Where UK national security concerns arise, the first months of the NSI Act demonstrate the UK Government's appetite to take strong action. Blocks, at least in the case of acquirors linked to politically sensitive states and sectors that are key to the UK's national security, are happening – and we can expect this to continue. However, the UK Government has also demonstrated a pragmatic stance when considering the appropriateness of remedies packages even where politically sensitive states are involved.
To date, the two blocks have both related to acquirors with Chinese links and transactions that pose risks to defence in the UK. However, notifications have been received across all sectors covered by the NSI Act (not purely defence) and therefore it is only a matter of time before the scope of sectors in which action is taken broadens. Indeed, as explained above, we have now seen clearances subject to remedies in the satellite, communications and energy spheres.
At the other end of the spectrum, i.e. deals which do not raise material national security issues, our experience is that the new system is working efficiently. Filings are generally accepted by the UK Government within a small number of days, with clearance received within the initial review period without significant requests for further information.
However, the UK Government's action to date also reflects the focus of the NSI Act on the activities of the target, rather than purely the nationality of the investor. UK based investors (and acquirors based in politically friendly nations – including the US in the Inmarsat example above) are not exempt from notification or from facing in-depth probes into their deals. (In addition to the cases described in this briefing, it is worth noting that the purchase by Altice, the French telecom group, of a stake in BT was also retrospectively called in for assessment by the UK Government, although ultimately no action was taken).