The Evolving Concept of National Security and Foreign Investment Screening Procedures with Particular Reference to the Italian Regime

Since the 1970s, foreign direct investment (FDI) flows have experienced substantial growth due to the liberalization and protection measures introduced by states. However, this growth came to a temporary stop with the financial and economic crisis of 2007–2010 due also to restrictive measures adopted by states to protect national economies (among which screening procedures). COVID-19 has further impacted FDI flows since many governments have made health decisions to contain the diffusion of the pandemic and economic measures to limit its negative consequences on the domestic economy. In the present context, states more often perceive a need to protect their national security by limiting foreign investments. In fact, national security is a dynamic and evolving concept. Over the years, the scope of this concept has extended going beyond the idea of military protection to include the safeguarding of other public goals that are crucial for state safety or domestic welfare. Currently, economic considerations are increasingly taken into account by governments when assessing their national security. This essay examines the evolving concept of national security and its impact on the FDI approach followed by states, focusing particularly on the recent amendments of the Italian legal framework on foreign investments. This author postulates the idea that, in extraordinary times, extraordinary measures devoted to protecting the national economy are justified. However, adopting an overly expansive interpretation of national security could create new instability in the foreign investment legal framework with negative repercussions on FDI flows.