News Flash: New EU Recommendation on Outbound Investments in Critical Technologies

What You Need to Know


On 15 January 2025, the European Commission issued Recommendation (EU) 2025/63. This comprehensive framework introduces measures for systematically reviewing outbound investments in technologies critical to the EU’s strategic interests. It addresses concerns about the security of critical infrastructure, technology leakage and economic dependencies in a context of heightened geopolitical tensions and rapid technological shifts.

 

Full details here: EU Recommendation 2025/63.

Key Elements of the Recommendation

1. Focus Areas for Technology Review

The review targets investments in:

  • Semiconductors:

    • Design and manufacturing of integrated circuits, advanced packaging, and fabrication equipment.

    • Key components including software and materials like specialty chemicals, rare gases, and wafers.

  • Artificial Intelligence (AI):

    • Generative AI systems requiring high computational capacity.

    • Applications involving biotechnology, defence, or space technologies.

  • Quantum Technologies:

    • Quantum computing, communication, and sensing.

These areas represent high-risk domains where technology leakage could put economic security and strategic interests at risk.

2. Types of Transactions Under Review

The Recommendation applies to:

  • (Indirect) Acquisitions: Controlling stakes enabling an effective participation in the management of the company or enabling the investor to exercise strategic influence on the company.

  • Mergers: Corporate combinations forming new entities.

  • Asset Transfers: Movement of intellectual property, know-how, or tangible assets critical to economic activities.

  • Greenfield Investments: Creation of subsidiaries or similar ventures abroad.

  • Joint Ventures and Venture Capital: Investments involving expertise or connections to critical technologies.

  • Excluded:
    Non-controlling financial investments solely for returns are excluded, as are individual transactions involving dual-use items regulated under EU export controls.

 

 

 

3. Member State Responsibilities and Stakeholder Engagement

  • Establishment of an adequate system for reviewing transactions.

  • Collection of sufficient data to assess transaction risks.

  • Conducting case-by-case assessments focusing on economic security, considering risks such as technology leakage, threat actors, geopolitical factors, transaction context, and supply chain or EU project impacts.

  • Consultation of stakeholders, including business, academia, and civil society, as part of the review process.

  • Appointment of a Single Contact Point, designation of national review authorities, and sharing of contact details with the Commission by 15 March 2025.

  • Submission of progress updates by 15 July 2025 and a full review by 30 June 2026.

Why This Matters for Your Business

  • Anticipate Compliance Needs: Evaluate your investments in critical technology to ensure compliance with the new framework.

  • Proactively Manage Risks: Identify potential risks in your outbound investments and adapt strategies to protect intellectual property and know-how.

  • Shape the Dialogue: Engage with authorities during consultations to advocate for business-friendly approaches.

How We Can Help

Our team offers guidance to help businesses navigate the complexities of this new framework. We can assist with:

  • Reviewing your outbound investment portfolio for compliance.

  • Preparing risk assessments aligned with EU expectations.

  • Supporting your participation in stakeholder consultations.

 

Authors

 

Dr. Anna Wolf-Posch, LL.M. 

Partner

Anna.Wolf-Posch(at)cerhahempel.com

+43 1 514 35 581

 

Mag. Jovan Mitic

Associate

Jovan.Mitic(at)cerhahempel.com 

+43/1/514 35-587