The Government will be allowed to intervene in mergers, investments, and acquisitions where national security could be compromised, it has been announced.
It follows the introduction of the National Security and Investment (NSI) Act – described as “the biggest shake-up of the UK’s national security regime” in more than two decades.
Under the new laws, the Department for Business, Energy & Industrial Strategy (BEIS) will be empowered to “scrutinise and intervene” in certain acquisitions made by anyone, including businesses and investors, that could “harm the UK’s national security”.
Businesses will be required to notify the Government of certain acquisitions that fall into one of 17 protected areas. These include advanced materials, advanced robotics, artificial intelligence, civil nuclear, communications, computing hardware, critical suppliers to Government, cryptographic authentication, data infrastructure, defence, energy, military and dual-use, quantum technologies, satellite and space technology, suppliers to the emergency services, synthetic biology, and transport.
The legislation will enable the Government to impose “certain conditions” on an acquisition or, if necessary, unwind or block it.
But the Government added that the “vast majority” of acquisitions will require no intervention and will be able to proceed quickly and with certainty.
It means that investors must now question whether an acquisition falls within one of the 17 sensitive sectors and is within the scope of the new laws. The Act applies to acquisitions made from 12 November 2020.
Commenting on the legislation, Business Secretary Kwasi Kwarteng said the move will give investors “additional certainty and clarity” and “cement the UK’s world-leading reputation as a global champion of free trade and investment”.
“The UK is world-renowned as an attractive place to invest but we have always been clear that we will not hesitate to step in where necessary to protect our national security,” he said.
“The new investment screening process in place from today is simple and quick, giving investors and firms the certainty they need to do business, and giving everyone in the UK the peace of mind that their security remains our number one priority.”
Click here to learn more about the National Security and Investment Act 2021.
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