Update: Bill on the security screening of investments, mergers and acquisitions


In previous news items, I have discussed the bill on the security screening of investments, mergers and acquisitions (the Vifo Act). In my news item of 22 September 2021 I reported that the Vifo Act, together with the explanatory memorandum, had been submitted to the Lower House on 30 June 2021. On 19 April 2022, the Vifo Act was adopted by the Lower House and on 17 May 2022, the Vifo Act was passed by the Senate.

The Vifo Act in short:
The Vifo Act concerns the control and mitigation of risks to national security that may arise from acquisition activities such as investments made in, mergers with and acquisitions of Dutch companies. The Vifo Act applies and is applicable to certain acquisition activities (further specified therein) if these activities relate to (i) Dutch companies that are regarded as vital providers or (ii) Dutch companies that are active in the field of sensitive technology. Both the target company and the acquirer have a duty to report a proposed investment, merger or acquisition to the Investment Assessment Agency. The Investment Assessment Agency will assess the notification on the basis of the possible risks for national security. If the assessment shows that the investment, merger or acquisition entails risks to national security, the Minister of Economic Affairs and Climate may make the assessment decision subject to certain requirements or attach conditions to the decision in order to limit those risks to an acceptable level. In extreme cases, the Minister may prohibit an investment, merger or acquisition.

The investment, merger or acquisition may not take place before the Minister has taken an assessment decision or announced that no assessment decision is required.

Enhanced scope and entry into force of the Vifo Act
Following an amendment to the original bill, the Vifo Act will, in addition to investments in companies that are seen as vital providers or as companies active in the field of sensitive technology, also apply to companies managing business campuses. This amendment is intended to limit national security risks that could arise if a business campus, where public-private technological cooperation of importance to the Netherlands takes place, were to fall into the hands of undesirable parties.

The Vifo Act is expected to enter into force towards the end of 2022, with retroactive effect from 8 September 2020.