A specialist in competition law has said that new legislation on the screening of non-EU investments in key areas of the economy could place a bigger burden on Ireland than similar rules in other EU countries.

The Government published the Screening of Third Country Transactions Bill 2022 earlier this month.

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

In an article on the firm’s website, Philip Lee partner Ronan Dunne said that many commentators would argue that the COVID-19 pandemic had helped highlight the need for certain infrastructure in the State to be appropriately controlled.

“It is in this context that the introduction of Ireland’s proposed regime is to be welcomed,” he added.

Retroactive effect

The competition lawyer noted, however, that the definition of third countries would capture investment in Ireland from the UK and US.

“Given the profile of Irish FDI [foreign direct investment], this may place a more significant burden on Ireland when compared to our EU neighbours, in terms of the number of transactions that may need to be reviewed,” said Dunne.

He pointed out that the bill was intended to have retroactive effect, allowing the minister to call in transactions that have been completed up to 15 months before the law comes into force.

“Deal-makers will therefore need to be cognisant of the bill when reviewing current transactions,” Dunne warned.

Mandatory notification

He added that the proposals also made it possible for non-notifiable transactions – deals for which no mandatory notification obligation arose – to be called in by the minister for review for a period of 15 months after completion.

Under the bill, deals that must be notified include:

• Those with a value of €2 million or more,

• Those involving FDI from an undertaking or national of a third country (any country that it is not a member of the EU or EEA, or Switzerland),

• Those where the deal relates, directly or indirectly, to a change in control of an Irish asset, or the acquisition of a significant interest in an Irish undertaking,

• Those linked to one of the target areas for screening set down in the EU’s 2019 regulation – including critical infrastructure, critical technologies, access to sensitive information, and the media.

The Philip Lee lawyer noted also that the review timeline for the minister could be up to 135 working days after the notification was received, adding that this timeframe would need to be built into transaction timelines for relevant deals.