- The National Security and Investment Act - the biggest shake up of the UK's national security regime for 20 years - to be commenced fully from 4 January 2022
- businesses and investors urged to get ready for the changes, with guidance published to ensure a smooth transition to the new rules
- new laws will advance the UK's gold-star reputation as an attractive place to invest, while strengthening government's powers to investigate and intervene in potentially hostile foreign investment
Businesses and investors are being urged to get ready for changes to the UK's strengthened national security regime which will be commenced fully on 4 January 2022.
The National Security and Investment Act modernises the government's powers to investigate and intervene in mergers, acquisitions and other deals that could threat the UK's national security.
The new regime will see investors being given more efficient clearance processes for relevant acquisitions as well as more transparency about what types of deals the government could examine and the processes for doing so.
This will give investors additional certainty and clarity as the UK enshrines its status as a global champion of free trade and investment.
The regime also means new rules for businesses. Once the Act is commenced, the government will be able to scrutinise and intervene in certain acquisitions made by anyone, including businesses and investors, that could harm the UK's national security, but the regime will be targeted and proportionate. The government will be able to impose certain conditions on an acquisition, or, if necessary, unwind or block it - although the government expects to do this rarely and the vast majority of deals will be able to proceed without delay.
The Act also grants government a 5-year retrospective power to call in acquisitions in the wider economy which were not notified, but may raise national security concerns. However, these powers will not apply to acquisitions which took place prior to the Act's introduction to Parliament (11 November 2020), so businesses and investors have certainty about historical deals.
Once the Act fully commences, investors planning an acquisition in one of the defined sensitive areas of the UK economy may need to get approval from the government before they can complete it.
Before the new laws are commenced on 4 January 2022 businesses and investors are encouraged to read a range of guidance published by the government today, to ensure they understand this new process. More guidance will follow later this year.
Business Secretary Kwasi Kwarteng said:
Protecting the UK's national security is of paramount importance to this government. Now that our investment screening regime has been strengthened, the government will be able to take swift and decisive action against potentially hostile foreign investment.
This robust regime will also make the investment screening process simpler and quicker for investors and businesses - giving them the certainty they need to do business in the UK - and I urge them to make sure they are ready for the changes coming into force on 4 January 2022.
The government has also been working closely with investors and businesses, including through a cross-sector Expert Panel, to ensure they understand what is new.
The Investment Security Unit - a dedicated hub that sits within the business department - will provide a single point of contact for businesses wishing to understand the Act and notify the government about transactions.
The unit will review transactions and coordinate cross-government activity to identify, assess and respond to national security risks arising from foreign direct investment - providing certainty for businesses that they will not be targeted and exploited by potentially hostile actors.
Investments will be screened much more quickly than the current regime, assessing transactions within 30 working days - and often faster - with timelines now set out in law, rather than by the government on a case-by-case basis as is currently the case.
Businesses are urged to contact the hub using the email address
