FINLAND: Update on changes to Act on the Monitoring of Foreign Corporate Acquisitions for Finland Foreign Investment

Wednesday October 15 2014

The Finnish Ministry of Employment and the Economy has published in English a revised summary of the Act on the Monitoring of Foreign Corporate Acquisitions in light of changes introduced in Finnish in July 2014.

The Ministry of Employment and the Economy is the authority responsible for handling official matters that concern the monitoring and confirmation of corporate acquisitions. If a corporate acquisition is considered a potential threat to a vital national interest, the Ministry of Employment and the Economy may refer the processing of its confirmation or refusal to the government plenary session.

The Act allows Finnish public authorities to exercise control over the ownership of companies considered essential in terms of national emergency supply and national security. If necessary, foreign ownership in such companies may also be restricted.

All corporate acquisitions in the defence and dual-use goods sector are subject to confirmation by the public authorities. Such confirmation will be based on a prior application. In the civil sector, the monitoring targets Finnish enterprises considered critical for securing vital functions within society. Within the civil sector, corporate acquisitions will be subject to notification.

As regards the defence material industry, monitoring will cover all foreign owners. In other respects, monitoring will only apply to foreign owners residing or domiciled outside the EU and EFTA states.

The term corporate acquisition under the Act refers to an operation as a result of which a foreign owner gains control of at least one tenth, one third or one half of the aggregate number of votes conferred by all shares in the company, or a holding that otherwise corresponds to factual decision-making authority in a limited company or other monitored entity.

July 2014 changes
The changes to the Act apply to provisions on the definition of foreign corporate acquisitions, the transfer of decision making and processing of cases to the government and advance notifications which must be submitted to the Ministry of Employment and the Economy.

MEE will continue to monitor corporate acquisitions and enforce matters related to authorities. If the corporate acquisition is found to pose a significant threat to national interest, the ministry can transfer processing of confirmation or refusal of the acquisition to the government`s general assembly.

The Ministry has also published revised FAQs on the Act, as well as instructions for parties preparing applications for confirmation or notification.

Click on the above link for more details. See also our July 2014 update on changes.