Australia's national security; and the contribution of an investment to the country’s economy and community.<sup>24</sup>  **Canada** : On March 12, 2009, Canada amended its foreign investment law.<sup>25</sup> Apart from changes that liberalized the country’s foreign investment review process of general application, the amendment also included a national security test for proposed investments in Canada, which applies to a much broader range of proposed transactions than the pre-existing “net benefit” test. Now, a proposed investment may be subject to national security review even if it does not exceed the threshold for the net benefit review, whether the investment is proposed or already implemented, and even in cases in which a minority interest is acquired in a Canadian business (i.e., where there is no acquisition of control of a Canadian target). As in the case of other countries, there is no definition of what could be “injurious to national security,” and there is a distinct possibility that the test could be used to target certain types of sovereign investment. The details of the national security review process were outlined in draft regulations published on July 11, 2009.<sup>26</sup>  **Japan** : According to its Foreign Exchange and Foreign Trade Act, foreign investments that potentially impair national security (not defined), disturb the maintenance of public order, hinder the protection of public safety, or have significant adverse effect on the “smooth management of the Japanese economy” must be screened by the Ministry of Finance and the Ministry “having jurisdiction over the business.” The Act was strengthened in 2007 through a regulation that requires foreign investors to notify the Government 30 days in advance if they planned to acquire 10 percent or more of listed companies with technology that can be used in weapons systems.<sup>27</sup> Additionally, in response to the global financial crisis and recession, several developed countries introduced emergency measures, among other things, to bolster the stability of their financial services sectors and to increase the availability of credit to other parts of their economies. A recent survey of these measures found “early evidence of differentiation between foreign and domestic actors” in these emergency plans. For instance, the authors of the survey noted that, under the U.S. Emergency Economic Stabilization Act, domestic institutions are “the majority if not exclusive recipients of capital injections,” and measures taken in the United Kingdom and Germany to promote credit throughout the economy may result in “the provision of credit solely to national

> 24 “Government improves transparency of foreign investment screening process,” February 17, 2008, available at: <u>http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2008/009.htm&pageID=003&min=wms &Year=&DocType. An Australian Treasury Media Release (No. 89) of August 4, 2009, entitled</u> “Reforming Australia’s foreign investment framework” raised the threshold for a review of private FDI in Australia. As a result, and based on 2008-2009 data, “around 20 per cent of all business applications will no longer be screened by the Foreign Investment Review Board” (ibid). 25 The amendments are available at:

> <u>http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3656090&Langu&File=611#194.</u>

> 26 Available at: <u>http://www.gazette.gc.ca/rp-pr/p1/2009/2009-07-11/html/reg3-eng.html. See also Subrata</u> Bhattacharjee, “National security with a Canadian twist: the Investment Canada Act and the new national security review test,” _Columbia FDI Perspectives_ , no. 10, July 30, 2009.

> 27 Available at <u>http://www.meti.go.jp/policy/anpo/kanri/top-page/Taro13-foreign-exchange-and-for.pdf.</u> The Act dates to 1949 and regulates foreign transactions; it was amended in 1980 and 1998 to liberalize these transactions. See also _Financial Times,_ September 6, 2007. The rules contain a list of 137 products.

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