On November 27, 2023, the Minister responsible for FDI control in the Netherlands updated Parliament on the state of Dutch FDI review[1], including statistics on the number of notifications and investigations.  This is the first official update since the entry into force of the general FDI regime.  The next update is expected in Q1 2024.

Dutch FDI review in a nutshell.  As explainedin our earlier alert, Dutch FDI review originally only comprised of sector-specific regimes in electricity, gas, and telecommunications, which have been in force for a number of years.  In June 2023, a complementary general FDI regime covering (in)direct investments in companies in the Netherlands by European (including Dutch) and non-European investors was introduced.  The general regime[2] covers investments in companies established in the Netherlands that:

  1. provide vital services, the continuity of which is vital to Dutch society[3];
  2. manage/operate a business campus; or
  3. are active in (highly) sensitive technology, including dual-use goods, military goods, and a number of specific technologies.[4]   

The various regimes are enforced by the Bureau for Investment Screening (Bureau Toetsing Investeringen or “BTI”), part of the Ministry of Economic Affairs and Climate Policy.  The BTI also acts as the point of contact under the EU FDI cooperation mechanism.

Statistics.  The various statistics included in the update confirm an active enforcement regime, in particular for the Vifo Act:

Number of notifications.  Between October 2022 and September 2023, 37 notifications were made.  Almost 75% related to the Vifo Act.  Compared to seven and four notifications in previous reporting periods, the entry into force of the general FDI regime represents a significant uptick in notifications.[5]  Interestingly, one of the five telecom notifications related to new facts and circumstances, which triggered the reopening of an earlier investigation. 

Number of investigations.  The BTI’s investigative practice also confirms the impact of the Vifo Act.  Between January 2019 and September 2023, the BTI concluded 49 investigations.  Despite only having entered into force in the last four months of the reporting period, one third (15) of the investigations related to the Vifo Act.  None of the BTI’s investigations during the reporting period resulted in a prohibition decision, and only one investigation resulted in a conditional approval.  All other investigations were approved unconditionally.

Limited retroactive application.  Uponthe entry into force of the Vifo Act, the Minister’s ability to retroactively request notification of transactions involving vital services and sensitive technology targets that closed after September 8, 2020 but before the entry into force of the Vifo Act on June 1, 2023 raised concern around the legal certainty of completed transactions.  This retroactive call-in option — which would only be used sparingly and if a transaction raised serious national security concerns —exists until the end of January 2024.  The Minister has now clarified that retroactive application in the technological sector (which is not a “vital service”) is limited to companies active in dual-use technology and/or military goods.  Consequently — and in contrast to earlier messages that it would be reviewed — the acquisition of Nowi, a Dutch microchip startup, by Chinese-owned semiconductor maker Nexperia’s cannot be called in for review. 

[1]             Letter from the Minister of Economic Affairs and Climate Policy to the Dutch Parliament, November 27, 2023, nr. 30.  Available in Dutch at:  www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2023D47221&did=2023D47221.

[2]             This is governed by the Act on Security Screening of Investments, Mergers and Acquisitions (“Vifo Act”).

[3]             These include (i) heat networks; (ii) nuclear energy; (iii) energy extraction; (iv) gas storage; (v) air transport (including Schiphol airport, ground-handling services, and KLM); (vi)  activities related to the Rotterdam Port; (vii) banks with registered offices in the Netherlands; and (viii) certain financial market infrastructure providers, such as trading platforms.  Additional services may be designated as “vital” by decree.

[4]             Quantum technology, photonic technology, semiconductor technology, and high-assurance technology products.

[5]             Between (1) October 2020 and September 2021, and (2) October 2021 and September 2022, the BTI received seven and four notifications, respectively.  Letter from the Minister of Economic Affairs and Climate Policy to the Dutch Parliament, October 12, 2021, nr. 8.  Available in Dutch at: www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2021D38197&did=2021D38197.  Letter from the Minister of Economic Affair and Climate Policy to the Dutch Parliament, November 3, 2022, nr. 29.  Available in Dutch at: www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2022D45081&did=2022D45081.