For many years, investment screening for national security concerns in the UK has been light touch. The old framework, contained within the Enterprise Act, worked in line with the UK’s merger control regime. The scope was narrow, and very few transactions were subject to scrutiny.
The new National Security and Investment regime is a step-change in the UK’s approach to scrutinising investment in UK companies and assets. It will run parallel with the existing merger control requirements. The regime creates significant ‘call in’ powers for the UK Government for almost any kind of transaction in the UK. A new Investment Security Unit within the UK Government will review and monitor transactions. There are mandatory requirements for pre-notification and clearance for a range of corporate transaction types in key sectors. Non-compliance can lead to significant sanctions, such as criminal penalties, including imprisonment and significant fines.
Moreover, the law will have some retrospective effect on transactions completed after 11 November 2020.
We can help you determine the risks of the National Security and Investment regime to your transaction and activities, and advise you on the practicalities of the process.
We can offer investment screening support as part of an integrated offering, together with merger control and wider regulatory advice.
We are well placed to advise clients on the new requirements, transaction due diligence, transaction strategies, and, if necessary, to handle filings and interactions with the UK Government.
We have advised a range of clients on the implications of the new regime – both at a strategic level, prior to the introduction of the regime, and on specific transactions. Our experience includes advising renewables developers on portfolio transactions and strategic issues raised by the regime, and clients in the technology sector on potential impacts to their acquisition activities.