The new regulations aim to help countries within the European Union to recognise and act against foreign direct investment that could threaten national security.
On Sunday (13 September), Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, TD, announced that the Government has agreed to draft legislation that will give effect to a European Union (EU) regulation to screen foreign direct investment coming into Ireland.
The Investment Screening Bill 2020 will allow member states in the EU to have a mechanism in place to screen foreign investment for any risks it may pose to security or public order in the host member state.
Varadkar said: “I see Ireland as an island in the centre of the world. We have a strong reputation as a welcoming home for foreign direct investment and that will continue over the lifetime of this Government. Foreign direct investment will be crucial as we seek to repair the economic damage wrought by the Covid-19 pandemic.”
Protecting security and strategic assets
Varadkar said that while Ireland welcomes investment, it is “important to be on our guard against forces that threaten our security and strategic assets falling into the hands of unfriendly foreign governments”.
“This legislation will provide for EU countries and the Commission to share information and raise concerns about a company seeking to invest in a country, when doing so would pose a risk to state security or public safety,” Varadkar said.
“It is important that the structures put in place in accordance with this regulation are proportionate and tailored to ensure they meet that objective, while ensuring Ireland maintains its position as a small, open economy, that is very welcoming of investment from abroad.”
Once enacted, the Investment Screening Bill 2020 will empower the Minister to respond to threats to Ireland’s security and public order posed by particular types of foreign investment and to prevent or mitigate such threats.
Under the proposed legislation, the Minister for Enterprise, Trade and Employment will be able to assess, investigate, authorise, condition, prohibit or unwind foreign investments from outside of the EU, based on a range of security and public order criteria.
At present, there is no such screening mechanism in Ireland. The Department of Business, Enterprise and Innovation has already conducted and published the results of a consultation on this regulation, which can be found here.