On 20 July 2021, UK GVT issued guidance to help prepare for new regime.
- UK GVT issued guidance and urged businesses / investors to get ready for changes to UK's strengthened national security regime which will commence fully on 4 January 2022.
- Follows UKP April 2021 national security and investment act (NSIA 2021).
- NSIA 2021 is the biggest shake up of the UK’s national security regime for 20 years.
- Will advance UK gold-star reputation as attractive place to invest, while strengthening UK GVT powers to investigate and intervene in potentially hostile foreign investment.
- Investors given more efficient clearance processes for relevant acquisitions and more transparency about what types of deals the government could examine and processes.
- Once the Act is commenced, the government will be able to scrutinize 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.
- 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.
- Powers will not apply to acquisitions which took place prior to 11 November 2020.
- Once fully commenced, investors planning an acquisition in a defined sensitive area of UK economy may need to get approval from government before they can complete.
- Before laws are commenced on Jan. 4, 2022 businesses and investors encouraged to read a range of guidance published by government, more will follow later in 2021.
- Including on how to prepare for the new rules, how NISA 2021 could affect people or acquisitions outside UK and how act works alongside other regulatory requirements.
- Sector-specific guidance for the higher education and research-intensive sectors.
Draft Notifiable Acquisition Regulations
- Issued draft regulations showing acquisitions subject to mandatory notification rules.
- Follows UK GVT Mar. 2021 response to consult on mandatory notification.
- National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021 issued for information, draft subject to change.
- Sets out the proposed acquisitions of qualifying entities in the 17 sectors of economy that will be subject to the mandatory notification requirements set out in NSIA 2021.
- UK GVT has sought to ensure that these proposed descriptions will enable potential acquirers to self-identify for the purposes of the mandatory notification requirement.
- After further targeted engagement with stakeholders following government response to consultation, proposed descriptions in draft instrument have been refined further.
- UK GVT expects to lay final notifiable acquisition statutory instrument later in 2021.
Consultation on Use of Call-In Power
- UK GVT also published a draft statement on the Secretary of State’s expected use of the NSI call-in power, which is open for public consultation until 30 August 2021.
- The statement will help parties to an acquisition to understand whether their acquisition is likely to be called in by the Secretary of State and to plan accordingly.
- Sought views ahead of final version being laid before Parliament in due course.