NETHERLANDS Law and Practice Contributed by: Herald Jongen, Maarten de Boorder, Samuel Garcia Nelen and Jelmer Kalisvaart, Greenberg Traurig, LLP
investors may be subject to FDI screening or national security reviews, depending on the nature of the trans- action and the industry involved. Sectors that are considered sensitive or critical (“vital” sectors), such as telecommunications, defence, ener- gy and technology, may have specific restrictions on foreign ownership or require prior approval from the competent authority – ie, the Investment Screening Bureau ( Bureau Toetsing Investeringen or BTI). In such cases, a notification to or authorisation from the rele- vant regulatory authorities may be mandatory. In case of an FDI filing, a standstill obligation applies under which the parties are prohibited from implementing the proposed transaction before the required clear- ance is obtained from the BTI. These measures are in place to protect national security and safeguard critical infrastructure from potential foreign influence. 7.4 National Security Review/Export Control There is no general national security review of acqui- sitions in the Netherlands – ie, not every transaction requires approval from the state. However, since the Dutch National Security Investment Act ( Wet veilig- heidstoets investeringen, fusies en overnames or the “NSI Act”) has entered into force on 1 June 2023, there are certain considerations for investors/buyers who are willing to invest in or acquire a target com- pany in the Netherlands that is: • a vital provider; • a manager of a corporate campus; or • a sensitive technology company. A company that operates, manages or makes avail- able a service whose continuity is vital to Dutch soci- ety is considered a vital provider. Examples include key financial markets infrastructure providers like sig- nificant banks, payment services providers, trading platforms, main transport hubs (Schiphol Airport and the Port of Rotterdam), heat network or gas storage operators, and extractable energy or nuclear power companies. The Dutch government intends to expand the NSI Act to include biotechnology, AI, advanced materials and nanotechnology, sensor and navigation technology and nuclear technology for medical use. The objec-
tive is to mitigate the risk of sensitive knowledge and technologies falling into the wrong hands and to pre- vent the creation of strategic dependencies that could pose security concerns. While the exact data of entry into force remains uncertain, the bill is expected to be submitted to the House of Representatives ( Tweede Kamer ) soon. The notification requirement resulting from the NSI Act applies irrespective of the nationality of the acquirer. The notification obligation applies to both the acquirer and the target company. The acquirer is exempted from the obligation to report if the investor cannot know that the investment is subject to a notification obligation due to a secrecy obligation of the target company. In addition to the NSI Act, the main laws currently in force in the Netherlands containing foreign investment review-related provisions are: • the Dutch Electricity Act 1998; • the Dutch Gas Act; • the Dutch Financial Supervisory Act; • the Dutch Gambling Act; • the Dutch Healthcare Market Regulation Act; • the Dutch Mining Act; and • the Dutch Telecommunications Act, as amended by the Dutch Act on undesired control telecommu- nications. In the Netherlands, the EU restrictions regarding the export of so-called dual-use goods and services apply. As a result, the supply of certain TMT goods, services and know-how to non-EU destinations is restricted, or is subject to licences and other export compliance obligations. In case it concerns exports to destinations in connection with which the EU has implemented economic sanctions (eg, Russia and Belarus), export restrictions apply to a much larger range of TMT products and services. In addition to compliance with EU regulations, in many instances it is also a requirement to consider export-related restrictions or compliance obligations from other jurisdictions when exporting from the Netherlands. Businesses are expected to do careful due diligence and prevent circumvention of export restrictions in the context of TMT supplies. Compliance is monitored
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