What does the UK's new national security investment screening regime mean for investors?

On 11 November 2020 the UK Government introduced the National Security and Investment Bill (NSI Bill) to Parliament, setting out significant legislative reforms which will overhaul the review of transactions and investments on national security grounds in the UK, against a backdrop of tightening of foreign direct investment (FDI) regimes globally.

If passed, the NSI Bill will introduce for the first time a distinct regime and standalone powers for the review of FDI in the UK (referred to in this briefing as “the NSI regime”), replacing the existing public interest merger regime contained in the Enterprise Act 2002 (EA02) insofar as national security interests are concerned. The proposed NSI regime follows on from the Government’s July 2018 White Paper, but departs from the original proposals in a number of significant respects, including the introduction of mandatory notification obligations in 17 specified sectors. It is expected that the NSI Bill will become law in the Spring of 2021 and that the NSI regime will come fully into force at the same time or most likely shortly thereafter.

Further to our initial briefing published earlier this week as the NSI Bill was introduced to Parliament, we set out in this briefing our more detailed analysis of the key elements of the proposed NSI regime, namely:

• which investments are subject to review;
• whether all investors will be equally affected;
• those transactions that will be subject to mandatory notification obligations;
• consequences of failing to comply with the mandatory notification obligation;
• how the notification process will work;
• powers to “call in” non-notified transactions;
• information gathering powers;
• use of interim orders preventing integration pending clearance;
• the review process timetable;
• remedies that may be requested as a condition of clearance;
• sanctions for non-compliance;
• application to deals completed between 12 November 2020 and commencement date;
• obtaining informal guidance;
• the interaction between the NSI Bill and the UK merger control regime; and
• next steps.

Click here to read the full briefing.

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