Screening of Third Country Transactions Act 2023

Screening of Third Country Transactions Act 2023

Key terms and definitions

Some of the key terms include:

• A “third country”, is anywhere other than the Republic of Ireland, an EU Member State, an EEA Member State or Switzerland.
• A "third country undertaking” is an entity that is:
  • • A “third country”, is anywhere other than the Republic of Ireland, an EU Member State, an EEA Member State or Switzerland.
    • A "third country undertaking” is an entity that is:
    • Constituted or otherwise governed by the laws of a third country
    • Controlled by at least one director, member, or another person who is ordinarily resident in a third country , or
    • A natural person or partnership that is ordinarily resident in a third country.
• "Transaction” means any acquisition, agreement or other economic activity resulting in:
  • A change in control of an asset in the State, or
  • The acquisition of all or part of, or of any interest in, an undertaking in the State.
• "Asset in the State” means:
  • • In the case of a tangible asset, an asset which is physically located within the territory of the State, and
    • In the case of an intangible asset, an asset which is owned, controlled or otherwise in the possession of an undertaking in the State.
• "Undertaking in the State” means an undertaking that:
  • Is constituted or otherwise governed by the laws of the State, or
  • Has its principal place of business in the State.

When must a transaction be notified to the Minister?

The following four criteria must be met for a transaction to be mandatorily notifiable:

• A third country undertaking, or a person connected with a third country undertaking, as a result of the transaction:
  • • Acquires control of an asset or undertaking in the State, or
    • Changes the percentage of shares or voting rights it holds in an undertaking in the State from 25% or less to more than 25%, or from 50% or less to more than 50%.
  • The cumulative value of the transaction and each transaction between the parties to the transaction, or connected persons, in the 12-month period preceding the transaction, is at least €2 million. The Guidance confirms that this threshold relates to the entire value of the transaction, ie the consideration being paid by the acquirer, including any international dimension that might include assets or undertakings not located in the State.
• The transaction is not an internal reorganisation where the same undertaking directly or indirectly controls all the parties to the transaction, and
• The transaction relates to, or impacts on, one or more of the matters referred to in Article 4(1)(a)-(e) of Regulation (EU) 2019/452, establishing a framework for the screening of foreign direct investments into the Union (EU Screening Regulation), namely, critical infrastructure, critical technologies and dual use items, the supply of critical inputs, access to or control of sensitive information, and freedom and pluralism of the media.

What sectors in Ireland will be affected by the Screening of Third Country Transactions Act 2023?

The FDI Act applies to a transaction that directly, or indirectly relates to, or impacts on, any of the following matters specified in the EU Screening Regulation:

• Critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure. As Ireland has not yet published a list of identified and designated critical infrastructure, the Guidance notes that potential investors should refer to the definitions included in Annex 1 of EU Directive 2022/2557 (CERD) when determining if a transaction meets the threshold for mandatory notification. Investors and parties to transactions dealing with cybersecurity issues must also be cognisant of entities in scope of Directive (EU) 2022/2555 (NIS 2).
• Critical technologies and dual use items. The Guidance notes that a technology is considered critical, and within scope, if it relates to technologies including AI, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies, as well as nanotechnologies and biotechnologies. The Guidance also clarifies that dual use items listed in Annex 1 of the EU’s Dual Use Regulation (Council Regulation 2021/821), and military technology or equipment covered by the EU’s Common Military List (Council Common Position 2008/944/CFSP) fall within the mandatory scope of the FDI Act.
• Supply of critical inputs including, but not limited to, energy, raw materials, food security, and medicines that are essential for the proper functioning of the EU healthcare system and whose shortage would lead to an interruption in treatment and thus serious harm to patients.
• Access to sensitive information, including personal data, or the ability to control that information. The Guidance states that sensitive information is data that must be protected from unauthorised access and may be business, government or personal data (interpreted in accordance with the definition of Special Category Data under the GDPR). The Guidance helpfully provides that a transaction is only in scope if the sensitive data is held as an essential or critical part of the target business or asset, i.e. not only relating to employees, In determining whether the sensitive data held is essential or critical, it should be considered whether:
  • The volume of such data is “substantial”, or
  • The transaction relates to a business model that depends on generating turnover from such sensitive data.
• The freedom and pluralism of the media. This category includes media businesses, as defined in the Competition and Consumer Protection Act 2014, as amended, operating, selling or otherwise active in the State. The Guidance clarifies that the level of activity of the media business in the State (based on sales, subscribers, viewers or other relevant metrics) must be substantive to trigger mandatory notification.

The Guidance helpfully confirms that an Irish nexus requirement applies to the above critical sectors. This means that the Irish target company must operate the “critical” element of the business, or the critical infrastructure or other assets must be located in Ireland.

Which parties to the transaction are obliged to notify?

The notification obligation rests on all parties to a transaction which meets the relevant criteria under Article 9(1) of the Act, unless they are not aware of the transaction. Second and subsequent parties to a transaction can be deemed to have complied with their notification obligation where certain notice requirements set out in the FDI Act are satisfied. The FDI Act does not specify which of the parties to a notifiable transaction must notify the Minister; all that is required is that the Minister is notified at least 10 days before the transaction completes. The Guidance confirms that only one notification per transaction is required and the Department expects the buyer to take primary responsibility for the notification.

A transaction satisfying the mandatory criteria must be notified to, and approved by, the Minister prior to completion of the transaction. The Guidance suggests that parties may submit a notification on the basis of a “good faith intention” to complete a transaction.

How does the review and approval process work?

When a notification is made, the Inward Investment Screening Unit (IIS Unit) will first assess whether the notification form has been fully completed and whether the transaction meets the mandatory requirements for screening. Once this initial assessment is completed, the IIS Unit will issue either a ‘no screening required letter’, which means that the transaction does not meet all of the mandatory requirements for screening, or a Screening Notice.

If the IIS Unit issues a Screening Notice, it means that it is accepting jurisdiction over the transaction and that the transaction will enter the screening process. The Minister is required to make a screening decision within 90 calendar days of the Screening Notice. The 90 days may be extended to 135 calendar days, by way of an ‘Extension Notice’, at the discretion of the Minister.

The review period is suspended by the issuance of a ‘Notice of Information’ and resumes on the date that the notice is deemed to be complied with. During the screening process, the Minister decides if the transaction affects, or would be likely to affect, the security or public order of Ireland. The Minister is assisted by an Advisory Panel.

After assessing a notification, the Minister issues a 'Screening Decision'

• • Authorising the transaction
  • Imposing conditions, e.g. structural or behavioural remedies, on the transaction or the parties, or
  • Prohibiting the transaction.

Can the Minister review a transaction even if it has not been notified or does not require to be notified?

Yes, if the Minister has reasonable grounds for believing that a transaction affects, or would be likely to affect, the security or public order of Ireland. This ‘call in’ power applies whether or not a transaction has been completed. It applies to both non-notifiable transactions and to notifiable transactions that were not notified. The Guidance clarifies that this power is aimed at new or emerging technologies or sectors that are not captured by the mandatory notification criteria set out in the FDI Act.

The Minister must exercise the ‘call in’ power within 15 months of the transaction being completed in the case of non-notifiable transactions. In the case of notifiable transactions which have not been notified, the Minister is required to exercise the ‘call in’ power within five years from the date of completion, or six months from the date on which the Minister became aware of the transaction, whichever is later.

The Minister cannot review any transaction that completed more than 15 months before the commencement of the FDI Act.

What are the penalties for non-compliance?

The FDI Act introduces a range of criminal offences, including for failing to notify a notifiable transaction, and for putting a transaction undergoing screening into effect prior to the Minister issuing a Screening Decision (i.e., gun jumping).

A person found guilty of an offence under the FDI Act may be liable, on summary conviction, to a Class A fine (i.e., a fine of up to €5,000) and/or to a term of imprisonment of up to 6 months. Alternatively, on conviction on indictment, a person may be liable to a fine not exceeding €4 million and/or to a term of imprisonment of up to 5 years.

Alignment with international standards

A revised EU Screening Regulation (EU) 2026/1386) was adopted in June 2026, which requires all EU Member State to formally adopt a FDI screening regime. The revised EU Screening Regulation will apply from January 2028, and seeks to harmonise screening mechanisms across the EU.

Early engagement on these and other questions is advisable. Please get in touch with a member of our Competition & Antitrust team for more information.

The content of these articles are provided for information purposes only and does not constitute legal or other advice.