The Business Ministry of Denmark announced on May 5, 2021, that the lawmakers of the country have passed legislation for allowing the screening of future foreign investments in order to ensure that they don’t pose a threat to national security.
The new legislation by Denmark has been developed in part following the security concerns over a bid by Huawei of China to build Denmark’s 5G Network. TDC, the biggest telecom operator of Denmark, eventually decided to pick Ericsson over Huawei for the job.
The law, however, does not apply to Greenland or Faroe Islands. They both are sovereign territories under the Kingdom of Denmark.
Objective:
As per the legislation, the aim of this Act is to prevent the threat posed by the outside foreign direct investment and special economic agreement to the national security and or the public order in Denmark.
The threat can be prevented through screening and potential interference with such agreements and investments.
Key Highlights:
• Under the new law, the screening will be carried out for investments into information technology, defence, and critical infrastructure.
• Foreign investors in Denmark will be assessed and evaluated on their potential link to any other foreign governments, armed forces, or any other state entities as well as their connection to the criminal activities.
• The EU lawmakers, in 2019, had backed a far-reaching system for coordinating the scrutiny of foreign investments, particularly from China, in order to protect strategic infrastructure and technologies in Europe.
Development of 5G Network in Denmark:
The Defence Minister of Denmark, Trine Bramsen, in 2020, while commenting on the following concerns over the development of the 5G Network had said that Denmark wanted to be able to eliminate 5G technology suppliers from providing any form of critical infrastructure if they are not from the nations that are considered the security allies of Denmark.
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