Government proposal to Parliament: amendments to the Act on the Monitoring of Foreign Corporate Acquisitions
The Government proposes amendments to the Act on the Monitoring of Foreign Corporate Acquisitions to meet the requirements of the EU Regulation establishing a framework for the screening of foreign direct investments into the Union. In addition, amendments are proposed to clarify the scope of application of the Act. The starting point of the Act will continue to be a positive attitude to foreign ownership.
On 17 June 2020, the Government submitted to Parliament a proposal for an act amending the Act on the Monitoring of Foreign Corporate Acquisitions. The amendments are scheduled to enter into force on 11 October 2020.
The Act on the Monitoring of Foreign Corporate Acquisitions has been in force for eight years. The objective of the Act is to monitor and, where necessary, to restrict foreign ownership in companies being monitored, should an overriding national interest so require. An overriding national interest refers particularly to national defence, security of supply and functions vital to society.
“Because of the changes in the international security environment, it is also necessary to make sure that the national legislation in this field is up to date and to regularly assess its effectiveness in practice,” says Minister of Employment Tuula Haatainen.
New duties to the Ministry of Economic Affairs and Employment, more clarity on the application of the Act
The proposed amendments to the Act would increase the number of duties performed by the Ministry of Economic Affairs and Employment. From 11 October 2020 onwards, the Ministry would serve as the national contact point for cooperation and exchange of information between EU Member States and the European Union, and matters relating to the implementation of the EU Regulation establishing a framework for the screening of foreign direct investments.
The Act would include new provisions on the circumvention of the Act, imposing conditions to decisions of the Ministry of Economic Affairs and Employment regarding the approval of corporate acquisitions, inadmissibility of matters, and the disclosure of secret information to public authorities. In addition, it would be necessary to apply for an advance approval by the Ministry of Economic Affairs and Employment when making corporate acquisitions in the security sector.
Monitoring of corporate acquisitions increasingly important in crises
The public authority network led by the Ministry of Economic Affairs and Employment monitors foreign corporate acquisitions systematically. Monitoring is bound by time and carried out on a case-by-case basis. For example, in crises such as the COVID-19 pandemic, there may be more businesses than normally that are significant for functions vital to society.
“Measures have been taken to enhance the monitoring of corporate acquisitions in emergency conditions and to target monitoring at certain critical sectors in particular, such as businesses that could potentially produce personal protective equipment needed in the healthcare sector,” says Minister Haatainen.
Timo Nevaranta, Special Adviser, Ministry of Economic Affairs and Employment, tel. +358 295 047 232 timo.nevaranta(a)tem.fi Marjaana Aarnikka, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 50 338 4350 marjaana.aarnikka(a)tem.fi
Lasse Puroma, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 50 352 9585 lasse.puroma(a)tem.fi