Dutch Security Test Act into force as per 1 June 2023

The Investments, Mergers and Acquisitions Security Test Act (WetVeiligheidstoets investeringen, fusies en overnames, Security Test Act) has come into force as of 1 June 2023. The Security Test Act provides a mechanism for screening of Corporate M&A transactions involving companies that are active as vital providers of (highly) sensitive technology, operators of corporate campuses or vital infrastructure providers in The Netherlands.

As of now, M&A deals that meet the requirements of the Security Test Act need to be reported to the Bureau for Investment Screening (Bureau Toetsing Investeringen, BTI). If a transaction takes place without the approval of BTI, it could be declared null and void. Also, the exercise of the acquired rights by the investor could be suspended or a fine with a maximum of 10% of the turnover can be imposed.

The BTI notification obligation has retroactive effect as from 8 September 2020. The parties involved in previous transactions are not obliged to make the notification by themselves. Instead, the Dutch Minister of Economic Affairs and Climate will make a request if there are reasonable grounds that the M&A transaction could pose a risk to the security regime of The Netherlands. The Minister has the authority to do so until February 2024.

This retroactive effect does not apply to investments made in operators of corporate campuses and certain categories of sensitive technology as designated in the Decree on the Scope of Application of Sensitive Technology (besluit toepassingsbereik sensitieve technologie).

A notification form is available on the website of BTI and contains a step-by-step plan regarding what kind of information needs to be submitted in relation to the M&A deal. This varies from information regarding the structure of the acquirer, the group and the target company, the impact on the national security of The Netherlands and the rationale behind the transaction.

More extensive information can be found in one of our earlier blogs. If you have any questions regarding the Security Test Act or require assistance with filling in the BTI notification form, please contact Friederike Henke, Susanna Tang or any of the other Buren specialists of our Corporate department.