New laws to review foreign investments that could threaten national security rolled out from today
The National Security and Investment (NSI) Act – which the government describes as “the biggest shake-up of the UK’s national security regime for 20 years” – will fully commence today (4 January).
The new laws will allow the government to scrutinise and intervene in certain acquisitions made by anyone, including businesses and investors, that could harm the UK’s national security.
Areas of the economy to be covered by these new rules include security-sensitive sectors such as Defence, Artificial Intelligence and Energy.
The government will also be able to impose certain conditions on an acquisition or, if necessary, unwind or block it – although it is expected this will happen rarely and the vast majority of deals will require no intervention and be able to proceed without delay.
The government says the NSI Act will give investors additional certainty and clarity and cement the UK’s world-leading reputation as a global champion of free trade and investment as well as an attractive place to invest, with more transparency and more simple, efficient clearance processes for relevant acquisitions.
By introducing a mandatory notification and pre-closing clearance requirement for acquisitions in “sensitive” sectors, the new rules bring the UK’s review system in line with regimes of its intelligence allies such as the United States, Australia, Canada and New Zealand.
Business Secretary Kwasi Kwarteng said: “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.
“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.”
The government maintains that the vast majority of acquisitions will require no intervention and will be able to proceed quickly and with certainty in the knowledge that the government will not revisit a transaction once cleared unless false or misleading information was provided.
The government has published new guidance to help businesses and investors to understand their obligations under the new rules, including how to assess whether the government must be notified of an acquisition, and what to expect when going through the NSI notification and assessment process.
