During recent years, concerns have been expressed about foreign investors, especially state-owned enterprises, acquiring companies in Europe due to strategic motives. In October 2020, Regulation (EU) 2019/452 entered into force, establishing a framework for the screening of foreign direct investments into the Union. Despite these developments, foreign direct investment screening is largely left to the Member States discretion. In Finland, the Act on the Screening of Foreign Corporate Acquisitions (172/2012) applies to acquisitions of defence industry enterprises, companies that produce or supply critical products or services related to the statutory duties of Finnish authorities essential to the security of society and organisations or business undertakings that are considered critical in terms of securing functions vital to society on the basis of their field, business or commitments. Essentially, the objective of the Act is to screen, and, should a key national interest so require, restrict the transfer of influence to foreigners in the entities subject to screening.
The purpose of this study consists of three elements. First, the purpose of the study is to provide a review of the EU framework for the screening of foreign direct investment and the national foreign direct investment screening mechanism. In essence, the review will thoroughly cover the key elements of the applicable EU regulation and the national act, supported by various illustrations and summaries. Secondly, the purpose of the study is to provide an analysis of the legal grounds for the screening and restriction of foreign direct investment. The analysis will cover the grounds 'security or public order' included in the EU framework, as well as the ground 'key national interest' included in the national act. Thirdly, the study will provide observations on the application of the foreign direct investment screening mechanisms. The observations will provide practical information on how the respective mechanisms have been used during recent years, as well as a time-bound account of the types of investments that have been subject to screening.
