Sweden prepares legislation that would block risky foreign investments

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STOCKHOLM, March 16 (Reuters) – Sweden will propose a law this year to allow scrutiny of foreign direct investments in Swedish companies and block those that pose a risk to national security, the justice minister said on Thursday.

“The majority of foreign investments in Swedish businesses are valuable and unproblematic, but some are associated with significant risks,” Justice Minister Gunnar Strommer said in a statement.

“It must be possible to scrutinise such investments and, if necessary, stop them,” he added.

Strommer did not name any countries or specific companies that would be subject to scrutiny.

Western nations, worried by a flow of sensitive technological know-how to China, have increasingly sought to prevent Chinese companies from making certain acquisitions.

The Swedish government aims for the planned legislation, which is at a draft proposal stage, to take effect on Dec. 1 this year.

“This is an extremely important step that Sweden now takes. We do this in line with what other EU member states have already done and we believe we are catching up in a very appropriate way,” Strommer told a news conference.

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