kom (2024) 0024 - Bilag 2: Notat om dansk høringssvar vedr. hvidbog om udgående investeringer

Europaudvalget 2023-24
KOM (2024) 0024 Bilag 2
Offentligt

Written response to the Commission’s White

Paper on Out-

bound Investments

The Danish Government welcomes this opportunity to share our written

response to the Commission’s White Paper on Outbound

Investment (the

White Paper). Before we provide you with our in-depth comments to the

White Paper, we want to use this opportunity to describe how we under-

stand economic security. This will bring some context to our remarks on

the White Paper.

It is our view that the objective of economic security is to mitigate critical

dependencies and vulnerabilities that exists in the intersection between

economic policies and security policies. European economic security calls

for a common approach to the need to diversify critical dependencies, the

promotion of EU production, the protection of critical infrastructure and

the control of export and investments in order to avoid unwanted technol-

ogy leakage.

Due to the current geopolitical situation and with the rapid technological

development the world is experiencing, the Danish Government finds it

crucial for the EU to uphold global trade while securing the right balance

between protection measures. Progress must be made on all three pillars

of the economic security strategy. Protection measures cannot stand alone.

As such, we must continue and give impetus to our efforts to promote a

competitive and resilient EU economy with a focus on new and innovative

technologies such as biotech, AI and quantum. Likewise, we must con-

tinue to strengthen cooperation and partnerships with third countries, in-

cluding those with which we have common economic security interests.

An open European economy is fundamentally in our common interest,

since it secures access to the most competitive goods and services. Fur-

thermore, it is vital to ensure our competitiveness and our ability of Euro-

pean businesses to sell their goods and services globally. At the same time,

the Danish Government recognizes the need to protect European technol-

ogy and knowledge from unwanted technology leakage if concrete secu-

rity risks and national security concerns are identified. We thus believe

that protect measures should be limited to specific technologies that are

critical for upholding

the EU’s economy and security.

The Danish Government believes that this calls for further analysis and

more sufficient data, before we develop new tools such as the screening

of outbound investments. In connection to this, we find it important that

potential new tools are based on a solid and thorough analytical basis and

are developed in close cooperation with Member States. For this reason,

we welcome the White Paper on Outbound Investments and supports the

intention of the White Paper.

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The Danish Governement supports the suggested step-by-step approach

in the White Paper, but notes that the suggested timeframe is optimistic.

As for the first step, the public consultation, we welcome this initiative.

As for the second step, the monitoring exercises, we suggest that the fol-

lowing issues are addressed, before the Commission makes its recom-

mendation for the Member States to start the monitoring exercise:

Need for common definitions and methodology.

A monitoring exercise that limits the burdens on European busi-

nesses as much as possible.

As for the third step, the national and Common risk assessment, we wel-

come the exercise, but in order to secure useful assessments, we hope the

Commission will address the abovementioned issues. In the following,

we will elaborate on the issues identified.

Need for common definitions and methodology.

The Danish Government believe that there is a need for clear definitions

of what constitutes an outbound investments and clear definitions of the

technology areas in question.

We note that the White Paper does state that:

“Member States should monitor investments of any kind by natural or le-

gal persons resident or established in the EU (‘EU investors’) aimed at

carrying out an economic activity outside the EU.”

The White Paper fur-

ther states that such investments should include

“acquisitions,

mergers,

asset transfers, greenfield investments, joint ventures,

and

venture capital

investments”.

These examples are helpful, but we suggest that a common

agreement is reached as to how these six types of investments are under-

stood, before any monitoring is initiated. E.g.,

for ‘acquisitions’ Member

States should find a common understanding to when as

“an effective par-

ticipation in the management”

is established.

Regarding the technology areas in which investments should be moni-

tored, we find that there is a need for common definitions of the four men-

tioned technologies, if we wish to make sure that each Member State’s

monitoring is based on a common understanding. We consider this as piv-

otal if the collected data is meant to be comparable.

In this regard, we suggest narrow definitions of the four technology areas.

We note that the White Paper states that the four technologies are

“highly

likely to present the most sensitive and immediate risks related to technol-

ogy security and technology leakage”

according to the Commission Rec-

ommendation on critical technology areas for the EU's economic security

for further risk assessment with Member States of 3 October 2023. We

also note that the White Paper states that the technologies should be able

“enhance military and intelligence capacities of actors who may use

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these capabilities to threaten international peace and security.”

We thus

suggest that the monitoring exercise only includes aspects of the four tech-

nologies that may be used to enhance military and intelligence capacities.

In relation to the methodology of the monitoring exercise, we finally

note that a data collection will likely be based on a voluntary participa-

tion from businesses since Denmark and other Member States do not

have the legal basis to collect the data. We recognize that voluntary data

collection will likely be the best available option, but we also find that

this is prone to be biased (e.g. meaning that not all potentially critical in-

vestments are likely to be reported). Such bias should be addressed and

accounted for in the forthcoming risk assessment.

A monitoring exercise that limits the burdens on European busi-

nesses as much as possible.

The Danish Government notes that the monitoring exercise is a burden-

some new task not only for National Administrations, but especially for

European businesses as well. In a response to a public consultation con-

ducted by the Ministry of Business, Industry and Financial Affairs, it has

been stressed that the monitoring exercise will be a heavy administrative

burden on European business and that the exercise is in complete opposi-

tion to the Commission’s own ambition of reducing administrative bur-

dens on European businesses. It is also a stated goal for the Danish Gov-

ernment to decrease administrative burdens on Danish businesses. Due to

this, we see a need to limit the scope of the monitoring exercise so that it

only includes the collection of necessary information to recognize trans-

actions that

“enhance military and intelligence capacities of actors who

may use these capabilities to threaten international peace and security.”

The Danish Government has three concrete suggestions to how the scope

of the monitoring exercise might be limited and thus decrease the admin-

istrative burdens on European industry.

•

The scope could be limited, as mentioned in the section above, by

agreeing on common definitions. Here we suggest that these defi-

nitions should be narrow and limited to only include aspects of the

four technology areas that can be used for military or intelligence

purposes.

Considering that this monitoring should enable National Admin-

istrations to investigate whether an outbound investment can con-

stitute a threat to European security or international peace, Den-

mark believes that like-minded countries should be excluded from

the monitoring, e.g. OECD countries. Many like-minded countries

are also some of the EU’s biggest trade partners, and this would

also lessen the burden of this exercise on national administrations

and European businesses.

•

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•

The Danish Government finds that the time period could be lim-

ited. The White Paper states that all transactions completed since

1 January 2019 should be included. We recognizes the need to col-

lect the necessary amount of data, but also finds that a shorter time

period could lessen the administrative burdens on European busi-

nesses.

As a final remark, it is stressed that the Danish Government supports the

intention of the White Paper. We recognize the need for more knowledge

and data on outbound investment. The Danish Government, however,

finds that the stated goals of more knowledge and data is possible to

achieve through a narrower scope of the monitoring exercise.