CELIS Country Note on Czech Republic, 2023

by Ondřej Svoboda

Date of Publication 31.07.2023

Abstract

The Czech Republic introduced its new investment screening mechanism in May 2021 after
the Foreign Investments Screening Act coming into force in February 2021. It was the result a
consultative process started in 2018 set off by the debate among the EU institution on the
investment screening framework at the EU level.
Consequently, the main aim of the national screening mechanism is not only to assess whether
the foreign investment might have a negative effect on the security of the state or its internal
or public order, but it is also a transposition of Regulation (EU) 2019/452 of the European
Parliament and the Council, which establishes a European framework for investment
screening. The Czech Republic has thus become one of numerous Member States which had
to react to new requirements introduced by the EU coordinating mechanism as well as
increasing security and geoeconomic challenges in terms of foreign investments.
An ambitious full-fledged and complex investment screening mechanism located at the
Ministry of Industry and Trade but incorporating all relevant states institutions and the
Government as the final decision-maker in case of risk investment. It combines two regimes:
sectoral and cross-sectoral while the first one cover the most sensitive sectors and requires ex
ante notification. The Foreign Investments Screening Act also offers a comprehensive set of
mitigation and sanction options to government authorities.