National Security and Investment Act
The new National Security and Investment Act enhances the government’s ability to investigate and intervene in mergers, acquisitions and other deals that could threaten the UK’s national security. The new measures are designed to simplify and speed up the investment screening process for investors and businesses. A new Investment Council will act as an advisory body to the UK government on foreign investment, made up of private sector global senior leaders from a variety of industries, including technology and infrastructure. The Council will operate alongside the recently formed Office for Investment, tasked with landing high-value investment opportunities in infrastructure, clean technologies and R&D.
The Act means that:
- the government will be able to scrutinise, impose conditions on or, as a last resort, block a deal wherever there is an unacceptable risk to Britain’s national security
- a dedicated government unit, the Investment Security Unit, will be housed within BEIS
- investors and businesses will have to notify the Unit through a digital portal about certain types of transactions in designated sensitive sectors, such as artificial intelligence
- investors can notify any transaction voluntarily if they believe it has implications for national security
- the government must be notified if a person’s stake or voting rights in a sensitive acquisition surpasses 25%
- the Secretary of State will have the power to ‘call in’ acquisitions in the wider economy which were not notified to government but may raise national security concerns
- transactions are expected to be assessed within 30 working days and often more quickly, with timelines set out in law for the very first time
- the UK’s screening powers will cover intellectual property as well as companies
