A screening system for foreign direct investments to protect Swedish security interests
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S supports the bill to protect national security, strategic interests, and economic sovereignty 1. C supports the purpose but considers that the legislation lacks clear definitions, risks creating unnecessary bureaucracy, and that media companies should have been included 2 3. SD welcomes the bill to protect security as energy, information technology, and security are not common trade goods. M argues that investments in security-sensitive activities involve security risks, that the current regulatory framework is insufficient, and that the system must include Swedish investments 4. V considers that Sweden must follow the EU regulation and that media companies should not be included as it would require constitutional amendments. KD considers that foreign investments are needed for competitiveness 5, but that tools are needed to stop acquisitions that threaten security interests 5. KD considers that investments in media companies should be subject to notification 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Speakers (14)
Lars Isacsson (S)
Madam Speaker! I would like to begin by moving for the approval of the bill on screening systems for foreign direct investments.
There is a large amount of foreign ownership of companies in Sweden. Foreign companies and investors have acquired and own important assets and infrastructure in Sweden. Perhaps the most notable cases are Swedish ports. This also applies within energy supply. For example, certain wind power projects and power grids in Sweden are owned and operated by foreign companies. There is foreign ownership within telecommunications and within the transport sector. This applies, for example, to airports and railways that have foreign ownership in consortia.
It is important to emphasize here that foreign ownership in these sectors does not necessarily entail any security risk. Many investments and foreign ownership are strictly commercial and aim to promote economic growth and development.
Sweden has been and is known for its openness towards foreign investments and global trade. For much of the post-war period, we have favored free trade and foreign investments to promote economic growth and prosperity. It has benefited Sweden.
But the world is changing. As the world has become more globalized and economically integrated, issues regarding security and influence operations have become more acute. This has led to many countries, including Sweden, reassessing their strategy regarding foreign investments.
There is an increased concern regarding the security situation. Depending on geopolitical events and the threat landscape, governments should react by strengthening their legislation to protect national security. Increased concern over potential influence from foreign states and non-state actors contributes to the fact that Sweden is now choosing to introduce a screening system.
A screening system for foreign direct investments to protect Swedish security interests
With this, we also follow the international developments. We act in line with international trends. Many other countries, especially within the EU, have already introduced or are considering introducing similar screening systems for foreign investments.
In 2019, the European Parliament and the Council adopted the regulation on establishing a framework for screening of foreign direct investments in the Union. It was a step towards ensuring that the EU member states have tools to protect their strategic assets and sensitive sectors from potential foreign interference.
Sweden, as part of the EU, committed to implementing this regulation. The Social Democratic-led government appointed an inquiry, the Direct Investment Inquiry, to propose how the Swedish adaptation should be carried out. In March 2020, it submitted a proposal for a Swedish system for screening foreign direct investments in protected areas.
There are primarily two strong arguments for the introduction of a review system.
Firstly, it is about protecting our national security and strategic interests. With increasing globalization and an ever more complex geopolitical situation, we must be proactive when it comes to identifying and managing potential threats. Having a system for screening foreign direct investments in protected areas gives us the tools to ensure that our critical assets do not fall into the wrong hands.
Secondly, this proposal is also a question of economic sovereignty. We must be able to protect our strategic industries and companies from unwanted foreign interference. It is about securing our ability to make our own decisions regarding our economy and not risking becoming dependent on foreign actors who may have conflicting interests.
With that said, Madam Speaker, I move for the approval of the bill.
Ulrika Liljeberg (C)
Madam Speaker! This is important legislation that is finally being put in place. We need to have better oversight of, and be able to prohibit, foreign investments in protected activities that can have a harmful impact on Sweden's security, public order, or public safety.
Centerpartiet supports the purpose, the ambition, and most of the legislation that is proposed. But we think it could have been much better, much smarter, and much more – and this is primarily for three reasons:
We believe that media companies should have been included.
We believe that municipalities and regions, but also the business community, should have received more support from the state with knowledge in this regarding the country's important security work concerning, among other things, Eastern Europe and China.
We see great risks for Swedish business and for the willingness to invest and the pace of investment in our country with the way the legislation is designed and intended to be implemented.
This is, as said, necessary and important legislation, but not well-designed legislation.
I want to start by speaking about the media companies and then address the design of the legislation. Our view is that media companies are socially important activities, which should therefore have been included in the review. I believe we are all now well aware that information, press, and media are one of the keys to destabilizing and influencing, for example, the will to defend and the cohesion in a country.
The reasons why the government is not involved with media companies is that each, according to the Freedom of the Press Act, has the right to publish writings without an authority or another public body preventing this in advance. It is important that, above all, Swedish individual legal entities have this right. But this law applies to foreign interests, in this case outside the EU.
The name of the law is the screening system for foreign direct investments to protect Swedish security interests. The point, however, is that all investments in protected activities must be reported - everything. This applies regardless of whether it is Swedish individuals or legal entities, EU citizens or others. Everything must be reported and screened, but then it is only those that belong outside the EU that can be prohibited. In Finland, which has implemented the same regulatory framework, the control only covers investments by actors outside the EU and EFTA. But in Sweden, everyone is covered.
The government and the committee say, regarding media companies with reference to the Freedom of the Press Act – which is good – that it is impossible to treat foreign and Swedish citizens differently and that Swedish media companies have constitutional protection against having to register. So far, that is where we stand.
But there are exceptions permitted in the fundamental laws concerning precisely foreign citizens. There is a possibility in the fundamental laws to include media companies in the review, but the government says no to that. It is this same government that, in the directives to the investigation on the Public Order Act, which was recently appointed, opens up for using just this exception from preventing foreign citizens from demonstrating. The government considers that the exception can be used to stop foreign citizens from demonstrating but not to prevent hostilely disposed foreign states and actors from buying Swedish media corporations. The Center Party had included the media companies in the law.
Madam Speaker! Now we come to the design and implementation of the law. At present, there is a lack of clarity in the bill in the form of important definitions and delimitations. A piece of legislation does not become clear by the government saying that it is clear. It becomes clear when professional industry organizations that safeguard Sweden's security perceive it as clear and predictable.
We have already touched upon the fact that all direct investments in activities critical to the country's security must be reported and reviewed. The reviewing authority has, according to the bill, 25 working days to make a decision from the time the notification is complete.
Svemin is a trade organization that brings together mines, mineral producers, and metal producers in Sweden. They welcome that the area is being regulated, but they wonder when the notification should occur in their long processes. Is it in the prospecting phase, is it when one receives an investigation permit and raises money for it, or is it when one receives a decision on a processing concession and proceeds? Is it at both occasions, or is it at every occasion where money is raised that these 25 working days of review should run? There will be many so-called standstill periods. This is far too unclear. The whole thing is to be introduced on December 1, and there are no transitional provisions or threshold values.
Again: A great responsibility rests on the government to ensure that this does not become another long bench for important, necessary, and secure legal investments in our country - for the jobs, for the green transition, and for the whole country. Sweden and the business community do not need more uncertainty in an already uncertain world. We need legislation that makes Swedish investments in our country simple and fast. We do not need large resources to be spent on reviewing investments that are unproblematic.
What the government highlights as the reason for everything to be scrutinized is primarily the risk of front organizations – that foreign states and hostile actors hide behind Swedish companies. It must be admitted that there is always a risk of this, but the question is whether extensive bureaucracy for everyone solves the problem in the best way. No law will ever be able to replace intelligence gathering, surveillance, and qualified analytical work by our skilled intelligence services.
I want to apologize if it is perceived by anyone that I and the Center Party are taking Swedish security lightly. We really do not; this is important legislation. But I want to repeat what Svenskt Näringsliv said on Monday in a comment on the law: The risk with the legislation is that one is catching mosquitoes and swallowing camels.
We in Centerpartiet stand behind all our three reservations, but I move for approval only of reservation 1.
Gudrun Nordborg (V)
Madam Speaker! I have a question, and it concerns the media companies.
Ulrika Liljeberg writes in her text in the reservation that one should have chosen to also include the review of foreign direct investments in Swedish media companies. She also repeats this here today.
It is also stated in Ulrika Liljeberg's text that it is a position that she shares with several referral bodies with good insight into the issue. I have tried to find views from the referral bodies in the bill, but I have not succeeded. On the other hand, I find a paragraph on page 168 with a heading regarding that the Media Inquiry does not make any assessment in this part. It is also written that the referral bodies do not comment in this part. This makes me very curious about what the background is for why referral bodies are mentioned in the way they are in the reservation.
Ulrika Liljeberg (C)
Madam Speaker! I will admit directly that I do not have the investigation in my head so that I have track of the page numbering. My memory, however, is that there are several instances - TV companies, MSB and others - that consider that precisely media companies should be included in the review system.
Gudrun Nordborg (V)
Madam Speaker! I then wonder if the government is completely mistaken when it writes that the investigation did not concern this issue and that no referral bodies have raised it.
Ulrika Liljeberg (C)
Madam Speaker! Again: This has been up in the investigation, but my memory - I should have had the investigation with me - is that this has not been proposed in the investigation and above all not in the bill. I will leave that unsaid. But there is no doubt that the matter has been up and is touched upon in the investigation and the bill, and as I pointed out in the statement and in our reservation, we believe that it should have been included.
Pontus Andersson Garpvall (SD)
Madam Speaker! In this report, the committee addresses a screening system for foreign direct investments to protect Swedish security interests.
In the proposition, a new law is proposed that gives a review authority the possibility to review foreign direct investments and, if necessary, prohibit them. In this context, it can be mentioned that as early as 2019, the Riksdag announced to the previous government that it should as soon as possible implement measures to enable the review of foreign direct investments within protected areas. It is therefore welcome that the new government now returns with a proposition to the Riksdag in this very urgent matter.
Madam Speaker! In recent years, we have seen a number of examples of attempted foreign investments in areas that can be considered sensitive to both Sweden's and the Swedes' security. Two such examples are that the Chinese telecommunications company Huawei is eager to participate in the expansion of the Swedish 5G network and that the Chinese company Nuctech won the procurement for security control at Arlanda in 2022.
One of the problems with Chinese ownership in this case is that in 2017, China introduced a new so-called security law which stipulates that all Chinese citizens and organizations, even abroad, are obliged to provide information if the Chinese state demands it. With this in mind, one can ask whether these investments in the Swedish 5G network or in security controls at Swedish airports are a result of the companies seeing opportunities for economic profit or if they have entirely different interests.
For economically weaker countries or for stronger countries in economically weaker times, it may be considered attractive to have generous investments from countries such as China. But their interest in investments abroad is not only economic but is also about being able to obtain both information and increased influence.
Madam Speaker! Already in 2018 in the UN General Assembly, former President Donald Trump warned of the dangers of Germany's dependence on Russian energy and emphasized the need for the countries in the West to become independent of foreign powers' energy resources. The German representatives in the audience shook their heads at the President but certainly realized upon Russia's invasion of Ukraine how right he actually was.
Why do I raise this then? Well, because today China accounts for around 40 percent of all wind power constructions in the world and for a total of 86 percent of the world production of the rare earth metals needed for the production of wind power. Between 2017 and 2022, the Chinese company CGN accounted for one-fifth of the investments in Swedish wind power.
And wind power is just another example of China's attempts at foreign investments. If we make ourselves dependent on wind power, we also make ourselves dependent on China. Thus, thanks to its security law, the Chinese state also receives the information that is required from the Chinese companies, all in the name of the green transition. Let us hope that the West has learned from its previous mistakes regarding energy dependence on foreign superpowers.
Madam Speaker! It is highly important that an oversight system is put in place. We live in a global world where all countries are dependent on one another, I do not deny that at all, but energy, information technology, and security are not commodities like all others.
The Riksdag announced to the government at that time over four years ago that a review system needed to be put in place. It is very positive that the current government is now returning with a bill that ensures we get a review system in place and also the possibility to ban these investments, this for both Sweden's and the Swedes' security.
Mikael Damsgaard (M)
Madam Speaker! We live in a globalized world. Swedish companies are successful in a global market and make acquisitions and other investments across virtually the entire world. In the same way, foreign companies make investments in Sweden.
For Sweden as an open economy with extensive international trade, foreign direct investments are important for our business sector's development. At the same time, there are risks when foreign actors invest in security-sensitive activities in Sweden. The majority of the foreign investments made in Swedish companies are valuable and completely unproblematic, but some of them are associated with major security risks. The security policy developments have, for example, shown the risks of a foreign power controlling critical infrastructure and gaining influence within, for example, the defense and security industry.
Under today's regulatory framework, there are not sufficient conditions to prevent foreign investments in Swedish companies whose activities, information, or technology are significant for Sweden's security or for public order or public safety in Sweden. Such investments must be able to be scrutinized and, if necessary, stopped.
In an EU regulation from 2019 that was previously addressed, a legal framework was created for the screening of foreign direct investments that may affect security or public order. In most member states, regulations regarding foreign direct investments have already been introduced. In the bill that the Riksdag is now debating and will take a position on, the government proposes an entirely new regulatory framework that makes it possible to block investments that could adversely affect Swedish security interests. As mentioned, national screening systems are already in place in the majority of EU member countries. It is important that we get this in place in Sweden as well.
In the proposal, a screening system is suggested which shall cover investments in companies that carry out socially important activities. Socially important activity is defined in the law as activity, service, or infrastructure that maintains or ensures societal functions that are necessary for society's basic needs, values, and security.
The review system shall also cover security-sensitive activities according to the Security Protection Act, activities concerning critical raw materials, for example the mining industry, as well as activities that to a large extent process sensitive personal data or location data.
The Government or the authority designated by the Government shall issue regulations on which activities shall be covered by the Act. In the investigation underlying the bill, it is proposed that the Inspectorate for Strategic Products, ISP, shall be appointed as the auditing authority.
The review system means that the person who wishes to carry out an investment in a protected activity shall be obliged to report this to the review authority in cases where the investor would obtain direct or indirect influence over the activity.
Within 25 days after the notification has been received, the review authority shall decide to either leave the notification without action or initiate a review. The review authority may also initiate a review on its own initiative. The review shall be completed within three months from the time the authority has decided to initiate the review. But if there are special reasons, the review may continue for up to six months.
If the review finds that the investment is judged to be harmful to Sweden's security or to public order and security in Sweden, the investment shall be prohibited or approved with special conditions.
The screening system will be applicable regardless of the investor's nationality or seat. This means that even Swedish investments in protected activities will be covered by the screening procedure. If domestic investments were excluded from the screening system, it would mean a risk that foreign investors could bypass the regulatory framework. This could, for example, occur by investments in a Swedish company being made via another Swedish company – which is not entirely uncommon – but this company may ultimately be owned by foreign interests. It could also be pure front circumstances where a Swedish citizen makes investments on behalf of a foreign power.
This is a risk that must be taken seriously. In that case, there is an obvious risk that, for example, China, which I have touched upon previously, could use that type of procedure and thereby completely bypass the screening process and the possibility for Sweden to stop direct investments in the country. I therefore think that Centerpartiet takes that risk a bit too lightly. If one ends up in such a situation, it would also reduce the transparency regarding ownership structures and who is behind the investments.
Regarding the fact that the review system should also cover investments in media companies, the reserve party, Centerpartiet, and in this case Ulrika Liljeberg, highlight highly relevant issues concerning information influence from foreign powers. The Government, however, makes the assessment that a review procedure would conflict with the constitutionally protected freedom of establishment found in the Freedom of the Press Act and the Fundamental Law on Freedom of Expression, and that it is therefore not possible to proceed with such a proposal.
The problem of exempting Swedish investors has been touched upon previously. It would open the door for completely different procedures. It is an important issue, but one must find other ways to address that problem.
Finally, it concerns the evaluation of the legislation, which is also addressed in a reservation. It is the government's responsibility to constantly monitor the application of the law. It is reasonable to expect that this is also done in this case. There are also strong interests when it comes to reviewing and monitoring this legislation, and they will point out if there are any deficiencies.
With this legislation, Sweden obtains a robust regulatory framework that creates the conditions to detect and ultimately stop investments that pose a threat to Swedish security interests. This is welcome and important in a time of such security policy tensions as we have not seen since before the fall of the Berlin Wall.
I therefore conclude by moving for the approval of the committee's proposal in the report in its entirety.
Gudrun Nordborg (V)
Madam Speaker! I begin by moving for approval of the committee's proposal in the report. Vänsterpartiet stands behind it.
I will not delve into many details, but overall I believe it is important that we follow up on this EU regulation so that Sweden does not become an exception when it comes to control over investments in sensitive activities. There, I believe we need to go in step with other countries in Europe.
C's argumentation on how we should relate to media companies has been interesting to see. But as I said, I do not find support in the bill for any reservations that highlight it. I have tried to look at some opponents who should be relevant, but I have not succeeded in finding it. I will therefore stick to what the government says concretely about both the investigation and the referral bodies in the matter. If anyone wants to check further, my reference was page 168 in the bill.
Media companies are one of many relevant areas when we discuss sensitive activities. But I think the government is making a wise argument that we cannot arrive at this legislation in every case without making changes to the constitution. The consequences would become illogical, because there is a general principle that all potential investors need to be scrutinized, regardless of whether they are Swedish or have another nationality. I believe that principle is extremely important to maintain. Otherwise, it would become discriminatory and would clash with many other rules in our legislation and constitutionally protected rights.
Ulrika Liljeberg (C)
Madam Speaker! I question Member of Parliament Nordborg's reading of the bill. On page 46 of the same, I read point 5.6 regarding investments in media companies. In the heading, it states that media companies shall not be covered. It further states that this is in line with both the investigation's and now the government's position.
In the proposal, however, I read: "The referral bodies: The Swedish Press and Broadcasting Authority (MPRT), the Swedish Civil Contingencies Agency (MSB), the Swedish Defence Research Agency, TU - Media in Sweden and TV4 consider that investments in media companies should be covered by the review system." Furthermore, the Swedish Press and Broadcasting Authority states "that, in the event that there are review systems in other countries that cover investments in media companies, there is a risk that Swedish media companies become more attractive for such investments which can entail security risks."
So it has been raised. It has been considered, and the objections that have been put forward both in the bill and here today by representatives for the government parties have been made. But a different assessment has been made. We regret that.
It would, however, be interesting to hear if Member of Parliament Nordborg makes a different interpretation of the bill and if there are other writings.
Gudrun Nordborg (V)
Madam Speaker! I searched in the bill and found what I just quoted on page 168. There it says that the investigation has not concerned the media, and the referral bodies do not comment. There are therefore two different passages in the bill, but I have to agree with the member that there are different positions on how to approach the media.
I am glad that it is revealed that there are two different versions in the bill, but I maintain that the substantive argumentation continuing from the government's side as to why the media should still not be included holds. I therefore stand by my position.
Ulrika Liljeberg (C)
Madam Speaker! I would rather say that it concerns different aspects than that it is exactly the same issue being addressed. But for the sake of clarity, I can tell everyone listening that it is what is on page 46 that I refer to and have based myself on in my statements and motions.
Gudrun Nordborg (V)
Madam Speaker! I thank the member for this question and for us having clarified that there are two different positions in the bill.
Torsten Elofsson (KD)
Madam Speaker! Today we are debating a new screening system for foreign direct investments.
On the Riksdag's table lies a government bill on introducing a screening system to protect Swedish security interests. In short, the proposals mean that a screening authority shall be given the possibility to review foreign direct investments and, if necessary, limit or stop them. This could involve foreign direct investments in critical infrastructure, energy and new technology - activities that are strategically important for our society.
We Christian Democrats note that it is high time that this regulatory framework is put in place. Sweden should, of course, be welcoming to foreign investments, but they must not jeopardize national security and Swedish security interests. We see that the security situation has deteriorated over several years, both globally and in our immediate vicinity.
Säpo has specifically pointed out state actors such as Russia, China and Iran as countries that are acting increasingly offensively against Sweden. It is clear that we need to consider the risks that exist when a foreign power acquires and controls critical infrastructure and society-important activities, and there needs to be a possibility to stop such acquisitions. I would therefore like to begin by moving for approval of the government's proposition.
Madam Speaker! Sweden shall, as has been said, of course be welcoming to foreign direct investments. Sweden is a small trade-dependent country, and foreign investments are of great importance for Swedish business and our entire society. It is clear that Sweden shall continue to be an attractive country for investors. It is important to emphasize that.
Foreign investments and the supply of knowledge and expertise are needed to build a strong Sweden. It creates jobs and economic growth and strengthens our competitiveness. But at the same time as Sweden must be an attractive country for foreign investors, we must also have tools to be able to stop acquisitions that can threaten our security interests, for even though the majority of the foreign investments made in Swedish companies are useful and unproblematic, there are some of them that are associated with great risks.
Madam Speaker! We know that countries such as China and Russia constitute potential threats. Acquisitions of important infrastructure are a central part of their strategy to acquire economic and military power. All around the world, China makes strategic investments in ports, railways, coal power plants, and airports. Chinese companies also already today own a large part of Swedish wind power. Between 2017 and 2022, 90 billion kronor were invested in new wind power in Sweden. Almost one-fifth of this involved the Chinese company CGN. Similar future investments in critical infrastructure could be affected by the new regulatory framework.
Madam Speaker! A question that has been raised in the debate is whether the review system should also cover foreign direct investments in media companies. This has been discussed here today against the background that there is a risk that foreign powers may attempt to influence decisions, perceptions, and behaviors of various actors in Sweden by spreading misleading or incorrect information through various media. This, in turn, could entail risks to our security and public order.
In the investigation that preceded the bill, it is stated, with reference to the freedom of establishment, that a constitutional amendment would be required to make it possible to limit the ability of Swedish citizens and Swedish legal entities to make investments in media companies. I have listened to what the representative of the Center Party, Ulrika Liljeberg, has said, but I note that the alternative mentioned in the investigation is to make an exception in the law which means that an investment in a media company made by a Swedish citizen or by a Swedish legal entity is exempted from the reporting requirement.
The problem with such an exception is that it would be easy to bypass by having a foreign power carry out investments through Swedish physical or legal persons. It would result in a regulatory framework that risks counteracting the purpose of making foreign investments in media companies reportable. We Christian Democrats therefore share the inquiry's and the government's assessment in this matter, even though I have listened with great interest to the Center Party's reservation.
In summary, the need for a screening system is great. Foreign direct investments contribute a lot to Swedish society in the form of capital but also knowledge and expertise that contribute to our prosperity and strengthen our competitiveness. But they can also entail significant risks, and in that case, we need to be able to protect Swedish security interests. It is therefore high time that this regulatory framework is put in place. With that said, Madam Speaker, I move for approval of the government's proposition.
A screening system for foreign direct investments to protect Swedish security interests
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.