**Introduction** National security considerations increasingly shape foreign direct investment (FDI) screening by redefining investment risk in strategic terms. Screening regimes now assess whether foreign ownership or control could affect critical infrastructure, sensitive technologies, access to data, or security-relevant supply chains. This evolution has expanded the scope of screening mechanisms, altered review criteria, and embedded FDI policy within broader economic security frameworks[1][2]. **National security impacts on FDI screening** **1.** **National security expands the scope of sectors subject to screening** FDI screening policies have widened beyond defense assets to include sectors considered essential to national and economic security. These commonly include energy systems, transport infrastructure, digital networks, critical technologies, raw materials, and data-related activities. The rationale is that foreign control in these areas could disrupt essential services or create strategic dependencies, even when investments are undertaken for purely commercial purposes[1][3]. This sectoral expansion reflects a shift from asset-specific risks toward systemic vulnerabilities linked to control over infrastructure, technology, and information flows. **2.** **Screening places greater emphasis on investor characteristics and state influence** National security-driven screening increasingly evaluates the identity and governance of the investor, not just the asset being acquired. Reviews examine whether investors are directly or indirectly subject to foreign government influence, including through state ownership, public financing, or legal obligations in their home jurisdictions. The concern is that such links may enable non-commercial objectives to shape control over sensitive assets[1][2]. As a result, similar transactions may face different scrutiny depending on ownership structure, control rights, and exposure to state direction. **3.** **Screening outcomes increasingly rely on binding risk-mitigation measures** Rather than defaulting to outright prohibitions, national security screening frequently results in approvals subject to legally binding conditions. These measures address specific risks such as access to sensitive information, control over critical infrastructure operations, or transfer of strategic technologies. Screening therefore affects how investments operate over time, not just whether they proceed[2][3]. This approach reflects a preference for managing security risks while preserving investment openness where feasible. **4.** **FDI screening is increasingly embedded in broader economic security strategies** National security considerations have linked FDI screening to wider economic security agendas focused on resilience, strategic autonomy, and supply-chain vulnerability. Screening mechanisms are used alongside industrial policy and trade tools to manage dependence on concentrated suppliers and protect capabilities viewed as strategically important in a more fragmented global economy[2][4]. This integration elevates FDI screening from a narrow regulatory safeguard to a core instrument of economic governance. **Conclusion** National security considerations have fundamentally reshaped FDI screening policies. Broader sectoral coverage, closer scrutiny of investor characteristics, increased reliance on mitigation measures, and stronger links to economic security strategies show that foreign investment is now assessed not only for its economic effects, but for its implications for strategic resilience and control. While these changes strengthen governments’ ability to manage security-related risks, they also add regulatory complexity and contribute to a more fragmented global investment environment.
