Tánaiste and Minister for Enterprise, Trade, and Employment, Leo Varadkar, has published a new law. Screening of investments can only be executed by member states at their own preference.
FREMONT, CA: Ireland may soon screen investments from non-EU sources for probable perils to national security. Tánaiste and Minister for Enterprise, Trade, and Employment, Leo Varadkar, received Government support on 26th June to publish a new law that will present an investment screening methodology.
The purpose is to protect Ireland’s essential technology and infrastructure from potentially detrimental foreign investment. The methodology will authorise the minister to estimate whether an investment poses a threat to Ireland’s security and provide the powers to put a deadlock on such investment if they deemed vital. It will also lead to improved information exchange and cooperation with other EU states.
Varadkar reiterated that Ireland is a small and open economy. The country works hard to foster an environment which is welcoming to foreign direct investment. This law will be even more crucial now as Ireland recovers from the pandemic and faces boosted competition for investment globally.
Based on ownership and transaction values, investments in technologies specified in law as ‘sensitive’ or ‘critical’ infrastructure–correlating to areas such as health, electricity grid, military infrastructure, ports, and airports–will be screened. The existing transaction value threshold is set at 2m Euros, but this will be reevaluated and modified by the minister if needed.
The bill has been designed partially in response to the EU Investment Screening Regulation, which itself is a response to increasing concern among member states concerning the purchase of strategic European companies by foreign-owned and even state-owned, firms. Screening of investments can only be executed by member states at their own preference, with individual member states choosing exclusively whether any action is required.