News Update FDI

On 14 December 2021, the Dutch Minister of Economic Affairs and Climate Policy presented the House of Representatives with a memorandum of amendment for the Investment Screening Bill (wetsvoorstel Wet veiligheidstoets investeringen, fusies en overnames, “ISB”).

The amendments proposed in the memorandum were triggered by questions from the House of Representatives regarding the initial version of the ISB, which was published on 2 July 2021 (see our 6 July 2021 News Update). These questions are also discussed at some length in the memorandum accompanying the amendments.

Proposed amendments to the ISB

The principal amendments now proposed are:

• further clarification of the threshold for “significant influence”: shareholdings of 10%, 20% or 25% can apply. The 10% threshold is the default; higher thresholds can be incorporated in Ministerial Decrees;
• textual clarification on thresholds for notification: in respect of significant influence, both the acquisition and the increase thereof are notifiable; in respect of control, only the acquisition is notifiable (as under merger control);
• additional exceptions to the scope of the ISB’s applicability: the acquisition of participations in target companies by buyers established under instructions by the Dutch Central Bank (in the course of supervision of monitoring failing banks or insurance companies) is not notifiable;
• clarification of time limits during the notification process: the decision periods for Phase I and Phase II are eight weeks each; both can be extended by a shared six months. Hence the maximum decision period is eight weeks + eight weeks + six months (excluding standstill and three months if the EC must be involved);
• introduction of the possibility for review at delisting: the responsible minister may ask the Dutch Investment Review Agency (Bureau Toetsing Investeringen, “BTI”) to perform a new review when a buyer acquires and subsequently delists a publicly traded company, even if the original acquisition was already reviewed and approved; and
• clarification on risk factors: only criminal offences (as opposed to minor offenses) will be considered when assessing the risk that a buyer poses to national security.

Further clarifications

In addition to these actual changes to the ISB, questions from the House have also produced other clarifications, most importantly:

• the scope of the ISB does not extend to suppliers of companies that fall under the ISB; and
• studies are currently underway to determine whether the healthcare sector, the road or rail infrastructure and agricultural land should be qualified (in whole or in part) as vital processes that fall under the ISB. However, the retroactive effect of the ISB will not extend to newly added vital processes or sensitive technologies (see our previous update).