Screening of Third Country Transactions Act 2023

PART 1 Preliminary and General

1. Short title and commencement

1. (1) This Act may be cited as the Screening of Third Country Transactions Act 2023.

(2) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

2. Interpretation

2. (1) In this Act—

“acquire”, in relation to control of an asset or of an undertaking, shall be construed in accordance with subsection (3);

“adjudicator” has the meaning given to it by section 22;

“advisory panel” has the meaning given to it by section 39;

“connected”, in relation to a person, shall be construed in accordance with section 3;

“control”, in relation to an asset or an undertaking, shall be construed in accordance with subsection (2);

“Minister” means the Minister for Enterprise, Trade and Employment;

“non-notified transaction” means a notifiable transaction of which the Minister is not notified in accordance with section 10;

“notice of information” has the meaning given to it by section 19;

“notifiable”, in relation to a transaction, shall be construed in accordance with section 9;

“notified transaction” means a transaction of which the Minister is notified in accordance with section 10;

“prescribed” means prescribed by regulations made by the Minister under this Act;

“Regulation” means Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019[^2] establishing a framework for the screening of foreign direct investments into the Union;

“relevant material” means any decision, evidence, document, material or any other matter that—

(a) is relevant to an appeal under section 27 or 34, any further appeal following such an appeal, an application under section 35 relating to such an appeal, or judicial review proceedings relating to a screening decision or the decision of an adjudicator,

(b) is not publicly available, and

(c) relates to the security or public order of the State;

“screening decision” has the meaning given to it by section 16;

“screening notice” has the meaning given to it by section 14;

“third country” means a state or territory other than—

(a) the State,

(b) a Member State,

(c) a state or territory, not being a Member State, that is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992 as adjusted by the Protocol signed at Brussels on 17 March 1993, and

(d) Switzerland;

“third country national” means—

(a) a natural person who is ordinarily resident in a third country, or

(b) an unincorporated group or partnership of natural persons at least one of whom is ordinarily resident in a third country;

“third country undertaking” means an undertaking that is—

(a) constituted or otherwise governed by the laws of a third country,

(b) controlled by at least one director, partner, member or other person, that—

(i) is a person referred to in paragraph (a), or

(ii) is a third country national,

or

(c) a third country national;

“transaction” means any acquisition, agreement or other economic activity resulting in—

(a) a change in control of an asset in the State, or

(b) the acquisition of all or part of, or of any interest in, an undertaking in the State;

“undertaking” includes any person (including an individual, a body corporate, a partnership or any other unincorporated body of persons) engaged for gain in the production, supply or distribution of goods, the provision of services, the making or holding of investments or the carrying out of any other economic activity, but does not include a natural person whose role in such activities is limited to working under a contract of employment or a contract for services for an undertaking.

(2) In this Act, a person shall be regarded as exercising control of—

(a) an asset, where that person has ownership of, or the right to use, all or part of the asset, and

(b) an undertaking, where that person can exercise decisive influence over the activities of the undertaking by any means, including as a consequence of—

(i) the existence of rights or contracts conferring decisive influence on the composition, voting or other commercial decisions of the undertaking, or

(ii) ownership of, or the right to use, all or part of the assets of the undertaking.

(3) In this Act, control of an asset or of an undertaking shall be regarded as being acquired by a person who gains an ability to exercise control of the asset or of the undertaking for the first time or to a greater extent.

(4) In this Act, the circumstances in which an asset shall be regarded as being in the State include—

(a) where it is physically located within the territory of the State, and

(b) in the case of an intangible asset, where it is owned, controlled or otherwise in the possession of an undertaking in the State.

(5) In this Act, an undertaking shall be regarded as being in the State where it—

(a) is constituted or otherwise governed by the laws of the State, or

(b) has its principal place of business in the State.

3. Connected persons

3. (1) For the purposes of this Act (and without prejudice to subsection (2)), a person is connected with a third country undertaking if the person is—

(a) a spouse, civil partner, parent, sibling or child of a relevant person,

(b) acting in the capacity as the trustee of any trust, the principal beneficiaries of which are—

(i) a relevant person,

(ii) a person referred to in paragraph (a), or

(iii) an undertaking controlled by a relevant person,

or

(c) in partnership with a relevant person.

(2) Without prejudice to the application of section 18(c) of the Interpretation Act 2005 to subsection (1)(b), a body corporate shall also be, for the purposes of this Act, connected with a third country undertaking if it is controlled by the third country undertaking or by another undertaking that is controlled by that third country undertaking.

(3) In this section—

“child”, in relation to a relevant person, shall be deemed to include a person who—

(a) is a child of the relevant person’s civil partner, and

(b) ordinarily resides with the relevant person;

“civil partner” has the meaning given to it by the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010;

“relevant person”, in relation to a third country undertaking, means—

(a) where the third country undertaking is an individual, that individual, or

(b) where the third country undertaking is not an individual, a third country national who exercises control over the undertaking.

4. Reporting on operation of Act

4. (1) The Minister shall—

(a) cause a report to be prepared on the operation of this Act not more than 15 months after this section comes into operation, and not less than once every 12 months thereafter, and

(b) cause a copy of such report to be laid before each House of the Oireachtas as soon as practicable after it has been prepared.

(2) A report prepared under this section shall, subject to subsection (3), include—

(a) aggregated details on the number of transactions notified to the Minister under this Act,

(b) aggregated details on the number of non-notified transactions reviewed by the Minister under this Act,

(c) aggregated details on the actions taken by the Minister in respect of transactions in relation to which a screening decision has been made,

(d) information on sectoral trends of, and third countries involved in, transactions reviewed by the Minister under this Act, and

(e) all other matters relating to the operation of the Act that the Minister considers to be relevant.

(3) A report prepared under this section shall not include—

(a) commercially sensitive information,

(b) personal data (within the meaning of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016[^3] on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation)), or

(c) information the disclosure of which could create a risk to the security or public order of the State.

5. Regulations

5. (1) The Minister may by regulations provide for any matter referred to in this Act as prescribed or to be prescribed.

(2) Without prejudice to any provision of this Act, regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Minister to be necessary or expedient for the purposes of the regulations.

(3) Every regulation under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House sits after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

6. Offences and penalties

6. (1) A person guilty of an offence under this Act, other than under section 28(5), shall be liable—

(a) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 6 months, or to both, or

(b) on conviction on indictment, to a fine not exceeding €4,000,000 or to imprisonment for a term not exceeding 5 years, or to both.

(2) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851, summary proceedings for an offence under this Act may be instituted at any time within two years from the date on which the offence was alleged to have been committed.

(3) Where an offence under this Act is committed by a body corporate or other undertaking and is proved to have been so committed with the consent or connivance of, or to be attributable to any wilful neglect on the part of any person, being a director, manager, secretary or other officer of the body corporate or undertaking, or a person who was purporting to act in any such capacity, that person, as well as the body corporate or undertaking, commits an offence and shall be liable to be proceeded against and punished as if the person were guilty of the first-mentioned offence.

7. Expenses

7. The expenses incurred in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Public Expenditure, National Development Plan Delivery and Reform, be paid out of monies provided by the Oireachtas.

8. Service of documents

8. (1) A notice or other document that is required to be served on or given to a person under this Act shall be addressed to the person concerned by name, and may be so served on or given to the person in one of the following ways:

(a) by delivering it to the person;

(b) by leaving it at the address at which the person ordinarily resides or, in a case in which an address for service has been furnished, at that address;

(c) by sending it by post in a prepaid registered letter to the address at which the person ordinarily resides or, in a case in which an address for service has been furnished, to that address;

(d) by electronic means, in a case in which the person has given notice in writing to the person serving or giving the notice or document concerned of his or her consent to the notice or document (or notices or documents of a class to which the notice or document belongs) being served on, or given to, him or her in that manner.

(2) For the purpose of this section, a company formed and registered under the Companies Act 2014 or an existing company within the meaning of that Act is deemed to be ordinarily resident at its registered office, and every other body corporate and every unincorporated body of persons shall be deemed to be ordinarily resident at its principal office or place of business.

PART 2 Notification and Review of Transactions

9. Notifiable transactions

9. (1) A transaction is notifiable where it satisfies each of the following criteria:

(a) a third country undertaking, or a person connected with such an undertaking, as a result of the transaction—

(i) acquires control of an asset or undertaking in the State, or

(ii) changes the percentage of shares or voting rights it holds in an undertaking in the State—

(I) from 25 per cent or less to more than 25 per cent, or

(II) from 50 per cent or less to more than 50 per cent;

(b) the cumulative value of the transaction and each transaction between the parties to the transaction, or persons connected with third country undertakings that are parties to the transaction, in the period of 12 months before the date of the transaction is equal to or greater than—

(i) where no amount stands prescribed under subsection (2), €2,000,000, or

(ii) the amount that stands prescribed under subsection (2);

(c) the same undertaking does not, directly or indirectly, control all the parties to the transaction;

(d) the transaction relates to, or impacts upon, one or more of the matters referred to in points (a) to (e) of Article 4(1) of the Regulation.

(2) The Minister may, where it is necessary to do so in order to—

(a) provide for the more effective review of transactions under this Act,

(b) respond to variations in economic, political or social conditions affecting transactions that, but for subsection (1)(b), would be notifiable, or

(c) improve the security or public order of the State,

prescribe an amount for the purposes of subsection (1)(b).

10. Requirement to notify Minister of transaction

10. (1) Subject to subsection (2) and section 11, the parties to a notifiable transaction shall, not less than 10 days before the date on which the transaction is completed—

(a) notify the Minister of the transaction, and

(b) when notifying the Minister under paragraph (a), provide the Minister with the following information in relation to the transaction:

(i) the identities of the parties (including, where applicable, name, trading name, registered address, domicile, NACE classification code, registered office and registration number);

(ii) the ownership structure of the parties to the transaction, including information on persons participating in the capital of the undertaking;

(iii) the approximate value of the transaction;

(iv) information on the products, services and business operations of the parties to the transaction;

(v) the nature of the economic activities carried out in the State by the parties to the transaction;

(vi) the funding of the transaction and its source;

(vii) the date on which the transaction is proposed to be completed;

(viii) the state or territory under whose laws the parties are constituted, registered, or otherwise organised;

(ix) the Member States in which the parties carry out economic activities;

(x) the annual turnover and total number of employees of each party;

(xi) details of any sanctions and restrictive financial measures imposed on the parties, and on persons connected with a third country undertaking that is a party, by the European Union or by the United Nations;

(xii) details of any convictions of a party, and of persons connected with a third country undertaking that is a party, by the International Criminal Court;

(xiii) details of any convictions of a party, and of persons connected with a third country undertaking that is a party—

(I) on indictment (other than a spent conviction within the meaning of section 5 of the Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016) by a court in the State, and

(II) in a state or territory other than the State, in respect of which a sentence of at least 12 months’ imprisonment was imposed and that is not a spent conviction (within the meaning of section 5 of the Criminal Justice (Spent Convictions and Certain Disclosures) Act 2016, save that references in that section to a “court” shall be construed as references to the court or body that convicted the party or connected person in the state or territory concerned);

(xiv) any other information that is necessary for the Minister to review the transaction under this Act.

(2) A party to a transaction shall not be required to comply with subsection (1) where it is not aware of the transaction.

(3) Subject to subsection (2) and section 11, where a party to a notifiable transaction fails to comply with subsection (1)(a) before the transaction is completed—

(a) the transaction shall be deemed to be subject to a screening decision that the transaction affects, or would be likely to affect, the security or public order of the State, and

(b) such screening decision shall be deemed to have been made on the day before the date on which the transaction is completed.

(4) A person who—

(a) fails to comply with subsection (1), or

(b) in purported compliance with subsection (1), provides the Minister with information that the person knows to be false in a material particular, or is reckless as to whether or not it is false in a material particular,

shall be guilty of an offence.

11. Deemed compliance with requirement to notify Minister of transaction

11. (1) A party to a transaction (in this section referred to as the “first party”) may, before complying with section 10(1), provide one or more other parties to the transaction (each of which is, in this section, referred to as a “second party”) with a notification in writing—

(a) informing the second party that it intends to so comply,

(b) specifying the date on which it intends to so comply, and

(c) setting out all the information that it intends to provide to the Minister in accordance with section 10(1).

(2) Where the second party agrees, by written notice to the first party and before the date specified in subsection (1)(b), that it is satisfied with the information provided under subsection (1), the second party shall be deemed to comply with section 10(1) to the same extent that it is complied with by the first party.

(3) Where the first party—

(a) having been notified of the agreement of the second party under subsection (2), and

(b) in purported compliance with section 10(1),

provides the Minister with information that is materially different to the information it provided to the second party under subsection (1)—