article 8(4) the Commission shall adopt delegated acts to amend this list.
In view of developments since the previous update of the Annex on 13 July 2020 2 , including the adoption of the Multiannual Financial Framework for the years 2021 to 2027 3 (‘MFF 2021-2027’), the following projects and programmes of Union interest were identified as fulfilling the criteria of Article 8(3) and are thus are proposed to be added to the list annexed to the Regulation.
1.The Space Programme aims to ensure investment continuity in EU space activities, encourage scientific and technical progress and support the competitiveness and innovation capacity of the European space industry. It brings together the existing infrastructure and safeguards continuity and evolution of Galileo and EGNOS, the EU's global and regional satellite navigation systems as well as Copernicus, the EU's free and open Earth Observation programme. Secondly, it also aims at developing new security components, such as Space Situational Awareness, which includes a Space Surveillance and Tracking sub-component; the monitoring of space hazards; and the new Governmental Satellite Communication service (GOVSATCOM) for EU and Member State authorities. Thirdly, it fosters a strong and innovative space industry, e.g. by improving access for space start-ups and small and medium-sized enterprises (SMEs) to risk finance, facilitating access to testing and processing facilities, or promoting certification and standardisation. Fourthly, it aims at maintaining the EU's autonomous access to space, e.g. by aggregating the EU demand for launch services and investments in innovative technology, such as reusable launchers.
2.Horizon Europe is the Union’s key funding programme for research and innovation and it supports, inter alia, actions critical for security or public order in the Union. When implementing Horizon Europe, the Union may enter into certain legally defined forms of public-private and public-public partnerships. Despite being aligned to the objectives of and arguably covered by Horizon Europe, these partnerships are distinct and sizeable instruments with an individual legal basis in primary law, i.e. Articles 185 and 187 TFEU. For greater certainty, it is appropriate to expressly mention partnerships taking the form of Union participation in programmes undertaken by several Member States, instruments such as Joint Undertakings or bodies such as the European Institute of Technology.
3.The Euratom Research and Training Programme 2021-2025 supports nuclear research and training activities with an emphasis on nuclear safety, security, radioactive waste and spent fuel management, radiation protection and fusion energy. It also aims at improvements in the areas of education, training and access to research infrastructures. Furthermore, it supports the mobility of researchers in the nuclear field in the framework of Horizon Europe's Marie Skłodowska-Curie Actions (MSCA). The programme uses the same instruments and rules for participation as Horizon Europe. It is limited to 5 years, to be extended in 2025 by 2 years in order to be aligned with the MFF 2021-2027.
4.The Connecting Europe Facility funds key projects in the areas of transport, digital and energy. Its aim is to accelerate investment in the field of trans-European networks and to leverage funding from both the public and the private sectors, while increasing legal certainty and respecting the principle of technological neutrality. In the field of transport, it promotes interconnected and multimodal networks to develop and modernise railway, road, inland waterway and maritime infrastructure, as well as safe and secure mobility. It also ensures that when infrastructure is adapted to improve military mobility within the EU, it is dual-use compatible, meeting both civilian and military needs. In the energy sector, the programme aims to contribute to further integration of the European energy market, improving the interoperability of energy networks across borders and sectors, facilitating decarbonisation, and ensuring security of supply. Funding is also available for cross-border projects in the field of renewable energy generation. In the area of digital connectivity, the scope of the programme reflects the fact that the digital transformation of the economy and society at large depends on universal access to reliable and affordable high and very high capacity networks. To qualify for support, a project has to contribute to the digital single market and EU connectivity targets.
5.The Digital Europe Programme is the first financial instrument of the EU focused on bringing digital technology to businesses and citizens. It provides funding for projects in five crucial areas: supercomputing, artificial intelligence, cybersecurity, advanced digital skills, and ensuring the wide use of digital technologies across the economy and society. The programme is fine-tuned to fill the gap between the research of digital technologies and their deployment, and to bring the results of research to the market - for the benefit of Europe's citizens and businesses, and in particular small and medium-sized enterprises. Investments under the Digital Europe Programme support the Union's twin objectives of a green transition and digital transformation and strengthen the Union's resilience, open strategic autonomy and digital sovereignty. It complements other EU programmes, such as the Horizon Europe programme for research and innovation and the Connecting Europe Facility for digital infrastructure.
6.The European Defence Fund is aiming to foster the competitiveness and innovativeness of the European defence technological and industrial base thereby contributing to the EU's security and strategic autonomy. It aims to trigger cooperative programmes and, by supporting collaborative research and development activities, to provide the necessary incentives to boost cooperation at each stage of the industrial cycle. It follows up two programmes already mentioned in the Annex, namely the Preparatory Action on Defence Research and the European Defence Industrial Development Programme. Furthermore, there will be close links between the Fund and projects implemented in the framework of Permanent Structured Cooperation (PESCO) in the form of a higher funding rate to be granted to eligible PESCO projects.
7.The EU4Health Programme is one of the EU's response to the COVID-19 pandemic, which has had a major impact on medical and healthcare staff, patients and health systems in the EU. Being the largest EU health programme ever, it aims to make health systems more resilient to deal with cross-border health threats like COVID-19 and improve crisis management capacity and better pandemic preparedness; improving the availability, accessibility and affordability of medicinal products and medical devices and crisis-relevant products in the Union, supporting innovation; and advance digital transformation.
2.CONSULTATIONS PRIOR TO THE ADOPTION OF THE ACT
In line with paragraph 4 of the Common Understanding on delegated acts between the European Parliament, the Council and the European Commission, appropriate and transparent consultations, including at expert level, have been carried out on this delegated act. The Group of experts on the screening of foreign direct investments into the European Union was consulted.
3.LEGAL ELEMENTS OF THE DELEGATED ACT
Article 8(3) of the Regulation empowers the Commission to adopt delegated acts in order to amend the list of projects and programmes of Union interest.
The following projects and programmes should be added to the Annex of the Regulation: