The Government will introduce new laws to screen foreign direct investment (FDI) coming to Ireland, Enterprise, Trade and Employment Minister Leo Varadkar has confirmed.
The legislation will be brought in to give effect to a European Union regulation and is seen as an important tool to tackle concerns that strategically important assets – including research – could find its way into the hands of investors from countries such as China.
“Once enacted, the Investment Screening Bill will empower the minister for Enterprise, Trade and Employment 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,” noted the department yesterday.
“Under the proposed legislation, the minister will be able to assess, investigate, authorise, condition, prohibit or unwind foreign investments from outside the EU, based on a range of security and public order criteria,” it added.
Ireland was the target for €3.1bn of foreign direct investment from China between 2000 and 2019.
That compared to €50.3bn that was pumped into the UK by China in the period, and €22.7bn into Germany.
EU regulation 2019/452 notes that in determining whether a foreign direct investment may affect security or public order, member states can consider the effects on critical infrastructure, technologies, and “inputs which are essential for security or maintenance of public order, the disruption, failure, loss or destruction of which would have a significant impact in a member state”.
“It should also be possible for member states and the Commission to take into account the context and circumstances of the foreign direct investment.
“In particular whether a foreign investor is controlled directly or indirectly, for example, through significant funding, including subsidies, by the government of a third country or is pursuing State-led outward projects or programmes,” the EU regulation says.
Mr Varadkar said FDI is very welcome, but it must be screened.
“While we welcome 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,” he said.
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