8th November 2024
Dara Calleary TD, Minister of State for Trade Promotion, Digital and Company Regulation, today announces that preparatory work for the commencement of the Screening of Third Country Transactions Act 2023 is nearing completion and it is anticipated that the Act will be commenced in early January 2025.
This crucial legislation enables the Minister for Enterprise, Trade and Employment to respond to threats to Ireland’s security and public order posed by particular types of foreign investment, and to prevent or mitigate such threats. Parties to an investment likely to close in the coming months are advised to consider the provisions of the Act to determine if the investment will be notifiable under the Act once commenced.
The legislation was developed following the adoption of the EU FDI Screening Regulation 2019/452. The Act gives full effect to the Regulation and provides for the introduction of an inward investment screening mechanism in Ireland for the first time.
This screening mechanism has been designed and tailored to suit Ireland’s needs, balancing our longstanding Foreign Direct Investment Strategy whilst also acknowledging the challenge posed by potentially hostile investments.
The commencement of this screening mechanism will also provide reassurance to key trading partners that Ireland is a responsible global player, cognisant of the threat posed by the strategic and potentially hostile State-backed investment strategies being deployed by some third-country corporations.
Additional information and guidance documents on the implementation of the screening mechanism are available on our webpage: Inward investment screening
For further information, please contact the Inward Investment Screening Unit: investmentscreening@enterprise.gov.ie
ENDS
Notes for Editors
Background – Screening of Third Country Transactions Act
The Screening of Third Country Transactions Bill was initiated in the Dáil by Minister of State Dara Calleary. Upon its passage through the Houses of the Oireachtas, President Higgins signed the Screening of Third Country Transactions Act 2023 into law on 31 October 2023.
The Screening of Third Country Transactions Act 2023 was developed on foot of the adoption of the EU FDI Screening Regulation which came into force in October 2020.
The Regulation was a response to the growing concerns amongst Member States about the acquisition of strategic or sensitive European companies or technology by foreign-owned firms from third countries.
The Act empowers the Minister for Enterprise, Trade and Employment to respond to threats to Ireland’s security and public order posed by particular types of foreign investment, and to prevent or mitigate such threats.
This Act facilitates the operation of an investment screening mechanism in Ireland for the first time.
This mechanism has been designed to ensure the attraction of inward investment into Ireland is not deterred whilst at the same time empowering the State to prevent against potentially hostile investment.
Specifically, the Act:
- Ensures that Ireland fulfils its’ obligations as set out in Regulation (EU) 2019/452.
- Empowers the Minister to assess, investigate, authorise, condition, or prohibit foreign investments based on a range of security and public order criteria.
- Defines the nature, scale and type of inward investments that should undergo investment screening (e.g., sensitive technologies, assets or data).
- Sets out the factors that will be considered when applying screening to particular foreign investments (i.e., the threat posed to security and public order as a result of the target being acquired, the degree of control being applied, or the risk associated with the acquiring party).
- Establishes an Investment Screening Advisory Panel to inform and advise the Minister in relation to the screening of specific foreign investments.
- Outlines an appropriate appeals mechanism to ensure transparency and certainty for investors, to the degree possible, whilst maintaining security and public order.
- Sets out the penalties that may apply to those investors/investees failing to fulfil all of the criteria required for an investment undergoing screening, or investors that breach Ministerial orders arising as a result of the screening process.
The Act provides an appeals system that takes account of the fact that some information related to decisions cannot be disclosed publicly without undermining national security, even where that decision is appealed to the Courts.
While all of the preparatory work for the new system is now being finalised, including the dedicated IT system, the formal signing of the Commencement Order to bring the Act into operation will not take place until after the upcoming General Election campaigning. This timeline is being released to give additional certainty to the investment community and to ensure their readiness to consider the provisions of the Act, for investments closing from January 2025 onwards.
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