Introduces FDI screening regime

01 Jun 2023

On 1 June 2023, the Act on security screening of investments, mergers and acquisitions (Wet veiligheidstoets investeringen, fusies en overnames) has entered into force, introducing an investment screening framework based on national security considerations. This Act will complement existing sector-specific screening mechanisms in energy and telecommunications.

Under this Act, investments in a list of "vital providers", operators of high-tech campuses, and companies involved in sensitive technologies, such as dual-use items and military goods, may pose national security risks and thus need to be reported to the Bureau for verification of investments. The "vital providers" include heat suppliers; nuclear power companies; certain companies engaged in exploration, transportation and/or storage of natural gas; ground handling service providers; Schiphol Airport; KLM; the Port of Rotterdam; banks with a registered office in the Netherlands; and certain financial market infrastructure providers such as trading platforms. The list may be modified through a Decree.

The Act applies equally to both Dutch and non-Dutch investors and establishes a mandatory and suspensory national security regime for all qualifying investments made after September 8, 2020.

Upon conducting a national security risk analysis, the Bureau has the authority to authorize mitigating measures or prohibit acquisitions. Failure to comply with the reporting obligation may result in fines up to 10 per cent of the target company's turnover or the suspension of acquired shareholder rights.