SINGAPORE LAW AND PRACTICE Contributed by: Jeffrey Lim, Daniel Lim, Frederick Tay, Genevi Lim, Lakshmanan Anbarazan, Sarah Lai, Stephanie Goh and Tobias Andreas Satria, Joyce A. Tan & Partners LLC
7. Foreign Investment/National Security 7.1 Applicable Regulator and Process Overview Apart from specific regulations regulating investments in certain critical entities, Singapore has recently passed the Significant Investments Review Act 2024 of Singapore (SIRA) to supplement such regulations. The purpose of the SIRA is to protect the national security interests of Singapore by regulating signifi - cant investments in, and control of, critical entities (“Critical Entities”). While the SIRA itself does not set out the criteria for determining which entities qualify as Critical Entities, a list of such entities was published in the Government Gazette on 31 May 2024. The enti - ties currently designated as Critical Entities include ST Logistics, Sembcorp Specialised Construction, ST Engineering Marine, ST Engineering Land Sys - tems, ST Engineering Defence Aviation Services, ST Engineering Digital Systems, ExxonMobil Asia Pacific, Shell Singapore and Singapore Refining Company. The SIRA further provides for the following in relation to the change in shareholding interests of each of the Critical Entities: • Existing investors of the Critical Entities have to seek the approval of the Ministry of Trade and Industry (MTI) prior to ceasing to be a 50% or 75% controller. • Potential investors and acquirers must notify the MTI within seven days after becoming a 5% con - troller. • Potential investors and acquirers must seek the MTI’s approval prior to becoming a 12%, 25% or 50% controller or indirect controller. • Potential investors and acquirers must seek the MTI’s approval prior to acquiring the Critical Enti - ties as a going concern, of (or any part of) the business or undertaking. The approval should be sought jointly with the Critical Entities. The MTI will review the request for approval based on the following conditions:
erty, know-how, or technology to ensure continued market access for competitors. At the most extreme, the CCCS may simply prohibit an anticipated merger from occurring or require a completed merger to be dissolved. Behavioural remedies are measures that regulate the conduct of the merged entity rather than changing its structure. They are typically used where structural remedies like divestment are impractical or dispropor - tionate as they require closer monitoring of compli - ance. Such remedies may include avoiding exclusive contracts, committing to fair and non-discriminatory pricing or access for customers and competitors, and maintaining the supply of critical inputs or software. 6.4 Antitrust/Competition Enforcement While notification is voluntary and non-suspensory, the CCCS may investigate at any time and block or unwind a merger that is found to substantially lessen competition even after completion. The CCCS may also investigate mergers that have not been directly notified to it, where it is triggered through CCCS’s own market intelligence functions or complaints from third parties. Where a merger is found to substantially lessen com - petition, the CCCS may issue directions to remedy, mitigate or eliminate such anti-competitive effects. If the CCCS further finds that the anticompetitive effects were intentional or negligent, financial penalties of up to 10% of the merger parties’ Singapore turnover per year of infringement (up to three years) may be imposed. Documenting the parties’ self-assessment on whether a proposed merger should be notified would therefore be the first line of defence against the CCCS finding negligence. Decisions of the CCCS may be appealed to the Com - petition Appeal Board, and further to the High Court and Court of Appeal on points of law or quantum of penalties.
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