The Dutch Minister of Economic Affairs announced that the Netherlands will introduce FDI screening for foreign direct investments in sensitive sectors in order to safeguard the national security. The Netherlands introduced earlier this year legislation for ex-ante as well as ex-post investment screening which is limited to the telecom sector.
The new FDI screening mechanism for sensitive sectors is to be designed to prevent (ex-ante) or prohibit and unwind (ex-post) a merger or acquisition of (parts of) a business that is deemed contrary to the Dutch national security. Screening will cover mergers and acquisitions finalised on or after 2 June 2020, and hence, the new – still to be adopted – FDI screening mechanism will have retroactive effect.
Sensitive sectors subject to future FDI screening will cover the following types of businesses:
By introducing FDI screening for several sensitive sectors, the new Dutch FDI screening system aligns with the FDI screening systems of various other EU Member States and is to be regarded as a step towards strategic protection of the national security as recommended by European Commission guidance and the earlier introduced EU FDI screening mechanism.
We are of course tracking the legislative process once started and will report on any relevant progress in part II.