On 20 July 2021, the Department for Business, Energy & Industrial Strategy (“BEIS”) published:
- A Draft National Security and Investment Act 2021 (Notifiable Acquisition) (Specification of Qualifying Entities) Regulations 2021;
- A consultation on the revised draft statement that explains how the power to call in acquisitions for consideration will be used; and
- Guidance notes to help businesses prepare for the NSI Act.
The National Security and Investment Act (the “Act”) will be a stand alone regime for government intervention and monitoring of acquisitions and investments for the purposes of protecting national security. Government will be more likely to intervene in transactions under the new Act than it has done under the provisions of the Enterprise Act 2002 (which will not be applicable when the Act comes into effect). The Act will come into force on 4 January 2022.
Companies will be required to notify deals and to obtain approval from the Secretary of State before completing their acquisitions, otherwise they could face financial and criminal penalties for not complying.
The Act is split in two parts: a mandatory and voluntary regime. The first regime requires qualifying transactions within one of the seventeen high-risk sectors to be notified for approval before they take place. The second regime will allow parties to submit transactions for approval, and also allow the new Investment Security Unit to call-in deals retrospectively.
The government is consulting on the revised draft Section 3 Statement, requesting views from stakeholders, with a deadline of 30 August 2021.
Please contact Tim Cowen if you have any questions about the government’s proposals or consultation.