The UK Government has recently published draft legislation designed to strengthen its powers to scrutinise transactions on grounds of national security. This briefing summarises the key points to be aware of in relation to the National Security and Investment Bill ("the NSI Bill").
Background to the NSI Bill
The Government has been looking at strengthening its powers to scrutinise transactions on grounds of national security for some time. Subject to one major exception (discussed below), the NSI Bill is broadly consistent with the approach outlined by the Government in earlier consultations, as outlined in more detail here.
THE EARLIER PROPOSALS
As compared with the current regime, these earlier proposals envisaged a significant widening of the sectors subject to national security scrutiny beyond defence and certain advanced technology businesses to encompass critical infrastructure and a broader range of advanced technology (e.g. nano-technology and discovery and development of new materials). Merging parties would have been encouraged – but not compelled – to notify the government of transactions which might raise national security concerns. The Government envisaged being able to respond within 15-30 working days, with a further 30-75 working days if the transaction were to be "called in" for more detailed scrutiny (which would only be the case if there were substantive national security concerns).