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   <p>Canada recently introduced new national security review provisions for foreign investment activity <span class="plus">... [+]</span><span class="expanded-caption"> in the country.</span></p> 
   
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</figure><p><strong>By Brian Mich and Natasha Moore</strong></p><p>Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne, on March 24<sup>th</sup> issued revised Guidelines on the National Security Review of Investments. Canadian businesses and international investors must consider what these new national security review provisions mean for their business planning, supply chains and communications. </p><div></div><p>The guidelines, which were issued pursuant to the Investment Canada Act (“ICA) are intended to inform “investors of procedures that will be followed in the administration of the national security review process set out in … the National Security Review of Investments Regulations.” </p><p>At the time they were issued, Minister Champaign made the following statement: </p><p><sup>&#34;The updated guidelines released today identify areas that could present national security concerns in foreign investment. These include sensitive personal data, certain sensitive technology areas, critical minerals, and investments by state-owned or state-influenced investors.”</sup></p><div></div><p>Such investments will trigger a mandatory, and potentially lengthy review process – up to 200 days or longer with the investor’s consent.</p><p>The national security review process under the ICA allows the federal Cabinet to take measures to address national security risks related to foreign investments. The Cabinet may block investments in Canadian businesses (or the establishment of a new Canadian business). If an investment has already been completed, the Cabinet may also force a divestiture of the business. Foreign Investments subject to national security review include acquisitions of control of Canadian businesses (whether or not Canadian-owned) of any monetary value, minority investments and the establishment of a Canadian business. </p><p>If all of this sounds familiar, it is because the updated Guidelines closely parallel the national security screenings administered the Committee on Foreign Investment in the United States (CFIUS). Canada’s tightened investment rules were not specifically prompted by the US government, but the revised Guidelines do come as the US government works with Canada to boost regional supply chains to counter China’s dominance in these sectors. The United States and Canada plan to deepen their financial and logistical partnerships, especially with their capabilities in critical minerals and technology. </p><div><div id="recirc-unit"><div>MORE FOR YOU</div><div><div>New Mexico Bans Qualified Immunity For All Government Workers, Including Police</div><div>The Supreme Court Just Gutted A Thirty-Year-Old Law Against Robocalls</div><div>What’s The Matter With Germany?</div></div></div></div><h3><strong>Sensitive personal data</strong></h3><p>The guidelines broadly define access to sensitive personal data to include: personally identifiable health information, financial data, private communications, location; or, personal data concerning government officials, including members of the military or intelligence community. Investors should be prepared this definition to be applied to a broad swath of Canadian businesses – from financial services to food delivery. </p><h3><strong>Specified sensitive technology areas</strong></h3><p>The revised guidelines provide specificity on what the government will consider “sensitive” technologies with an additional annex containing a non-exhaustive list of those technologies. It includes artificial intelligence, robotics, autonomous systems, energy, storage and transmission of data. Expect a timely and uncertain mandatory review process for investments made in this area.</p><h3><strong>Critical minerals </strong></h3><p>The updated Guidelines also include a Critical Minerals list targeting 31 minerals considered “critical for the sustainable economic success of Canada and our allies.” The reference to “our allies” is significant as US and Canada are members of the Energy Resource Governance Initiative, an international pact to agree to share mining experience and resources, which includes nickel, manganese, cobalt, potash, rare earth elements, uranium and lithium, among others. Be prepared not only for investments in mining to trigger a national security review, but also consider the location of the mining as equally important. For example, in December 2020 Canada blocked Shandong Gold’s bid for the mining company, TMAC Resources, on national security grounds because it was operating in the country’s sensitive Artic region. </p><h3><strong>Investments by state-owned or state-influenced foreign investors </strong></h3><p>The updated Guidelines regarding state-owned or state-influenced investors emphasize the Canadian Government’s sobering concerns about foreign, particularly China’s, access to technologies. International investors are strongly recommended to begin a rigorous deal diligence of their proposed activities and to seek the expertise needed for an appropriate filing and communications strategy. </p><h2><strong>The key takeaway for global businesses</strong></h2><p>Despite the stricter Guidelines, the policies are a welcomed step toward transparency to foreign investors and the critical industries alike. Canada will not outright ban foreign investments or access to sensitive information, but mitigation measures will likely be required, further increasing the timing and uncertainty for deals in this space. Ultimately, Canadian business and international investors should bear in mind that the feasibility, certainty, and cost for any transaction will be determined by a timely national security review and a skilled negotiation to navigate required mitigation terms. </p><p><em>Brian Mich is a Partner and Natasha Moore is a Consultant in the Compliance, Forensics, and Intelligence practice at Control Risks, the global specialist risk consulting firm.</em></p><div id="lightbox-inline-form-b8fcc571-5248-432f-81c0-382fb2e80619"></div><div></div>

<p>The national security review process under the ICA allows the federal Cabinet to take measures to address national security risks related to foreign investments ... Foreign Investments subject to national security review include acquisitions of control of Canadian businesses (whether or not Canadian-owned) of any monetary value, minority investments and the establishment of a Canadian business ... Investments by state-owned or state-influenced foreign investors The updated Guidelines regarding state-owned or state-influenced investors emphasize the Canadian Government’s sobering concerns about foreign, particularly China’s, access to technologies.</p>

加拿大政府加大了對外國投資的國家安全審查