New law grants power to screen and halt foreign investments

Investments by non-EU companies in infrastructure such as health services, ports, and airports will require ministerial approval

Leo Varadkar: 'This new law is to give us the power to intervene if a non-EU actor is seeking to make an investment which would threaten our security or public order.' Picture: Gareth Chaney/Collins

New legislation is to be introduced that will allow the Government to screen foreign direct investments (FDIs) from non-EU countries.

The new law will allow the Minister for Enterprise, Trade and Employment to evaluate whether an investment poses a threat to Ireland’s security or public order and provide the powers to put a halt to such investment. 

In response to increasing numbers of foreign investors, often with foreign government backing and direction, the European Commission adopted the EU Investment Screening Regulation, which is being transposed into law by EU countries.

Investments in airports by non-EU companies will be included in the new bill.

Currently, 18 out of the 27 EU states operate domestic investment screening mechanisms, with the majority of other the members indicating their intention to move towards implementing an investment screening mechanism.

The Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar has received Government approval to publish a new bill that will grant powers to assess and even halt certain investments.

Third-country investments in technologies identified in law as "sensitive" or "critical" infrastructure such as health services, electricity grid, military infrastructure, ports, and airports will be screened. 

Transaction threshold

The transaction value threshold is set at €2m but this will be reviewed and can be revised by the minister if required. The legislation allows for fines of up to €4m or imprisonment for firms that refuse to comply.

“We are a small, open economy. We work hard to create an environment which is welcoming to foreign direct investment. This will be even more important now as we recover from the pandemic and as we face increased competition for investment globally," Mr Varadkar said.

It would be naive to think that Ireland is immune to those with more sinister intentions

"This new law is to give us the power to intervene if a non-EU actor is seeking to make an investment which would threaten our security or public order. Other EU countries are introducing similar legislation, so we will be able to better act in co-operation with them. 

"I think it’s an important safeguard, which I hope we never have to use."