Extended investment screening and new deadlines for case processing
The Danish Parliament has passed an amendment to the Investment Screening Act that extends the scope of the screening programme to include contracts relating to the North Sea Energy Island and changes the Danish Business Authority's investment screening process and deadlines. In addition, the Danish Business Authority has published new notification and application forms.
Extension of the scope of the Investment Screening Act
The Amendment Act, effective as of 1 July 2023, extends the scope of the Investment Screening Act to specifically include contracts relating to the establishment, co-ownership and operation of the North Sea Energy Island. In contrast to the current screening programmes, the screening programme for the North Sea Energy Island extends to all contracting parties, including Danish contracting parties.
When the Bill was originally put out for consultation in March, a very broad extension of the scope of critical infrastructure contracts was envisaged, but the broad extension has been skipped for the time being. As previously described, the Danish Business Authority intends to initiate a dialogue in the autumn of 2023 with a view to tightening the control of critical infrastructure contracts. Thus, it has not yet been finally clarified which rules will be introduced for other public contracts.
Read our previous newsletter about the Bill (in Danish).
Changes to the screening process
The Amendment Act introduces a common procedure for all types of applications and notifications under the Investment Screening Act. In the future, there will be a common deadline for the processing of all types of applications and notifications.
As of 1 July, notifications and applications must be processed in two phases, which is also known from other EU member states, and in accordance with principles known from merger control.
Phase 1 will require less information and documentation than the current programme. The processing time in phase 1 is up to 45 calendar days from the date when the Danish Business Authority declares that the application is complete. The processing time in phase 1 is thus an improvement compared to the current deadline of 60 business days.
In "special cases", the Danish Business Authority may initiate phase 2. Phase 2 will require more in-depth questions and documentation, including contract documents and submission of an EU B form that will be shared with the European Commission and other EU member states. The processing time in phase 2 is up to 125 calendar days from the date when the Danish Business Authority notifies the notifier or applicant of the commencement of the phase 2 screening.
Exceeding the deadlines in phase 1 or phase 2 will have no legal consequences for mandatory applications or – unlike today – voluntary notifications. However, the Danish Business Authority will notify the applicant of the status of the processing if the deadline is exceeded.
New application and notification forms
The Danish Business Authority has published new application and notification forms to be used as of 1 July 2023. Unlike before, as of 1 July, there will be separate forms for investments and for special financial agreements.
In addition to a new layout, the published forms bring significant changes, especially with regard to the volume of information requested regarding the investor's business activities. The primary focus is on the investor's ownership structure.
Additionally, updated executive orders have been published regarding processing under the Investment Screening Act (the procedural order) and authorities' confidentiality obligations and disclosure rights (the confidentiality order).
Contact
