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In response to tense geopolitical developments, more and more countries implement a system of foreign direct investment screening to protect national security. The Netherlands recently introduced two FDI screening mechanisms that will have significant impact on the transaction practice and apply to both domestic and foreign investors. To help you assess what the implications for your transactions will be and to gain insights on these new Dutch regulations, take a look at our helpful infographic on the subject, read our new edition of Quoted or listen to our new podcast FDI screening in the Netherlands.

Today (19 April 2022), the new Dutch general (F)DI screening mechanism – Wet veiligheidstoets investeringen, fusies en overnames (Wet Vifo) – has been adopted by the House of Representatives. Wet Vifo will apply to certain investments in vital providers and companies active in the area of sensitive technology.

Certain providers of:

  • transport of heat;
  • nuclear installations;
  • air transport;
  • port activities;
  • banking services;
  • infrastructure for the financial markets;
  • extractable energy; and
  • management activities of tech business campuses,

are considered as vital providers under Wet Vifo.

Companies active in the area of sensitive technology include in any case providers of strategic goods (dual-use and military) of which the export is subject to export controls.

Investments in vital providers and companies active in the area of sensitive technology can lead to national security risks (such as the disruption of vital processes and the creation of strategic dependencies).

Wet Vifo must still be approved by the Senate before it can take effect. It is expected that Wet Vifo will enter into force later this year. Wet Vifo has partially retroactive effect as of 8 September 2020. Transactions that have taken place after 8 September 2020, but before the entry into force of the new regime only have to be notified upon request of the Minister.

On 13 April 2022, we were present at the parliamentary debate regarding Wet Vifo. A number of relevant changes/insights emerged that are worth mentioning.

First, an amendment has been adopted on the basis of which managers of tech business campuses are qualified as vital providers under Wet Vifo.

Second, during the debate reference was made to a vitality assessment of the Dutch food security and supply system. The results of this assessment could lead to certain parts of the food system being designated as vital under Wet Vifo. That would mean that an additional category of vital providers will be included in Wet Vifo that will need to be separately adopted at a later stage.

Third, The Minister indicated that an additional and therefore separate sector specific investment test for the defense sector is currently in the making. The draft legislation is supposed to go into internet consultation later this year.

Fourth, the Minister has promised to schedule an initial evaluation moment after two years of entry into force (in addition to the planned evaluation after five years).

New FDI screening mechanisms in the Netherlands

The Netherlands has introduced two FDI screening mechanisms: the General FDI Screening Mechanism and the Act Undue Influence Telecommunications. The first, the General FDI Screening Mechanism, has not entered into force yet, but will be partly retroactive from 8 September 2020. The Act Undue Influence Telecommunications however, has already entered into force in October 2020. To help you assess whether your transaction falls under the scope of the new FDI screening regulations and what that entails, our Competition & Regulatory experts have developed a helpful infographic. You can find it in the link below.