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Investment-screening law to start in January

New legislation on the screening of non-EU investments in key areas of the economy will come into force on 6 January next year.

Dara Calleary (Minister of State for Trade Promotion, Digital and Company Regulation) has signed a commencement order for all provisions of the Screening of Third Country Transactions Act 2023.

It will give the Minister for Enterprise, Trade and Employment the power to review particular types of foreign investment in infrastructure and other key sectors, and to block or modify them on the grounds of national security.

EU concerns

The legislation was prompted by an EU regulation aimed at addressing potential threats to “security and public order” from some investments from third countries.

The regulation was developed in response to concerns amongst member states about the acquisition of strategic or sensitive European companies or technology by foreign-owned firms from third countries.

Experts have forecast that the act will trigger a significant number of notifications each year, as both the US and Britain are third countries for the purposes of the act.

Appeals mechanism

Among the criteria for notification is that the value of the transaction is equal to, or greater than, €2 million (or such other amount as may be prescribed by the minister).

The act sets up a specialist panel to inform and advise the minister on the screening of specific foreign investments.

It also includes an appropriate appeals mechanism aimed at ensuring as much as transparency and certainty as possible for investors.