A national security review under the Investment Canada Act can risk delaying, blocking, or unwinding a transaction. The Canadian government has issued guidelines for the national security review process, including factors it may use to determine whether it will conduct a review. Investments involving Canada’s defence capabilities and interests, sensitive technologies and know-how, controlled goods and technology, critical infrastructure, foreign intelligence and activities of illicit actors will attract closer inspection, which may lead to a national security review.
Canada’s guideline factors explicitly include concerns related to export controls and controlled goods, and may also involve sanctions, anti-corruption and bribery issues. Fasken’s multidisciplinary team can assist companies by helping them to anticipate, prevent and, if necessary, address issues that could raise suspicions of government regulators before a national security review takes place.
- Export Controls: Our team understands how a national security review will canvass the possible effects of the transfer of sensitive technology or know-how outside of Canada, or the potential impacts on Canada’s defence capabilities and interests.
- Controlled Goods: Fasken’s team recognizes how an investment subject to a national security review can change existing or trigger additional requirements under Canada’s Controlled Goods Program, the program regulating access to goods and technology with military or national security significance in Canada.
- Sanctions: As a national security review considers potential impacts on Canada's international interests, including foreign relationships, we advise companies on the risk that a transaction will involve sanctions, identifying obligations imposed on regulated financial institutions or other specified businesses.
- Anti-Corruption and Bribery: Fasken can conduct effective and efficient transactional due diligence of an acquiring entity and advise on deal structuring. This helps reduce the risk of the investment facilitating or involving activities of illicit actors, a factor specified in the national security review guidelines.
