Foreign investments

Denmark passes law to screen foreign investment for security risks

Danish lawmakers have passed a law allowing screening of future foreign investments to ensure they do not pose a threat to national security, the Ministry of Business said on Wednesday.

The new legislation was drawn in part following security concerns over an offer from Chinese Huawei to build Denmark’s 5G network. Denmark’s largest telecommunications operator TDC ultimately chose Ericsson over Huawei for the job.

Screening under the new law, which does not mention China, will be carried out for investments in defense, information technology and critical infrastructure.

“The purpose of this law is to prevent foreign direct investment and special economic agreements from posing a threat to national security or public order in Denmark, through filtering and potential interference with such investments and agreements, “says the legislation.

Foreign investors would be assessed based on their potential connection to foreign governments, armed forces or other state entities as well as any connection to criminal activity, he said.

Following concerns over the development of the 5G network, Defense Minister Trine Bramsen said last year that Denmark wanted to be able to exclude 5G technology providers from providing critical infrastructure if they were not from countries considered as security allies.

The law does not apply to Greenland or the Faroe Islands, which are sovereign territories of the Kingdom of Denmark.

In 2019, EU lawmakers supported a wide-ranging system to coordinate the control of foreign investment, especially from China, to protect strategic technologies and infrastructure in Europe.

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