Parliament passed the Significant Investments Review Bill today (Jan 9). This provides Singapore with an updated toolkit to safeguard national security; the Bill addresses threats posed by certain significant investments into entities which the Government designates as “critical”.
During the second reading of the Bill, Minister of Trade and Industry Gan Kim Yong said that as an open economy, Singapore is vulnerable to forces seeking to undermine its national security interests through ownership and control of critical business entities.. The proposed legislation manages these threats.
“It is important to have adequate and effective investment management measures to safeguard our national security, and to ensure our economy remains resilient. This will provide businesses and investors with continued confidence in Singapore as a stable, trusted, and well-connected global business and investment hub,” said Minister Gan.
Mr Gan stressed that the legislation was calibrated to protect Singapore’s national security interests while minimising the impact on affected stakeholders. This will ensure that the national corporate landscape remains vibrant and attractive to bona fide investors.
As most critical entities are already covered by existing sectoral legislation, the Minister-in-charge can designate a specific entity based on national security considerations. Mr Gan said that he expects to do so for “only a handful” of entities, reducing the regulatory burden of the Bill. He also outlined the details of how the Minister-in-charge will be able to exercise oversight over the ownership of these critical entities. Other actions include controlling changes involving parties in positions to influence and direct actions of designated entities, and issuing remedial directions under various circumstances.
Under the provisions, the Government can exercise powers against any entity that has acted against Singapore’s national security interests, regardless of whether it is designated or not. It can also take action against any individual regardless of citizenship or residency status, and against any entity regardless of type or domicile location. The Bill also spells out the penalties and the range of enforcement powers that authorised officers can exercise.
Our MPs debate the Bill
The Chairman of the Government Parliamentary Committee for Finance and Trade and Industry Liang Eng Hwa (Bukit Panjang SMC) supported the targeted approach laid out in the new Bill. However, he cautioned on the need for safeguards to ensure the judicious use of special administration orders under the Bill.
MP Don Wee (Chua Chu Kang GRC) pointed out that similar legislations had been passed in many countries in recent years. More nations are expected to follow as governments scrutinise foreign direct investments even more rigorously to enhance economic resilience and national security. “The new bill could plug the policy loopholes created by today’s international strategic investment environment,” he said.
Meanwhile, MP Yip Hon Weng (Yio Chu Kang SMC) urged the Government to carefully consider the clarifications offered, scrutinise the potential ramifications of the Bill, and glean valuable insights from the experiences of other countries. “Only through comprehensive deliberation can we refine this legislation into a robust shield that protects our national interests without stifling innovation and investment,” he said.