CHAPTER 08 Investment Canada Act and Other Restrictions on Foreign Ownership
determine that an investment by an SOE constitutes an acquisition of control in fact even if the investment does not otherwise meet the definition of an acquisition of control. – As discussed below, acquisitions by SOEs attract generally lower thresholds for an NBR, and the government has issued some policy statements regarding NSRs and NBRs of investments by SOEs.
National Security Reviews
– The federal Cabinet may order an NSR when there has been or is proposed to be: > an acquisition of control of a Canadian business; or > an acquisition, “in whole or in part,” of a Canadian-linked entity. – Once recent amendments to the ICA are proclaimed in force, the ICA will expressly provide that an NSR is available for acquisitions of assets of Canadian-linked entities. – An investment does not need to exceed any monetary threshold for the government to conduct an NSR. NSR TIMING – An NSR is carried out by the Minister of Industry (the Minister) in consultation with the Minister of Public Safety. They consult with a wide range of other federal government departments with security, intelligence and investigative perspectives. The Minister has 45 days following the filing of a mandatory or voluntary notification or an application for an NBR, or up to five years following the implementation of a transaction not subject to notification or an NBR (e.g., minority investments for which no voluntary notification was filed), to issue a notice to a non- Canadian that its proposed investment may be subject to an NSR. Alternatively, the Minister may simply initiate an NSR within that same time period without first sending a notice of a potential NSR. The entire NSR process can take up to 200 days, or more if the review period is extended. – If the Minister issues a notice of a potential or actual NSR in respect of a proposed investment that has not yet been implemented, the proposed investment cannot be implemented until the NSR process is terminated, or closing is approved. NSR RESOLUTION – Three outcomes are possible in the event of an NSR. First, the Minister may determine that the investment will not be injurious to national security, in which case the NSR will terminate or lapse, and a proposed investment can proceed. Second, the Minister may negotiate binding undertakings with the investor, as a result of which the Minister determines that the investment will not be injurious to national security. Third, the Minister may determine that the investment would be injurious to national security, in which case the matter is referred to the
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