Investors from outside of the EU, EEA and Switzerland will need to contend with Ireland’s new Foreign Direct Investment (FDI) screening mechanism when it comes into effect in September. The mechanism will empower the Minister for Enterprise to assess, investigate, authorise, mitigate or prohibit FDI into Irish assets and businesses in certain 'sensitive' sectors. When certain statutory thresholds are met, it will be compulsory for the parties to notify a transaction to the Minister. Failure to notify a notifiable transaction can attract penalties of up to a €4m fine and/or a jail sentence for up to 5 years. Moreover, the transaction cannot be completed. Separately, the Minister may retrospectively 'call-in' deals for review under the mechanism. Investors should plan early on how to navigate the mechanism. FDI screening-related provisions should be built into the transactional documents, for example, appropriate warranties, pre-conditions and long-stop dates.
Published date: 24 July 2024
