On 1 June 2023, the Investments, Mergers and Acquisitions Security Test Act (Wet Veiligheidstoets investeringen, fusies en overnames, Security Test Act, also referred to as "Vifo Act") has come into force. 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. Since then, 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). More information on this can be found in our previous article: Dutch Security Test Act into force as per 1 June 2023.
Since the entry into force, BUREN has advised clients on several transactions that fell within the scope of the Security Test Act. The novelty of the legislation has led to unclarity of the scope of the Security Test Act in specific transactions. It can be difficult to assess in which cases a transfer of assets qualifies as a change of control over a target company. The same applies in case the analysis is done by a reporting party that has some distance to the target company, such as a bankruptcy receiver.
In an effort to provide clarification, the BTI has now published guidelines regarding certain key criteria of the Security Test Act, which are based on the BTI's case experience over the past six months. The guidelines will be supplemented over time, based on changing insights, developments in the market or technology or amendments of legislation or regulations.
These guidelines relate to the following topics:
- Internal restructurings
This guideline defines when an internal restructuring is considered an acquisition activity within the meaning of the Security Test Act. - Definition of assets
This guideline elaborates on when the acquisition of one or more assets qualifies as an acquisition activity within the meaning of Art 2(e) of the Security Test Act. - Active in sensitive technology
This guideline addresses the question of when it can be ascertained that a company is actually active in the field of sensitive technology. These are technologies referred to in Article 8(1) (dual-use items and military goods) and in Article 8(3) of the Vifo Act (the technologies additionally designated as sensitive).
We will inform you on the content of the guidelines by separate articles soon.
The Dutch guidelines can be found here: https://www.bureautoetsinginvesteringen.nl/documenten/publicaties/2023/12/13/handleidingen
Originally published 04 January 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
