Canada releases guidelines on security review of corporate deals

The Canadian flag flies on Parliament Hill in Ottawa August 2, 2015. REUTERS/Blair Gable

OTTAWA (Reuters) - The Canadian government released on Monday the guidelines of its national security review of investments, laying out what factors it looks at when considering whether a corporate deal poses a security risk.

An investment by foreigners that takes over all or part of a Canadian company or establishes a new business in Canada can be subject to a national security review.

Among the issues the government may look at are what effects the investment could have on Canadian defense capabilities, the security of critical infrastructure and the transfer of sensitive technology out of the country, according to the guidelines.

The government may also scrutinize the potential for the investment to allow for foreign surveillance or to have an impact on Canada’s foreign relationships.

Canada can block the proposed investment or set specific conditions on the deal if it so chooses. The government has 45 days from when it is notified of an investment to decide whether a national security review is necessary, which can also be extended by an additional 45 days.

The release of the guidelines is meant to give greater clarity to companies looking to invest in Canada, the government said. Canada has come under fire in the past for what critics have said is an opaque process.

The government said it plans to introduce changes to existing legislation that will require annual reporting on the administration of its security regulations.

Reporting by Leah Schnurr; Editing by Matthew Lewis