Description of the Act

The new law covers investments in a number of protection-worthy activities, seven different sectors, that are conducted by a limited company, European company or trading partnership or by an economic association or foundation with its registered office in Sweden. Investments in protection-worthy activities that are conducted in Sweden in an unincorporated partnership or sole trader undertaking are also covered.

A party who intends to invest in protection-worthy activities, whether directly or indirectly, must notify the Inspectorate of Strategic Products (ISP) of the investment if the investment gives the investor a certain influence in the activities. The investor's obligation to notify the ISP arises if, after the investment, the investor would, directly or indirectly, come to possess votes that correspond to or exceed any of the thresholds specified in the Act.

The ISP may also decide to initiate screening on its own initiative, which means that investments in protection-worthy activities that are not subject to the obligation to notify may also be screened. An investment subject to the obligation to notify may only be implemented if no action has been taken in response to the notification of the investment or the investment has been authorised following the screening. If the ISP initiates screening on its own initiative, the investment may only be implemented if the investment is authorised following the screening.

The ISP must prohibit a foreign direct investment if it is necessary to prevent harmful effects on Sweden's security or on public order or public safety in Sweden.

To ensure that foreign direct investments are not hindered to a greater extent than is necessary, the ISP may also attach conditions to the authorisation of an investment. If the risks associated with an individual foreign direct investment can be reduced to an acceptable level by attaching certain conditions to it, it is not necessary to prohibit the investment. The ISP also has the power to impose sanctions in case of violations of the law.