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Government to take action against foreign direct investments in sensitive areas
At the government meeting on 4 June, the Government decided to refer a proposal to the Council on Legislation with the aim of strengthening efforts against foreign direct investments that threaten Swedish security and public order. At the same time, the Inspectorate of Strategic Products (ISP) and the Swedish Defence Research Agency (FOI) have been given assignments to further develop these efforts.
The ongoing COVID-19 pandemic could increase the risk of foreign actors making investments in the Swedish business sector and strategic infrastructure with the aim of gaining access to valuable technology and information in a way that threatens Sweden’s security. The ISP and FOI have therefore been given assignments to further strengthen efforts against foreign direct investments in sensitive areas.
In 2019, the EU adopted a regulation on screening of foreign direct investments into the European Union. The aim of the regulation is to create a legal framework for how the Member States can screen foreign direct investments into the Union with regard to security or public order. The EU regulation outlines how cooperation in the Union regarding the screening of foreign direct investment is to be carried out, including through the Member States designating authorities to act as contact points. The regulation enters into force on 11 October 2020, which requires adjustments in Swedish legislation. In the proposal referred to the Council on Legislation, the Government, proposes a new act with provisions to supplement the EU regulation. It is proposed that the act enter into force on 1 December 2020.
Assignment to the ISP
To meet the requirements of the EU regulation and to strengthen efforts against foreign direct investments that threaten security and public order, the Government has decided the following:
- The ISP will be designated as Sweden’s contact point in accordance with the EU regulation on foreign direct investments.
- Through this, the ISP will have the authority to collect certain information on foreign investors and the relevant Swedish companies, since direct investments risk affecting security and public order in the EU.
- Together with the Swedish Armed Forces, the Swedish Security Service, the Swedish Defence Research Agency and the Defence Materiel Administration (FMV), the ISP will also strengthen efforts against foreign direct investments that threaten security. A report on this assignment is to be presented on 1 October 2020.
Assignment to FOI
FOI, in consultation with the ISP, the Swedish Armed Forces, FMV and the Swedish Security Service, is tasked with conducting a study on foreign investments [JG1] in sensitive activities. FOI will also cooperate with the Direct Investment Inquiry (Ju 2019:06) and the National Board of Trade. Under the decision, FOI is instructed to:
- Outline the risks associated with foreign direct investments in sensitive activities.
- Specify general qualities and circumstances among investors whose investments may entail a security risk.
- Identify the areas and sectors where foreign direct investments could have adverse security consequences.
A report on this assignment is to be presented to the Government Offices by 30 November 2020