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State adopting European law to screen ‘hostile’ foreign investment

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IDA Ireland's outgoing chief executive Martin Shanahan. Photograph: Steve Humphreys

IDA Ireland's outgoing chief executive Martin Shanahan. Photograph: Steve Humphreys

IDA Ireland's outgoing chief executive Martin Shanahan. Photograph: Steve Humphreys

A new law will give the government the power to reject foreign investment on board security and public order grounds and prevent “hostile actors” gaining a foothold here.

The government said the new Screening of Third Country Transactions Bill published on Tuesday “represents an opportunity to design and tailor a screening mechanism appropriate to Ireland’s needs”.

It’s being introduced to give effect to EU regulations.

The new law aims to prevent other countries from undertaking espionage here and from securing access information, data, systems, technologies or assets “that are of general importance to the security or public order of the State”.

The government has insisted the new law will adopt an approach that “balances Ireland’s continued attractiveness as a location for inward investment, with a robust, but proportionate screening mechanism that protects security and public order, and enhances the State’s ability to respond to potential threats”.

It will give powers to the Minister for Enterprise, Trade and Employment to allow them to “respond to threats to Ireland’s security or public order posed by particular types of foreign investment, and to prevent or mitigate such threats”.

“This Bill will provide Government with powers to protect security or public order from hostile actors using ownership of, or influence over, businesses and assets to harm the State,” the bill notes.

The new law, when enacted, will also establish an Investment Screening Advisory Panel to inform and assist the Minister in relation to the screening of specific foreign transactions and there will also be an appeals process.

Ireland has been a major beneficiary of foreign direct investment (FDI) for decades.

The IDA said this summer that the level of FDI in Ireland is at record levels this year.

But outgoing IDA chief executive Martin Shanahan warned of a dark horizon.

“Volatile markets, the future trajectory of the Russia-Ukraine war, inflation and monetary policy, ongoing disruption to global supply chains, UK-EU tensions and geopolitical developments are adding to the uncertainty in the global FDI environment,” he said.

But he remains optimistic about future opportunities.

“Notwithstanding the serious global challenges and uncertainties on the path ahead, FDI is well-placed to remain a vital contributor to Ireland’s prosperity and future success.” 

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