Catherine Murphy (Kildare North, Social Democrats)
Link to this: Individually | In context | Oireachtas source

132. To ask the Minister for Enterprise, Trade and Employment if his Department has reviewed the number of financial transactions over the past 12 months which would have met the threshold of a notifiable transaction under the proposed Screening of Third Country Transactions Bill 2022; if so, the number of total transactions which would have met those requirements; and the estimated number of transactions that his Department expects to be notified of annually once this legislation has been enacted. [45966/22]

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My Department has reviewed the limited, real-time detailed data publicly available on merger and acquisition (M&A) activity, and individual foreign direct investment (FDI) transactions. Officials in the Department are currently looking at a range of specialised private firms that specialise in collecting and collating such data. The Department expects to go to the market later in the year to request tenders to supply access to a detailed database providing comprehensive data on a range of M&A and FDI transactions – this is a key step in progressing the implementation of the proposed investment screening regime.

In advance of acquiring access to such a database, the Department and its Agencies have maintained a watching brief in relation to investment coming into Ireland from third countries. The purpose of this has been to identify transactions that might potentially represent a risk to security and public order, rather than an attempt to predict the number of transactions that might be subject to screening. I am happy to say that so far, we have not identified any completed third country transactions in Ireland that we believe might represent a significant risk to security or public order.

In preparation for implementing a screening regime, officials from my Department have undertaken significant work to estimate the number of transactions that might require notification and screening, based on the mandatory regime proposed in the Screening of Third Country Transactions Bill 2022.

Based on this work, it is anticipated that only a small number of investments, mergers or transactions might pose a risk to our security and public order. Accordingly, to maintain our attractiveness to investors, our investment screening mechanism must be proportionate and tailored to these risks, without undermining Ireland’s attractiveness to inward FDI more generally.

Based on the limited data available, there are relatively few transactions that would meet both the criteria requiring screening whilst also representing a potential threat to security and public order. Officials estimate that fewer than 100 third country transactions per year will require notification.

Looking at 2021 data from William Fry, there were approximately 172 inbound M&A deals, worth over €19 billion. These 172 deals include Irish and intra-EU deals. Excluding these intra-EU transactions, there remain approximately 118 transactions which potentially might have been screened.

Of course, some of these investments relate to non-sensitive sectors and would not raise any concerns. Therefore, excluding such non-sensitive transactions - relating for example to transactions in the leisure sector - brings the total number of third country transactions in potentially relevant sectors and activities to below 100 per annum.

Of these, third-country, non-EU transactions, approximately one third tend to be accounted for by US investments, and another third are accounted for by UK investments.

Another potential guide to screening activity is the work of The Competition and Consumer Protection Commission (CCPC). The CCPC received 41 merger notifications in 2020, and 81 in 2021. It is important to note, however, that the CCPC are looking at mergers from a competition perspective, whereas the investment screening provisions relate to security and public order.

Officials continue to consult with colleagues across the EU on this matter, and so far, based on these discussions, the expected quantum of notifications appears robust.