Significant changes to the FDI screening regime
22 Mar 2024
On 22 March 2024, the Investment Canada Act was amended, following royal assent. This amendment ushers in a modernization package aimed at enhancing the Foreign Direct Investment (FDI) screening mechanism. Key modifications introduced include:
- The implementation of a pre-closing filing requirement in specific sectors deemed sensitive to national security or economic stability.
- An increase in penalties for non-compliance with the Act's provisions.
- The Minister of Innovation, Science, and Industry is now vested with expanded powers concerning foreign investments. These powers include the authority to:
a) Impose interim conditions on an investment during the national security review process.
b) Accept binding commitments from investors aimed at mitigating potential national security risks associated with the investment.
- The new legislation facilitates greater international cooperation and information exchange related to foreign investment reviews and national security assessments.
- FDI screening now encompasses investments made by State-owned enterprises, irrespective of the investment's value.
- The criteria for FDI review have been updated to consider intellectual property rights developed with Governmental support and the use and protection of personal information of Canadians.
- An investor's history of corruption is now considered a valid factor in determining potential threats to national security.
- The amendment clarifies that the scope of FDI screening also covers asset sales.
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Type:
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Entry and establishment (Ownership and control, Approval and admission)
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Industry:
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