Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

Tá sé iontach an Seanadóir Wilson a fheiceáil sa Chathaoir. Gabhaim buíochas leis an Teach as ucht an deis seo labhairt ar an mBille seo.

This Bill will empower the Minister for Enterprise, Trade and Employment to respond to threats posed by certain types of third country investments to our security and public order. It will permit the Minister to assess, investigate, authorise, condition or prohibit third country investments based on a range of security or public order criteria. As well as equipping the Irish State with the means to protect itself against threats arising from third country investments, the implementation of a screening mechanism will also provide reassurance to key trading partners that Ireland is a responsible global player, cognisant of the threat posed by strategic and potentially hostile state-backed investment strategies.

The international evidence suggests that the existence of a screening mechanism does not act as a deterrent to inward investment. Conversely, however, the absence of such a mechanism would do untold harm to Ireland’s reputation among key investors. Notwithstanding the overwhelmingly positive impacts of foreign investment, there is growing appreciation globally that, in some instances, foreign investment can be used as a tool by hostile actors to achieve a range of goals inimical to the interests of the State. For example, such goals might include acquiring access to or control over strategic and sensitive assets or technologies that facilitate disruption to core activities of the State or which permit espionage. Likewise, investment that results in the export of critical, cutting-edge technologies back to the home of the investor may represent a very real threat to our security and public order. The role played by third country state-owned firms is of particular importance in this regard.

This Bill was developed on foot of the adoption of the EU foreign direct investment, FDI, screening regulation. To date, there has been no formal investment screening mechanism for foreign investment in Ireland. The absence of such a screening mechanism leaves Ireland ill-equipped to respond to threats to our security or public order arising from third country investments. This screening Bill is designed to address this issue.

Establishing a formal investment screening mechanism represents an opportunity to design and tailor a system appropriate to Ireland’s needs. The approach set out in this Bill balances Ireland’s long-standing FDI strategy while acknowledging the challenge posed by potentially hostile investments. Risks may arise as a result of a wide variety of factors, for instance, based on the source of the investment or the characteristics of the party being acquired across a host of existing and emerging sectors and through a range of deal types regardless of value. Therefore, our mechanism must be flexible enough to respond to such threats while simultaneously providing as much certainty as possible to enterprise.

In response, the Bill, defines the nature, scale and types of investments that will be required to undergo investment screening and sets out the factors to be considered when applying screening to transactions. It is important to note the screening mechanism will consider investments through a security and public order lens. This is not about competitive or public interest tests. Other tools are available to the State to address such concerns. To maximise the effectiveness of the screening mechanism, it is vital to maintain this exclusive security focus.

Having outlined the background and purposes of the Bill, I will now outline some of the main provisions of the Bill. The Bill contains four Parts. Part 1 primarily deals with matters common to legislation, namely, commencement, interpretation, reporting obligations and services of documents. However, also contained within Part 1 are provisions on connected persons, the applicable offences and penalties, as well as provisions on any incurred expenses.

Part 2 relates to the notification process and the manner in which applicable transactions are reviewed. The Bill consists of a mandatory element and a discretionary element. Mandatory notification will apply to investments from third countries relating to particular sectors and technologies, based on Article 4 of the EU regulation. A range of other criteria relating to ownership and deal-size thresholds also apply, and these are expanded upon in the Bill.

In addition, the Minister will be able to initiate screening of other investments which do not require mandatory notification but which the Minister deems, on reasonable grounds, to pose a risk to security or public order. This ensures the screening system is flexible enough to adapt to changing economic and technological developments and allows the Minister to respond to deliberate attempts to circumvent the screening mechanism.

Section 9 outlines the types of transactions that must be notified to the Minister, while section 10 sets out the notification process itself. Section 12 sets out the requirement for the Minister to review both notified and non-notifiable transitions where the Minister believes such a transaction may impact security or public order.

Section 13 outlines the factors the Minister shall consider when reviewing the threat to security or public order posed by a particular transaction. These considerations include whether an investor is controlled by a third country government; the extent to which parties to the transaction are involved in activities related to security or public order; any evidence of criminality among the parties; the likelihood of the transaction resulting in actions that are disruptive or destructive to people, assets or undertakings in the State; and the views of the European Commission and other EU member states.

Under this section the Minister is also empowered to consult other Ministers or other relevant parties to inform the review process. The Minister also has the option to enter discussions with the parties to the transaction to mitigate any concerns relating to security or public order. Effectively, a transaction cannot be progressed once screening has commenced and until such point as the review has been completed. In general, the Minister has 90 days to complete the screening process, as per section 16.

Section 18 outlines the decisions available to the Minister on the outcome of a screening review. Where it deemed that a transaction poses a threat to security or public order, the Minister may allow the transaction to proceed subject to certain conditions being fulfilled or, where mitigation is not appropriate, the Minister may prohibit the transaction. Significant detail is provided throughout the Bill on the process, timeline and interaction between the parties to ensure fair process is adhered to at all times.

Part 3 consists of four Chapters and sets out the appeals mechanism open to the parties concerned. Significant thought has also gone into the development of the appeals procedures, balancing the need to ensure fair process with the security requirements of the State while also complying with recent case law. An initial independent adjudication process is provided for, and sections 22 to 25, inclusive, deal with all aspects of the appointment of adjudicators.

Sections 26 to 29, inclusive, set out the procedures for appealing a screening decision via the adjudication process. Sections 30 to 33, inclusive, contain provisions on how sensitive material and evidence is handled, ensuring the Minister can provide sensitive evidence to the adjudicator in a manner that protects national security and provides scope for hearings to be held in public where appropriate.

Sections 34 to 38, inclusive, deal with appeals against the decision of an adjudicator, ensuring parties to a transaction have the right of appeal to the courts against the finding of an adjudicator.Such an appeal may be made, by leave of the High Court on a point of law within 30 days of the adjudicator's finding. Similar provisions to safeguard sensitive evidence are set out in this regard, as apply to adjudication.

The final part of the Bill, Part 4, provides for the establishment of an advisory panel to assist the Minister in the decision-making process. This panel will be composed of senior civil servants from across a range of relevant Departments. It is essential that we enact this Bill to provide the State with the powers necessary to deter or mitigate the impact from hostile actors acquiring ownership of, or influence over businesses and assets in order to cause harm to the State. I believe the mechanism we have developed is tailored to suit Ireland’s needs, ensuring that we remain an attractive location for foreign direct investment, FDI, while being a safe and responsible location in which to do business. The Screening of Third Country Transactions Bill passed Final Stage in the Dail on Wednesday, 4 October. I thank the Oireachtas Committee on Enterprise, Trade and Employment and Opposition spokespeople for their input into that process. I now commend the Bill to the Seanad and look forward to constructive engagement with Senators on the matter.