Foreign Direct Investment Screening of Third Country Transactions Act 2023 Comes into Effect 6 January 2025

The Screening of Third Country Transactions Act 2023 (STCTA 2023) (implementing into Irish law Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union) was signed into law by the President on 31 October 2023 and comes into effect today 6 January 2025. The STCTA requires notification of a proposed transaction to, and clearance by, the Minister for Enterprise, Trade and Employment (Minister) involving third-country businesses which is defined as any country that is not a member of the EU, EEA or Switzerland so it would include the UK and the US. For the compulsory notification regime to apply, a transaction must meet certain thresholds including where the value of the transaction is equal to or greater than €2 million or such amount specified by the Minister (the Minister to date has not specified any other amount so the €2 million applies), and that relates to, or impacts upon, one or more of the following matters:

• Critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;

• Critical technologies and dual use items as defined in point 1 of Article 2 of Council Regulation (EC) No 428/2009 including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;

• Supply of critical inputs, including energy or raw materials, as well as food security;

• Access to sensitive information, including personal data, or the ability to control such information; or

• The freedom and pluralism of the media (this regime will apply in parallel to the existing mergers regime for media mergers in Ireland).

The substantive test to be applied is whether the transaction will affect the security or public order of the State. 

The Minister has a broad power to call in transactions for review, regardless of whether or not they are notifiable or notified, if the Minister has reasonable grounds for believing that they would affect, or would be likely to affect, the security or public order of Ireland. 

The Minister has the power to review transactions that do not meet the thresholds including those which have completed in certain circumstances. 

The 2023 Act contains a retrospective look back provision by empowering the Minister to review completed transactions up to 15 months prior to the coming into force of the Act regardless of whether they are notified or notifiable.

The scope of application of this regime is potentially wide.

For more information, please contact Byrne Wallace Shields Corporate and Regulatory Partner and Head of Competition Law Marco Hickey SC, Corporate Partner Eamonn Carey, Senior Associate Emmet Connolly or Associate Michael Cunningham.