Investment Screening Bill and FDI
You are on the information portal for companies facing the Wet veiligheidstoets investeringen, fusies en overnames (Investment Screening Bill – the ISB). This website provides information and practical tips on the notification requirement and investment test under the ISB. The information portal is regularly updated based on questions from companies and experiences of the lawyers involved.
The ISB is expected to enter into force in early 2023. Under the bill, companies are required to report when they perform certain acquisition activities. These activities can be tested retroactively as of Sept. 8, 2020. The notification must be made to the Bureau Toetsing Investeringen (Investment Screening Agency – BTI).
The purpose of the ISB is to protect Dutch national security by regulating investments in vital suppliers, companies active in the field of (highly) sensitive technology and administrators of corporate campuses.
Vital providers are companies that play such an important role in Dutch society that their disappearance could have far-reaching social consequences. Think of suppliers active in the fields of: transport of heat, nuclear energy, air transport, management of corporate campuses, harbors, banking, infrastructure for the financial market, extractable energy or gas storage.
Sensitive technologies include products for which Dutch exports are subject to control (such as certain chemicals and military goods). This also includes products that are not used for military purposes, but could be used for this purpose (so-called dual-use). In addition, technologies can be designated as 'highly sensitive' through an administrative decree (AMvB). At least the following categories are considered highly sensitive: technologies for nuclear goods, sensors and lasers, navigation and aircraft electronics.
The notification requirement applies to certain acquisition activities. These are activities that lead to a change in control. These include mergers, the formation of a joint venture, the division of a company or the purchase of essential assets. With highly sensitive technology, acquiring or increasing significant influence is already subject to the notification requirement.
The notification requirement rests on both the acquirer and the target company/companies. Companies involved must comply with the standstill obligation and await a positive decision before conducting acquisition activities.
Failure to comply with the obligations under the ISB may be punishable by a fine of up to 10% of the offender's annual turnover.