Update on the Vifo Act

The Netherlands' economic security policy is constantly evolving. In this context, the Investments, Mergers and Acquisitions (Security Screening) Act (Vifo Act) has been in force since 1 June 2023. The Act provides for a security assessment on the basis of which certain investments, mergers and acquisitions must be approved in advance by the Minister of Economic Affairs. For more information about the content and operation of the Vifo Act, please refer to my previous posts in this respect. In this news item, I provide an update on the Vifo Act.

Expansion of scope

At the end of 2024, the Dutch government proposed a draft amendment to expand the number of technologies requiring a security screening. The technologies currently covered by the Act are quantum technology, semiconductors, photonics, high-assurance products and dual-use and military goods. The technologies to which the Act will apply under the amendment are biotechnology, artificial intelligence, advanced materials and nanotechnology, sensor and navigation technology, and nuclear technology for medical use. The Minister argues that the expansion is necessary to limit the risk that Dutch vital processes could be disrupted through undesirable control, that sensitive technology could fall into the wrong hands or that risky strategic dependencies could arise.

The expansion of scope of the the Vifo Act is expected to enter into force in the second half of 2025.

Annual Report 2024

In May of this year, the Investment Assessment Bureau (BTI) published its annual report for the year 2024.

The BTI receives the notifications that various parties are required to submit under applicable legislation and regulations in the context of an investment, merger or acquisition, and investigates any associated risks to national security. In its annual report, the BTI looks back on, among other things, the application of the Vifo Act.

Investigations

In 2024, the BTI investigated 83 notifications, 61 of which were submitted under the Vifo Act. The remaining notifications were submitted under the Offshore Wind Energy Act, the Electricity Act 1998 and the Telecommunications Act. Based on the results of the investigations, unconditional approval was granted in 48 cases.

In four cases, the investigation led to a review decision. In three of these cases, the acquisition activity was allowed to proceed under certain conditions. In one case, the acquisition activity was prohibited by the Minister. The vast majority of the investigations concerned investors from the Netherlands. The top 10 countries where the investors are located include the United States, the United Kingdom, Luxembourg, France, Japan, Sweden, China and the United Arab Emirates.

Lead times

In 2024, all investigations were completed within the statutory time limit. A quarter of the investigations were completed within 35 days and half of all cases were completed within 36 to 72 days.

We will keep you informed of further developments.