New laws to crack down on 'potentially hostile investments' come into force 

The new law applies to specific industries, such as ones that supply critical inputs such as energy or raw materials, as well as food security

Minister of State Dara Calleary said that the formal screening mechanism for investments would be tailored to Ireland’s needs. Picture: Gareth Chaney/Collins

New laws come into effect today that will allow the Government to screen inward investment into Ireland to protect against “potentially hostile investments”.

The Screening of Third Country Transactions Act 2023 was signed into law in 2023, but its provisions only take effect from January 6, 2025.

The Act was drafted to fall into line with EU legislation, created as 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”.

During debates on the matter, however, the Government was clear that it would prioritise protecting foreign direct investment into Ireland despite these new measures.

The legislation will apply to investments exceeding €2m, and when such investments lead to the takeover of an asset or undertaking, or exceeding 25% control of the asset.

It only applies to specific industries, such as ones that supply critical inputs such as energy or raw materials, as well as food security.

Furthermore, it also applies to “critical technologies” such as AI, robotics, cybersecurity, aerospace, and defence alongside critical infrastructure such as health, communications and media.

Specifically, transactions relating to “the freedom and pluralism of the media” also fall under the legislation.

Under the legislation, the relevant minister will be able to assess, investigate, authorise, condition, or prohibit foreign investments based on a range of security and public order criteria.

There will also be an appeals mechanism to “ensure transparency and certainty for investors”.

A Government statement added: “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.” 

Minister of State Dara Calleary said that the formal screening mechanism for investments would be tailored to Ireland’s needs and would maintain “our attractiveness as a location for investment while putting in place a robust but proportionate screening mechanism that protects security”.

“Our FDI partners will be comfortable that this is not too onerous a burden,” he said.