Mandatory screening for investments posing a risk to national security

The government can assess investments and acquisitions that pose a risk to national security. Under the security screening (the Vifo Act), a notification obligation applies to certain sectors and technologies: you must report a proposed transaction, and the government can assess it, impose conditions, or even block it.

National security and investments

At a time when national security is high on the agenda, the government wants to prevent strategic companies and technology from falling into the wrong hands. Therefore, there is an investment screening mechanism: a check on investments, mergers, and acquisitions that could affect national security.

Who does the test apply to?

The security test focuses on transactions involving vital providers, managers of certain business campuses, and enterprises using sensitive technology. If your transaction falls under the regulation, you must notify the competent authority in advance and, in principle, may not complete it until the test has been completed.

What can the government do?

Following a notification, the government assesses whether there is a risk to national security. It may approve the transaction, attach conditions to it (for example, to protect sensitive knowledge), or, in extreme cases, block or reverse the transaction. Please note that, under certain circumstances, the arrangement may also apply retroactively to previous transactions.

What does this mean for you?

If you are involved in an investment or acquisition in a sensitive sector or technology, check in advance whether a notification obligation applies. A missed notification can lead to delays, sanctions, or the reversal of the deal. Timely legal assessment prevents surprises.

Frequently Asked Questions

For which transactions does the security test apply?

For investments and acquisitions involving vital providers, certain business campuses, and enterprises with sensitive technology.

What happens after a report?

The government assesses the security risk and can approve the transaction, attach conditions to it, or block or reverse it.

What if I don't report?

A missed notification can lead to delays, sanctions, or the reversal of the transaction. Therefore, assess the reporting obligation in advance.

Have a transaction reviewed?

Our legal experts assess whether the safety test applies and guide your transaction. View our corporate / M&Aor corporate lawteam, or schedule a free consultation.