- Against a backdrop of geopolitical
uncertainty, the Deputy Prime Minister is calling for businesses’
feedback about the way the government screens investment to
protect the UK’s economic security.
- The National Security and
Investment Act, which came into force in January 2022, gives the
Deputy Prime Minister the power to scrutinise investment and take
action to protect assets that are vital to the UK’s national
security.
The Deputy Prime Minister, , has today announced the
publication of a ‘Call for Evidence’ on
potential updates to the National Security &
Investment Act to ensure the government’s investment
screening powers remain up to date, proportionate and
transparent for businesses, while protecting national
security.
The ‘Call for Evidence’ will be open for nine weeks and close
on 15 January 2024. In this time, the government
expects to receive feedback from a variety of stakeholders,
including domestic and international businesses, investors,
academia, and advisory firms. None of the changes are expected to
require primary legislation.
All of the responses will contribute towards an internal review
of the government’s investment screening powers, including:
- the scope
of mandatory notification requirements, to ensure that businesses
and investors only need to notify the government about deals that
warrant consideration on national security grounds – including
the 17 sensitive areas of the economy subject to mandatory
notification requirements, such as Artificial Intelligence,
to ensure they remain up to date;
- the
notification and assessment processes, to minimise the
administrative burden imposed on businesses while ensuring the
government gets the information it needs;
- and the
content of government guidance, to ensure businesses understand
the aims of the National Security & Investment Act
and how to comply.
The National Security & Investment Act gives the
Deputy Prime Minister the power to scrutinise, impose conditions
on or block the acquisition of businesses and assets that are
vital to the UK’s national security. It has been used in a
proportionate and targeted way since coming into force in January
2022.
As set out in the latest figures published in July, the vast
majority of businesses have not needed to interact with the
investment screening powers at all. Among those who have, the
government has been clearing around 93 per cent of
notifications without calling in deals for further assessment,
allowing investment to flow.
Where necessary and proportionate, the government has issued 17
final orders to impose conditions on or block or unwind specific
deals to protect national security.
Rt Hon CBE MP, Deputy Prime Minister
and Chancellor of the Duchy of Lancaster, said:
“At a time of rising tensions around the world the UK Government
must stay ahead of the game to ensure our legislation to protect
economic security keeps pace with rapid technological advances.
“At the same time, the best way to foster economic security is
through a strong and open economy. That’s why we’ve been using
the powers effectively so far, only intervening when absolutely
necessary to protect national security. Yet two years on, it’s
right that we formally engage with stakeholders to ensure the
process remains as frictionless and effective as possible as
we take the long-term decisions for the country.
“The significance of semiconductors and critical minerals is well
established, but their importance has only increased since the
NSI Act came into force. That’s why we’re considering carving out
these industries into stand alone sectors under the National
Security & Investment Act.
“I encourage businesses and advisors from any relevant sector,
anywhere in the world, to share their experience of the
investment screening process.”
, Minister of State
Responsible for the Investment Security Unit, said:
“The Deputy Prime Minister and I regularly meet with business
leaders from around the world, gathering feedback about the
government’s approach to national security and economic
investment. Our conversations make it clear that effective
national security regulations provide a sure foundation for
secure growth.
“This Call for Evidence is the natural next step in our
engagement with businesses. Against a rapidly changing
geopolitical backdrop, I’m pleased that we’re considering ways to
ensure the investment screening process remains frictionless for
those looking to invest and grow businesses here in the UK.”
