The Screening of Third Country Transactions Bill (the "Screening Bill"), as it has been renamed, remains as priority legislation in Ireland's Summer 2022 Legislation Programme. It is expected to be published in the coming months and could potentially to be enacted by the end of this year.
The Screening Bill, once commenced, will establish a new Irish regime for assessing investments from non-EU countries where those investments could pose a risk to security or public order, and will expand on EU law principles and information-sharing under Regulation 2019/452.
The Screening Bill has been in development for some time. In January 2021, we published an articlenotingMatheson's response to the public consultation on investment screening. The key questions for dealmakers remain unanswered: Will the new regime impose notification and suspension obligations? Will it apply to deals which are signed (but not completed) before the regime commences? What will be the potential delay to deal completion and cost? How high will the 'intervention rate' be? Will there be a 'call in' power where completed deals are reviewed retrospectively and if so, what will the 'look back' periods be? Will guidance and pre-notification feedback be available? How will the new regime interact with Ireland's competition and 'media merger' merger control regimes?
We expect that the Minister of Enterprise, Trade and Employment's ("DETE") powers will be widely drawn and that a notification obligation will be placed on businesses and/or deal parties (rather than DETE being required to pro-actively identify deals of interest).
Once the Screening Bill is published, it will take some time for an adequate investment screening team and systems to be in place and for experience to show the typical process 'intervention rate'.
In the meantime, companies making investments in potentially sensitive Irish economic industries should be alive to the possible effects of this regime, even where a deal is signed before it comes into effect, and include appropriate provisions in their deal agreements. Further, if completed deals are to come under scrutiny, relevant parties need to be aware of the potential of being called on to provide remedies.
We will issue a further update once we have sight of the Screening Bill's published terms.
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