Vertical Markets

Bill covers national security and investment

by Mark Rowe

The Department for Business is introducing the National Security and Investment Bill. It proposes new powers for UK Government to intervene in foreign direct investment that is deemed ‘hostile’ and a threat to UK national security.

An ‘Investment Security Unit’ would sit within the Department for Business, Energy and Industrial Strategy as a single point of contact for businesses. The unit would coordinate cross-government activity to identify and respond to national security risks arising through market activity.

Investors and businesses will be required to notify the Government of transactions in some 17 ‘designated sectors’, such as defence, energy, transport, satellite and space technologies; civil nuclear; and Artificial Intelligence (AI). The Bill if and when made law would extend the Government’s screening powers, with proposed transactions assessed within 30 working days.

For the Government, Business Secretary Alok Sharma said: “The UK remains one of the most attractive investment destinations in the world and we want to keep it that way. But hostile actors should be in no doubt – there is no back door into the UK. This Bill will mean that we can continue to welcome job-creating investment to our shores, while shutting out those who could threaten the safety of the British people.”

The Government points to similar moves in the United States; and Australia. Also proposed are sanctions for non-compliance; including fines of up to 5pc of worldwide turnover or £10m. While a five-year retrospective power is called for, to call in transactions in the wider economy which were not notified to us but may raise national security concerns, that would not apply to transactions before the Bill entered Parliament.

For a ‘statement of intent’ visit the Department for Business website.

Comment

At the defence and security trade body ADS, Chief Executive Paul Everitt said: “Our industries support specific legislation to protect strategic national capabilities from hostile takeovers. Companies in our aerospace, defence, security and space sectors are developing innovative new technologies in the UK with the potential to make a long-term contribution to our national prosperity.

“The Government’s plans must strike an appropriate balance between putting protections in place and continuing to ensure the UK remains an attractive environment for international investment.”

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