The Irish Screening of Third Country Transactions Act 2023 (the Act) entered into force on 6 January 2025, introducing mandatory notification and pre-clearance for in scope transactions.

The regime is operated by the Department of Enterprise, Trade and Employment (the Department). The Department has published Guidance on the Act (the Guidance) and a Notification Form and operates a Notification Portal for the upload of Notifications.

What is a third country?

Third country is defined as outside the EEA and Switzerland. The UK and the US are third countries.

Do you need to notify?

If you answer “yes” to each of the questions below, you will need to notify the transaction (Section 9).

• Is the target an Irish undertaking or asset?
• Is the purchaser a third country undertaking or its connected person? Note that notification is required where the direct investor or the ultimate owner of the direct investor is a third country undertaking (see Section 2.3 of the Guidance).
• Is the purchaser
  • acquiring control of the Irish undertaking or asset? (control is defined in accordance with EU and Irish merger control rules); or
  • moving from: a holding of ≤ 25% to > 25% shares or voting rights; or a holding ≤ 50% to > 50% shares or voting rights?

• Is the consideration at least €2 million?
• Are the parties separate undertakings, i.e. the transaction is not intra-group?; and
• Does the transaction relate to, or impact on, any of the following matters?

This is the most complex question and the Guidance refers the parties to various underlying legislation and advises them to focus on the target’s activities.

• critical infrastructure, including aerospace, communications, data processing, data storage, defence, electoral infrastructure, energy, financial infrastructure, health, media, sensitive facilities, transport, water, including related land and real estate. See further Directive (EU) 2022/2557 on the resilience of critical entities;
• critical technology, including AI, cybersecurity, defence storage, energy storage, robotics. See further Regulation (EU) 2021/821 on dual use export controls and Council Common Position 2008/944/CFSP;
• critical inputs, including energy, raw materials and food security. See further the European Commission list of Critical Raw Materials;
• access to sensitive information, including personal data; or
• the freedom or pluralism of the media. Here the Guidance refers parties to the definitions of “media plurality” and “media business” under the Irish media merger regime. Those who have dealt with this regime will know that the definition of “media business” lacks clarity and has been subject to different interpretations. Further, whereas notification under the Irish media merger regime is triggered where both purchaser and target are media businesses, the investment screening regime will be triggered where only the target business is a media business.

Notification process

When:

Parties must notify at least 10 calendar days before they complete (Section 10). In practice, parties may want to notify sooner given the anticipated review timeframes (see below). Unlike a CCPC merger control notification, notification to the Department will not trigger any public announcement and so the proposed transaction can remain confidential when notified. Further, there is no requirement in the Notification Form to include transaction documents, such as a signed SPA. In principle therefore, parties could notify early on in the transaction process. However, the Notification Form does require parties to describe how the target will be controlled post-transaction, and to state when the transaction is expected to complete, and so these issues will need to be settled prior to notification.

Who:

While all parties have a notification obligation, under Section 11, the parties can agree that one party will make the notification. The Guidance states that the Department expects that the purchaser will take the lead role in the notification.

How:

The Department has developed an online Notification Portal to manage the notification process. The Notification Form replicates the European Commission Form used to facilitate the exchange of information between Member States. Information required includes details of the parties and their activities, the planned date of completion, how the investment is funded, and whether the investor receives funding from a non-EU government. There is no requirement to submit internal documents or to submit transaction documents as arises in a merger control notification. There is no notification fee.

“Call in” powers

The Minister can “call in” any transaction under Section 12 where:

• the Minister has reasonable grounds to believe that the transaction affects, or would be likely to affect, the security or public order of the State; and
• where a third country undertaking acquires, or changes the extent to which, it has control over an asset or undertaking in the State.

In relation to a notifiable transaction, the Minister can call it in within:

• 5 years post-completion; or
• 6 months of the Minister becoming aware of the transaction.

In relation to a non-notifiable transaction, the Minister can call it in within:

• 15 months post-completion.

In addition, the Minister can call in any transaction completed in the 15 month period before the commencement of the Act, so any transaction completed on or after 6 October 2023.

The review process

The Minister’s first step upon receipt of a Notification will be to assess jurisdiction in respect of the proposed transaction. If the Minister accepts jurisdiction, he/she will issue a Screening Notice to the parties “as soon as practicable after commencing a review of a transaction” (Section 14). If the Minister declines jurisdiction, he/she will issue a letter to the parties confirming that mandatory notification does not apply.

The Minister must then make a Screening Decision on whether or not the transaction affects, or would be likely to affect, the security or public order of the State (Section 16). The Minister must do so within 90 calendar days of the Screening Notice. The Minister has discretion to extend this period to 135 calendar days. The fact that there is no statutory timeframe for the issue of the Screening Notice means that parties won’t have any control over the starting date of this period. It can only be hoped that the Minister will issue Screening Notices promptly and possibly engaging in pre-notification dialogue will give the parties greater visibility of the timing. Finally, the Guidance states that the Minister anticipates clearing many transactions more quickly than the 90 calendar day period.

The Minister may issue statutory information requests to the parties with minimum return periods of 30 calendar days (Section 19). The issue of a statutory information requests suspends the 90 (or 135) calendar days review timeframe. The 90 (or 135) calendar days resumes upon compliant submission of the information.

Where the Minister has made a Screening Decision that the transaction affects, or would be likely to affect, the security or public order of the State, the Minister may block the transaction but also has extensive powers to impose conditions (Section 18). These include structural and behavioural conditions and a requirement to pay the Minister’s costs in monitoring behavioural conditions.

Further information

Unlike in the merger control regime, the Department will not publish Screening Decisions and so parties will not have the benefit of this insight into the Department’s operation of the regime. As such, it would be helpful if the Department could publish practice notes.

If you would like to discuss any aspect of Ireland’s Investment Screening regime, please contact Sheila Tormey, Cormac Little SC or Claire Waterson of the Competition & Regulation Department.