DENMARK Law and Practice Contributed by: Thomas Maaberg Hansen and Peter Sand, Gorrissen Federspiel
The Danish War Material Act The Danish War Material Act entails a separate approval procedure through the Danish Ministry of Justice. The case-handling procedure is conducted in one phase and typically requires the Danish Ministry of Justice to gather information from various relevant authorities, including the Ministry of Foreign Affairs and a technical assessment from the DALO. The stat - ed average processing time is two to three months but may in certain cases be significantly longer. 6.5 Assessment Criteria FDI The Danish Business Authority assesses whether an investment may pose a threat to national security or public order. Pursuant to Section 15 of the Danish FDI Act, the assessment takes into account factors relat - ing both to the Danish company and to the foreign investor. In relation to the Danish company, relevant factors include whether the company: • operates within or impacts critical infrastructure; • has access to classified information or sensitive personal data; • provides products or services that are difficult to replace; • is active in the defence industry or develops critical or dual-use technology; and • is involved in the supply of critical raw materials or other strategically important resources. In relation to the foreign investor, the authority consid - ers whether: • the investor is directly or indirectly controlled by a foreign government, governmental body or armed forces, including through ownership or significant funding; • the investor has been involved in activities affecting security or public order in an EU member state or other friendly or allied countries; • there is a serious risk that the investor is involved in or connected with unlawful or criminal activities relevant to national security or public order; and
to unwind the transaction. If an order to unwind the transaction is not complied with, the Danish Business Authority may ultimately suspend the investor’s voting rights in the Danish target. There are no fines associated with breaching the Dan - ish FDI screening rules. Voluntary pre-notification The Danish FDI Act contains a voluntary cross-sec - toral notification mechanism for special economic agreements with or investments of 25% or more of the shares, voting rights or similar means of control in Danish companies that fall outside the applicable sen - sitive sectors and activities, but which can neverthe - less pose a threat to national security or public order. The Danish War Material Act Foreign investments that fall within the scope of the Danish War Material Act are subject to a mandato - ry pre-approval requirement. Failure to obtain such approval can be sanctioned by a fine or imprisonment. 6.4 Review Process and Timetable FDI For FDI applications, the Danish Business Authority conducts its review in up to two phases. The statutory review period under the first phase is 45 calendar days (after the application has been declared final) – after which, the Danish Business Authority can either approve the application or progress it to the second phase. Under the second phase, the Danish Business Authority and the Ministry of Industry, Busi - ness and Financial Affairs have an additional review period of 125 calendar days – after which, the author - ity/ministry can either:
• clear the transaction without remedies; • clear the transaction with remedies; or • prohibit the transaction.
For transactions that fall under the mandatory screen - ing regime, the parties are not allowed to close the transaction before approval has been granted.
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