Ireland

Notification Requirements

Mandatory notification thresholds

Under the Act, a transaction is mandatorily notifiable if the following conditions are met:

1. A ‘third country’ (ie, non-EU/EFTA) undertaking or a connected person as a result of the transaction: (i) acquires control of an asset in the State; or (ii) changes the percentage of shares or voting rights that it holds in an undertaking in the State from below 25% to above 25% and from below 50% to above 50%; 
2. The value of the transaction is at least €2 million (taking into account all transactions between the parties in the last 12 months); and
3. The transaction “relates to, or impacts upon” one or more of the sensitive matters/sectors set out in Article 4(1)(a)-(e) of Regulation 2019/452, namely:

1. Critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
2. Critical technologies and dual-use items as (now) defined in Regulation 2021/821, including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy, storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
3. Supply of critical inputs, including energy or raw materials, as well as food security; 
4. Access to sensitive information, including personal data, or the ability to control such information; and/or
5. The freedom and plurality of the media.

The following should be noted in relation to the mandatory notification criteria, in particular based on the Department’s final guidance document published in December 2024:

• The definition of ‘third country’ (ie non-EU/EFTA) undertaking is stated to be satisfied where either the ‘direct investor’ (ie the entity directly involved in the acquisition of the target entity or group) or the ultimate owner of the investor group is a ‘third country’ (ie non-EU/EFTA) undertaking.
• The concept of 'control' is consistent with the similar concept under the Irish and EU merger control regimes.  It is possible that the share and voting rights threshold may only be satisfied where a change occurs in the register of members of an Irish entity and so may be more limited.
• Joint ventures to which existing assets or businesses are contributed may be caught (including, potentially, non-full function joint ventures), but purely greenfield joint ventures are generally excluded.  
• Intra-group restructuring transactions are generally excluded, although it is unclear if a notification may be required if the ultimate controlling entity of the group becomes a ‘third country’ (ie non-EU/EFTA) undertaking as a result of the restructuring. 
• The Department’s final guidance document provides some clarification on how the sensitive matters/sectors will be interpreted and clarifies that the “relates to, or impacts upon” concept is to be viewed broadly, but it still lacks clarity in various respects and will be subject to the Department’s actual enforcement approach in relation to the sensitive matters/sectors.  

Call-in power in respect of ‘below threshold’ transactions

Under the Act, the Minister may 'call in' a transaction for review where the following conditions are met: 

1. Where the Minister has reasonable grounds for believing that the transaction affects, or is likely to affect, security or public order in the State; and 
2. Where the transaction results in a third country undertaking acquiring control, legal rights or the ability to exercise effective participation in the management or control of an asset or undertaking in the State (ie, a lower threshold compared with the mandatory thresholds).

The Minister may exercise this power in the case of non-notifiable transactions for a period of 15 months post-completion, and in the case of non-notified transactions for a period of the later of 5 years post-completion or 6 months after the Minister becomes aware of the transaction.

Review process

Decision maker 

The Investment Screening Unit within the Department is responsible for administering the regime.  
The Minister for Enterprise, Trade and Employment (the “Minister”, as referenced herein) is the addressee of notifications and the decision-maker (subject to appeal mechanisms before the Irish courts – see below).

Review periods

After a notification has been made, if jurisdiction is accepted, the Minister will issue a screening notice to the parties which will have suspensory effect (ie, the parties should not take any action for the purposes of completing or furthering the transaction). 

The Minister will conclude the review within 90 calendar days of the date of the screening notice.  This may be extended to 135 calendar days by notice in writing.  Where the Minister issues a notice of information (ie, RFI), the review period is suspended until the parties fully comply with the notice of information and the Minister certifies compliance.

At the end of the relevant period, the Minister must issue a screening decision providing reasons as to why the transaction was considered to affect or not to affect security or public order in the State.  If the Minister fails to issue a screening notice by the end of the relevant period, the transaction shall be deemed to be subject to a screening decision that it does not affect security or public order in the State.  The Minister may decline to give reasons where security or public order is affected.

Appeals 

Decisions taken by the Minister can be appealed either directly by way of judicial review or to adjudicator(s) appointed by the Minister.  Decisions of an adjudicator(s) may, in turn, be appealed by way of judicial review or to the High Court on points of law. 

Substantive test

The substantive test which the Minister must apply is whether the transaction affects, or would be likely to affect, the security or public order of the State.

The Act provides for a (relatively long) list of considerations to which the Minster must have regard, including whether or not a party to the transaction is controlled by a government of a third country and, where relevant, the extent such control is inconsistent with the policies and objectives of the State; the extent to which a party to the transaction is, at the time the transaction is being reviewed, already involved in activities relevant to the security and public order of the State; and whether or not a party to the transaction has previously taken actions affecting the security or public order of the State.

In carrying out its review, the Minister shall also consult the advisory panel made up of other relevant Government departments, as well as any other person the Minister considers appropriate.

If the Minister concludes that the transaction affects or is likely to affect security or public order in the State, the Minister can direct that certain other steps are undertaken by the parties (eg, divestment of assets, cessation or modification of certain practices, restrictions on the flow of competitively sensitive information etc.), or otherwise prohibit the transaction.

Penalties

Any person or undertaking that fails to notify a mandatorily notifiable transaction, fails to comply with a notice of information or intentionally or recklessly provides information that is false in a material particular, shall be guilty of an offence.

The potential sanctions are: (i) on summary conviction, a maximum fine of €5,000 and/or a maximum sentence of 6 months imprisonment; or (ii) on conviction on indictment, a maximum fine of €4 million and/or a maximum sentence of 5 years imprisonment.

Key developments

The current trends and outlook include the following:

• Transactions which meet the mandatory notification criteria may be notified to the Department from 6 January 2025.  The notification form used by the Department replicates the form used by the European Commission to facilitate the exchange of information between Member States.  The information requested by the form is to be uploaded via the Department’s Case Management System portal.
• While the Department was unwilling to engage with transaction parties prior to commencement of the Act/regime, this may be possible following commencement on 6 January 2025.  It may also be possible to notify a transaction on a precautionary basis, reserving one’s position on the question of mandatory jurisdiction and asking the Department to take a position on jurisdiction (through the issuance of a screening notice or not).
• While the Department’s final guidance document of December 2024 offers some clarifications on the various elements of the regime, as has always been the case, the Department’s actual enforcement approach in its administration of the regime will ultimately determine, as well as set the tone for, the scope and intensity of review of in-scope transactions.  
• It is currently expected that the call-in power will only be exercised in cases which raise significant  security or public order concerns.  

Authored by

Calum Warren, Partner, Matheson LLP
calum.warren@matheson.com
+353 86 031 6636