News item | 19-12-2024 | 07:00
Takeovers, mergers and other forms of investments in companies are increasingly used by countries to achieve their geopolitical goals. To prevent vital Dutch processes from being disrupted and sensitive technology from falling into the wrong hands, the Investment, Mergers and Acquisitions Safety Assessment Act (Vifo Act) was introduced in 2023. As announced in the government programme, the government now proposes to expand the number of technologies for which a safety test is required. This concerns: biotechnology, artificial intelligence, advanced materials and nanotechnology, sensor and navigation technology and nuclear technology with medical use. Adding these 6 technologies to the Vifo Act limits the risk of knowledge and technology falling into the wrong hands and risky strategic dependencies arising.
Minister Beljaarts (Economic Affairs): The international security situation has deteriorated rapidly in recent years. We already see that the Netherlands is the target of hybrid attacks, such as cyber operations, espionage and sabotage. That is why we as a government must protect the business community where necessary. Because The Netherlands is known worldwide for entrepreneurs who operate at the cutting edge of technology. That is good news, but it also brings unwanted attention. We cannot afford to be naive about the intentions of other countries when it comes to these companies. By adding 6 new technologies to the scope of the Vifo Act, we are taking an important step in protecting Dutch entrepreneurs, their innovations and the future of a resilient Dutch economy.
Economy and security
Mergers and acquisitions of or investments in Dutch companies take place every day. In addition to economic motives, investors sometimes also have other malicious motives. For example, a merger, acquisition or investment may lead to the transfer of information, intellectual property or influence. This allows another country to expand its geopolitical and military power, which could lead to risks for our national security. In order to better deal with these types of safety risks, the Vifo Act has been in force since June 1, 2023. This law introduces a security test for investments, mergers and acquisitions that could pose a risk to national security. The technologies that the Vifo Act currently focuses on are: semiconductors, photonics, quantum, high assurance products and so-called dual-use and military goods.
The expansion
The expansion of the current law is necessary due to the rapid development of the technologies to be added and their importance for the Netherlands. In addition, these technologies have a potentially disruptive character, making them important for the long-term earning capacity of the Netherlands and solving social challenges. Adding these 6 technologies to the Vifo Act limits the risk that vital Dutch processes can be disrupted through unwanted control, sensitive technology can fall into the wrong hands or risky strategic dependencies can arise.
Follow-up
The internet consultation for the extension of the Vifo Act will take place from December 19, 2024 to January 31, 2025. During this period, everyone can give their opinion on the proposal. This can lead to adjustments. The proposal is then discussed in the Council of Ministers and presented to the Senate and House of Representatives. It will then be submitted to the Council of State for advice, after which it may enter into force in the second half of 2025.