The Malta Business Weekly speaks to BETHANY MAGRO, chief Operations officer at the recently established National FDI Screening Office
In March of 2019, the European Parliament and Council enacted Regulation (EU) 2019/452, which established a framework for the screening of foreign direct investments into the European Union. The regulation, which entered into force in April of the same year, applies to transactions taking place post-October 2020 onwards.
Bethany Magro, chief Operations officer at the recently established National FDI Screening Office, tells us how the regulation represents a crucial shift for the EU.
“For the very first time, screening of foreign direct investments is being regulated at EU level. In fact, this development has the potential to significantly impact those investors from third countries that consider investing in the EU. More importantly, it can also be of relevance to the interests of EU investors,” Magro asserts.
Magro was involved in the establishment of this office from the very start, which goes back to April of last year, as she was also involved in the drafting of the Bill which today constitutes the relevant legislation.
Locally, the Office has been set up in order to implement this regulation, with the ultimate aim being the protection of EU intelligence, knowledge and technology, as well as its security interests. The sectors, which are subject to screening are varied and include infrastructure, energy, transport, water, health and communications, among others.
A full list can be accessed on the NFDIS website http://www.nfdismalta.com/.
“It is always interesting to review investment projects and learn so much about the investment regime not just in Malta but more holistically across the European Union,” Magro says.
The COO also notes that the Office is tasked with ensuring that investment projects do not pose potential threats to the security or public order of Malta. “This takes place by imposing a number of mitigating measures on projects. We also raise awareness and provide feedback on projects submitted by other member states and suggest steps to address specific concerns on the cases undergoing screening in their country,” she explains.
Asked about the role of the NFDIS and its contribution towards good governance in Malta, Magro notes how the office was set up to facilitate and support the investment process.
“It is in the general interest of Malta to ensure investment projects are evaluated against any potential risks or threats. The screening mechanism between our Office, other member states and the Commission was established to ensure business transparency. Under this mechanism we inform each other of foreign direct investments which could threaten security or public order and exchange information in this regard,” she expounds.
“Under the cooperation mechanism we are being constantly informed and aware of planned or completed foreign direct investments and discuss in more depth the circumstances resulting from such projects, on security and public order in the EU. In essence, the Office helps to rebuild the trust and confidence in foreign direct investment and ensure that foreign investors conduct business with integrity and transparency.”
Having said that, Magro reassures practitioners that it is not the intention of the NFDIS to create any unnecessary bureaucracy. In fact, in those cases where it is clear that the activities do not require screening, the Office will seek to provide its green light within 24 hours.
“In the cases where screening will be required, the Office will carry out full due diligence on the activity and the ultimate beneficial owner,” Magro says.
Asked for her message to investors currently considering Malta, Magro encourages them to actively look at the great opportunities the island has to offer across all the economy. “Malta remains an attractive jurisdiction for investment and as such the Office ensures that while remaining open to investment, Malta is rightly equipped to protect its essential interests,” Magro concludes.