Screening regime for foreign investment set to be pushed out to 2025

Enforcement of a new EU law requiring the Government to screen certain inward investments from non-EU countries into critical Irish industries could be pushed out to next year, a conference in Dublin heard on Wednesday, after a series of delays over the past 12 months.
The Screening of Third Country Transactions Act 2023, which was signed into law in October 2023, was due to commence in April but was further delayed until the summer, and then the autumn. It is now slated for commencement in December.
“I’d say, watch that space,” Anna-Marie Curran, a partner in A & L Goodbody’s EU, competition & procurement group, told the law firm’s annual Corporate Crime and Regulation Summit in Croke Park. “It is probably going to get pushed, maybe further.”
However, the solicitor said lawyers are working off the assumption that it will come into force in early December as expected.
Ms Curran said the legislation is something that “everybody needs know about” because it creates new mandatory reporting standards for companies receiving foreign direct investment from non-EU countries.
It requires companies to report qualifying transactions to the Minister for Enterprise, Trade, and Employment at least 10 days before completion. The minister then has 90 days to review the transaction and can then approve, block or impose conditions on it.
“We’re talking about acquisitions, or acquisitions of control of company,” Ms Curran said. “But also acquisitions of shareholdings in Ireland, and acquisitions of assets.”
She said it means companies based in an EU third country, such as the UK, that acquire an Irish asset or company will be subject to the new reporting rules. Qualifying investments must also meet particular thresholds, including whether or not it is in a so-called critical sector, Ms Curran said.
“A critical sector means critical infrastructure, critical inputs, media,” she said. “Generally, we’re looking at health, energy, transport: these types of sectors. So it’s a very far reaching broad regime, and I have to say it’s keeping us busy at the moment.”
Attended by more than 500 corporate counsel, compliance and risk professionals, the event also heard that increasingly prescriptive regulatory requirements at the EU and domestic level coupled with ever-widening international sanctions regime are creating a “patchwork of risk” for Irish-based financial services and technology firms.
This complexity means it has never been easier for otherwise-compliant firms to “inadvertently” breach rules and regulations, said Laura Corrigan, senior associate in the disputes and investigations division of A & L Goodbody. This can potentially give rise to civil or even criminal liability for individuals within the business.
In a discussion on the EU sanctions regime imposed on Russian citizens and assets after the Ukraine invasion, Maya Lester, a barrister at Brick Court Chambers in the UK, said there are few areas of legal debate where “the basic rules are subject to such a great degree of uncertainty” than sanctions. The test for establishing who has control of an asset “is unbelievably broad and hard to apply”, yet there is “strict liability for companies and financial institutions that get it wrong. I think this is a very, therefore, problematic area.”
Dario Dagostino, co-head of A & L Goodbody’s disputes and investigations group, said the law firm was “delighted” with the attendance at Wednesday’s event, which “offered a valuable platform to exchange ideas and share knowledge that benefits the wider business community”.