On September 20, 2012, Canada’s intelligence agency, the Canadian Security Intelligence Service (CSIS), issued its 2010-2011 Public Report.
In light of the ongoing federal review of the CNOOC/Nexen transaction, heightened debate regarding the conditions for state-owned-enterprise (“SOE”) investment in Canada and fact that some Canadian investments can be subject to a national security review, the following discussions of the Investment Canada Act, SOEs and Canadian national security caught my eye:
“Some foreign investments in Canada can also pose wider national security concerns. The Investment Canada Act provides the Government of Canada with a mechanism to ensure that foreign investments are within Canada’s national security interests. CSIS plays a contributing role by advising government of the national security implications that might arise from a proposed foreign investment.
…
A related security issue is one of foreign investment. Canada is a trading nation, with economic wealth, advanced infrastructure and vast potential – all of which make Canada a natural and attractive prospect for foreign investors. While the vast majority of foreign investment in Canada is carried out in an open and transparent manner, certain state-owned enterprises (SOEs) and private firms with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.
When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests. The foreign entities might well exploit that control in an effort to facilitate illegal transfers of technology or to engage in other espionage and other foreign interference activities. CSIS expects that national security concerns related to foreign investment in Canada will continue to materialize, owing to the increasingly prominent role that SOEs are playing in the economic strategies of some foreign governments.”
For a copy of CSIS’ report see: CSIS – Public Report 2010-2011.
____________________
For more information about our regulatory law services: Contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
