National Security Investment Screening

For many years, investment screening for national security concerns in the UK has been light touch. The old framework, contained within the Enterprise Act 2002, worked in line with the UK’s established merger control regime. The scope was narrow, and very few transactions were subject to scrutiny.

The National Security and Investment Act is a step-change in the UK’s approach to scrutinising investment in UK companies and assets. It runs parallel with the existing merger control requirements, creating an additional regulatory filing requirement for a range of deals. The regime creates significant ‘call in’ powers for the UK Government for almost any kind of transaction in the UK. The Investment Security Unit within the UK Government undertakes the task of reviewing transactions.

There are now mandatory requirements for pre-notification and clearance for various types of corporate transactions in 17 key sectors of the economy, ranging from transport, energy and advanced robotics, to cryptographic authentication and synthetic biology.

Non-compliance can lead to significant sanctions, such as criminal penalties, including imprisonment and significant fines. Closing a transaction without receiving clearance, where required, is now an offence – the deal will also be considered legally void.

Additionally, a voluntary notification process is available for transactions that are not subject to the mandatory notification requirement, for parties who wish to ‘de risk’ certain transactions.

We can help you determine the risks of the National Security and Investment regime to your transaction and activities, and guide you through the process of obtaining clearance.

Our services

We can offer investment screening support as part of an integrated offering, together with merger control and wider regulatory advice. We can help you successfully navigate the process and provide practical advice on how it might impact your deal.

We are well placed to advise clients on the new requirements, provide transaction due diligence, develop response strategies, and, if necessary, can guide you through the process of notifying and obtaining clearance for your deal with the UK Government.

We have supported clients on the risk assessment of their transactions, provided due diligence support across a number of significant deals, and have handled the process of filing and obtaining clearance for clients across the energy, commercial property and technology sectors.