Public consultation of the Investment Screening Act has ended
Published 31 March 2023
Category: Investors Regulation
On 8 March 2023, a proposal for changes of the Investment Screening Act (the “Act”) was submitted for public consultation. The Act has been in effect since 1 September 2021, and based on the experiences with the Act this far, as well as the situation in and around Denmark, amendments to the Act have been deemed necessary.
The considered changes to the Act mainly revolve around two areas:
- Public contracts: The application of the Act shall be expanded to also cover public contracts. Currently, public contracts are only subject to screening if they fall within the Act’s definitions of investments or special economic agreements. To further protect Danish infrastructure and national security, it is now considered that the contracting parties – regardless of domicile and nationality – shall apply for permission before entering public contracts within the energy sector, and the application shall also include information on the subcontractors. Over time the rules are expected to expand to other fields within critical infrastructure than the energy sector.
The proposal also includes a possibility for the Danish Ministry of Industry, Business and Financial Affairs to require early screening due to special circumstances and compelling societal considerations. This screening shall include all participants taking part in the public tender, as opposed to the ordinary procedure.
- Administrative procedures: The administrative case handling shall be divided into two stages. The case handling for uncomplicated matters shall be reduced to 45 working days (as opposite to 60 days today) from receipt of a complete application. In more complicated matters, a second stage case handling may be initiated after the first stage case, and in this stage the administrative case handling deadline shall be extended to 125 days and based on a more comprehensive application form. As today, overrun of the deadlines by the authorities will have no effect on the applicant’s legal position and will not result in automatic permission or similar.
The proposal is available (in Danish) here.
Next step: The public consultation period expired on 29 March 2023. If the proposal is adopted, it is expected to enter into force in the middle of 2023 whereas the expansion of the rules to other critical infrastructure than the energy sector will be decided on later in 2023. The rules will only apply to tenders initiated after the Act has entered into force. Currently, no transitional rules have been presented.