On 14 October 2026, the European Commission published its Sixth Annual Report on the screening of foreign direct investments into the European Union (the “Report”), covering developments in 2025.
Key takeaways:
- Notifications continue to rise, reaching a record 4,773 in 2025. With still over a third found to be out of scope (33% in 2024 and 35% in 2025), the figures suggest that investors tend to “over-notify” when faced with regimes of uncertain scope.
- Review outcomes have remained stable, with very few outright prohibitions, although the bar for blocking investments may be lowering.
- The number of cases going through the EU Cooperation Mechanism has increased sharply (by c. 40%) and largely reflects the general rise in caseload (+52%) rather than enhanced pan-EU cooperation between national screening authorities.
- The EU screening landscape remains in flux, with further legislative changes expected over the next 15 months as Member States adapt their regimes to the New EU FDI Screening Regulation.
I. National Screening Activity Increased
The number of cases notified to national authorities across the EU rose again in 2025, reaching a record 4,773 notifications, up from 3,136 in 2024 (a 52% year-on-year increase). Yet 35% of these notifications were found to be out of scope (excluding Sweden, which recorded an exceptionally high number of out-of-scope decisions). Importantly, this increase in notified cases significantly outpaced the growth in EU M&A activity, which grew by only 4% according to the Report.
The increase in national screening is partly explained by new screening regimes coming online (mainly in Ireland and Bulgaria) and by greater deal activity in sensitive sectors such as defence. But it also reflects a continued trend towards precautionary filings. With a significant share of cases ultimately found to fall outside the scope of the national regimes (over a third of notifications), a legitimate question arises as to whether some regimes remain too uncertain in scope for investors to navigate with confidence.
II. National Screening Outcomes Have Remained Stable
Despite the sharp increase in notified cases, the outcomes of screened investments falling within the scope of national regimes have remained stable year-on-year: 87% of investments received unconditional approval, 9% were approved subject to remedies, 3% were withdrawn before a formal decision, and approximately 1% were prohibited – all within one percentage point of the 2024 figures. The Commission presents these figures as evidence that investment screening has not reduced incentives to invest in Europe.
While outcomes for in-scope cases have remained stable, regulatory complexity appears to have increased, as shown by the sharp rise in multi-jurisdictional filings (from 19% of all cases in 2024 to 27% in 2025). In other words, investors increasingly need to manage the timing and other challenges associated with parallel reviews.
Beyond the statistics, the Report reflects a meaningful shift in the reasoning for prohibiting investments: from investments posing “very serious threats” to security or public order (2024) to investments posing “serious risks [which] cannot be mitigated”. This suggests a potential lowering of screening authorities’ intervention thresholds when applying their national regimes (regardless of any change in legal standards).
III. Increased Use of the EU Cooperation Mechanism
Another development is the increased use of the EU Cooperation Mechanism (a procedure that enables a reviewing Member State to receive comments from other Member States and the Commission on investments with a pan-EU dimension). Member States used this procedure in 667 cases in 2025, up 40% from 477 in 2024 – the largest annual increase since the Cooperation Mechanism became operational in October 2020. This increase statistically follows the same growth trajectory as the rise in overall caseload (factoring in that not all cases get reported to the Cooperation Mechanism) and therefore unlikely signals enhanced cooperation among national screening authorities.
Furthermore, “access to sensitive data” gained significant importance as a ground for initiating Phase 2 reviews, rising from 2% in 2023 to 5% in 2024 and 12% in 2025. This growing focus on data access is also visible at national level, where screening authorities increasingly ask questions about investors’ access to sensitive target data.
Importantly for businesses, the greater use of the EU Cooperation Mechanism does not necessarily translate into seamless coordination between authorities. National authorities remain responsible for their own security assessments and final decisions, and differences in national processes and diverging priorities can complicate parallel reviews.
IV. Looking Ahead: More National Regimes and a New EU FDI Screening Regulation
By the end of 2025, all 27 Member States had enacted legislation establishing an FDI screening framework. However, several regimes only became fully operational in mid-2026 (e.g., Greece, Croatia and Cyprus), which may drive a further increase in notifications next year. Investors will continue to face differences in scope, procedure, timing and notification requirements across national regimes. This remains one of the principal practical challenges for cross-border investments, as the Commission itself acknowledges in the Report, and a key driver of the reform brought about by Regulation (EU) 2026/1386 (the “New EU FDI Screening Regulation”).
The New EU FDI Screening Regulation entered into force in July 2026 and will apply from 17 January 2028. The new framework requires all Member States to align their screening regimes with a set of common principles and requirements, such as mandatory pre-closing screening, a two-phase review structure with a 45-day Phase 1, and a minimum sectoral scope, while allowing Member States to go further (for more details, see our previous blog post). Further changes to the EU investment screening landscape are therefore likely over the next 15 months. Covington is tracking these developments closely to help investors assess and navigate screening requirements.