Bernardine Adkins
Partner
Head of EU, Trade and Competition
Article
6
On 29 April 2021, the National Security and Investment Bill became law as the National Security and Investment Act (the "NSI Act").
As set out in our previous alert on this topic, the UK's new investment screening regime consists of three review mechanisms, namely:
The passage of the NSI Act into law means that certain transactions (so-called 'notifiable acquisitions') must obtain approval from the Secretary of State prior to completion. Completing a notifiable acquisition without such approval is a criminal offence.
A notifiable acquisition arises where:
However, while the NSI Act creates the notion of a 'notifiable acquisition', there is currently no mechanism through which to notify the Secretary of State of such a transaction.
The Act provides that regulations (i.e. a statutory instrument) must be passed to prescribe the form through which businesses must submit notifications to BEIS under the mandatory regime.
The Government has not yet published these regulations, but it has published a draft set of questions that it proposes to include within the National Security and Investment notification form.
Until these regulations are passed into law - which the Government intends to do by the end of this year - businesses involved in transactions that may be 'notifiable acquisitions' should continue to consider approaching BEIS on a more informal basis and self-assess the extent to which their transactions could give rise to a national security risk.
BEIS has encouraged businesses whose transactions may be caught within the ambit of the new regime to contact via email to obtain "informal guidance".
While the Government has not published formal guidance as to how to undertake the self-assessment exercise, the Government welcomes early engagement from investors and businesses and invites them to review the "statement of policy intent".
When deciding whether to exercise its "call-in" right, the Secretary of State must have regard to the statement of policy intent. The Statement of Policy Intent identifies three types of risk:
The Government has also published a series of fact sheets, which provide further information about each of the provisions in the Bill.
However, there continues to be uncertainty as to how 'trigger happy' the Government will be in the exercise of its "call-in" right.
Contact our EU, Trade & Competition team who can assist you to undertake this self-assessment and advise on engaging with BEIS.
Footnotes
[1] A full list of the proposed mandatory sectors is available at: National Security and Investment: Sectors in Scope of the Mandatory Regime.
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