As we reported in December, the UK Government has recently published the National Security and Investment Bill ("the NSI Bill") – draft legislation designed to strengthen its powers to scrutinise transactions on grounds of national security.
The NSI Bill will broaden the range of investments which can be reviewed by the UK government, and introduce a statutory requirement for parties to notify transactions in the most sensitive areas of the economy. Alongside a mandatory notification requirement, the government will also have a more extensive "call-in" power to enable it to assess deals which may give rise to national security risks.
The NSI Bill is being introduced because the government considers that its existing national security review powers (set out in the Enterprise Act 2002) are no longer fit for purpose. In particular, despite having been expanded in the last two years (see our briefings of 29 June 2020 and 1 July 2018), the Enterprise Act powers still limit the number of sectors and the types of deals which the government can scrutinise on national security grounds.
The government has referred to "sweeping" technological changes in the years since the introduction of the Enterprise Act which justify the proposed new legislation, and those concerns about technology are threaded very clearly through both the NSI Bill and the proposed list of mandatory sectors.
In this briefing we take a closer look at which types of transactions could potentially fall within the scope of the NSI Bill, focusing particularly on the software and data space.