• UK GVT published further details about the sectors within scope of the mandatory notification regime under the proposed national security and investment bill.
• Follows UKP November 2020 issued bill on national security and investments.
• And follows UK GVT November 2020 consultation on acquisition notification.
• Also follows UK GVT November 2020 issued national security paper response.

Summary

• Published revised definitions of sensitive sectors in scope of mandatory notification for the new national security regime under the national security and investment bill.
• It will ensure investors and businesses having to tell the government about proposed acquisitions have certainty over the targeted and proportionate approach.
• National security bill will boost UK’s ability to investigate, intervene in potentially hostile mergers, acquisitions, other deals that could threaten national security.
• Definitions will help strike balance between ensuring national security is safeguarded, and keeping businesses caught by mandatory notification regime to a minimum.

Revised Definitions

• Under the bill, investors, businesses will have to notify a dedicated government unit via a digital portal about certain types of transactions in designated sensitive sectors.
• Including civil nuclear, defence and advanced robotics, with investments screened faster than current regime, assessing transactions within 30 working days, or quicker.
• In November 2020, UK GVT consulted on how definitions of 17 sectors in scope of mandatory notification could be refined to ensure they are targeted and proportionate.
• Many of these sectors are emerging, e.g. quantum technologies and synthetic biology.
• Definitions set out clear parameters so acquirers can judge if planned deals in scope.
• They will ensure that parties involved in deals that aren’t captured by the regime have the clarity they need to proceed, which will be the majority of transactions.
• List may be further refined following continued engagement with sector stakeholders.

National Security and Investment Bill

• Mandatory notification will ensure UK GVT is informed of sensitive acquisitions before they take place, and can take action to national security risks before a deal completes.
• Mandatory regime is supported by a voluntary notification option for relevant acquisitions across the rest of the economy, and a call in power for secretary of State.
• This power allows secretary of State to scrutinize acquisitions in the wider economy which were not notified to government but may raise national security concerns.
• Investments will be screened faster than the current regime, with legally set timelines.
• Majority of acquisitions will require no intervention, can proceed quickly, with certainty.
• UK GVT will not revisit a transaction once cleared unless given false/misleading data.

Policy Statement

• On same date, UK GVT issued a policy statement for each of the statutory instruments in the national security and investment bill needed for commencement of new regime.
• There are 10 delegated powers within bill, 8 are needed for regime commencement.
• UK GVT intends for national security, investment regime to commence by end 2021.

Next Steps

• The final definitions will be set out in regulations following royal assent of the bill