Acquisitions, mergers and other forms of investments in companies are increasingly used by countries to achieve their geopolitical goals. In order to prevent Dutch vital processes from being disrupted and sensitive technology from falling into the wrong hands in this way, the Investment, Mergers and Acquisitions Safety Test Act (Wet vifo) was introduced in 2023. As announced in the government programme, the government now proposes to expand the number of technologies for which a safety test is required. This concerns: biotechnology, artificial intelligence, advanced materials and nanotechnology, sensor and navigation technology and nuclear technology with medical use. By adding these six technologies to the Wet vifo, the risk of knowledge and technology falling into the wrong hands and risky strategic dependencies arising is limited.
Minister Beljaarts (Economic Affairs):
The international security situation has deteriorated rapidly in recent years. We are already seeing that the Netherlands is the target of hybrid attacks, such as cyber operations, and espionage and sabotage. That is why we as a government must protect the business community where necessary. The minister continues: Because the Netherlands is known worldwide for entrepreneurs who operate at the cutting edge of technology. That is good news, but it also brings unwanted attention. We cannot afford to be naive about the intentions of other countries when it comes to these companies. By adding 6 new technologies to the scope of the Vifo Act, we are taking an important step in protecting Dutch entrepreneurs, their innovations and the future of a resilient Dutch economy.
Minister Van Weel (Justice and Security):
We must make our society more resilient to external threats. From the individual to the government and the business community. We know that malicious countries want to profit from technology in our country. This law is an important instrument to prevent unwanted investments. And that is important in these turbulent times. In order to be prepared as a society against these kinds of threats, we need to work on our resilience and that requires everyone's commitment.
Economy and security
Mergers and acquisitions of or investments in Dutch companies take place every day. In addition to economic motives, investors sometimes also have other malicious motives. For example, a merger, acquisition or investment can lead to the transfer of information, intellectual property or influence. This allows another country to expand its geopolitical and military power, which can lead to risks for our national security. In order to better deal with these kinds of security risks, the Vifo Act has been in force since 1 June 2023. This law introduces a security test for investments, mergers and acquisitions that could pose a risk to national security. The technologies that the Vifo Act currently focuses on are: semiconductors, photonics, quantum, high assurance products and so-called dual-use and military goods.
The extension
The extension of the current law is necessary due to the rapid development of the technologies to be added and their importance for the Netherlands. In addition, these technologies have a potentially disruptive character, making them important for the long-term earning capacity of the Netherlands and for solving social challenges. By adding these 6 technologies to the Vifo Act, the risk is limited that Dutch vital processes can be disrupted through unwanted influence, that sensitive technology can fall into the wrong hands or that risky strategic dependencies can arise. Follow-up The internet consultation for the extension of the Vifo Act will take place from 19 December 2024 to 31 January 2025. During this period, everyone can give their opinion on the proposal. This can lead to adjustments. The proposal will then be discussed in the Council of Ministers and submitted to the First and Second Chambers for consideration. It will then be submitted to the Council of State for advice, after which it could possibly enter into force in the second half of 2025.
