UK laws are being bolstered for investments in businesses deemed to be sensitive to national security.
On 4 January 2022, the National Security and Investment Act came into force. The government say it is the biggest shake-up in 20 years in regulations of the UK’s system for screening investments for risks to national security.
The Act will allow the government to impose conditions on investments and, if necessary, block them.
New guidance has been issued encouraging potential investors to get ready for the changes.
There is now a legal requirement to tell the government about acquisitions in 17 areas. These are:
- 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 Technologies
- Suppliers to the Emergency Services
- Synthetic Biology
- Transport
The government can call in an acquisition for assessment if it reasonably suspects that it is a qualifying acquisition, but there will be three forms available; for mandatory reporting; voluntary reporting, where you believe an acquisition may be covered by the Act; and a retrospective application form, for investors who believe they have completed an application that they should have declared.
Once a form has been accepted, the government will have 30 days to assess it and come to a decision. This could lead to your application being allowed to proceed, either with or without conditions, be blocked or be subject to a further period of scrutiny.
There are civil and criminal penalties for completing a notifiable acquisition without gaining the necessary approval. A civil penalty could require you to pay up to five percent of your organisation’s global turnover or £10 million, whichever is greater.
This is a complex new law. If you require further information and guidance, please book an introductory call or contact us via phone or email.
