New Government rules in force from today, 4th January 2022. Under the Act government can scrutinise and intervene in acquisitions that could harm the UKs national security.
The new rules only apply to qualifying acquisitions, referred to as trigger events in the National Security and Investment Act. An acquisition is a qualifying acquisition if all of the following apply:
- the acquisition is of a right or interest in, or in relation to, a qualifying asset or qualifying entity
- the entity or asset you are acquiring is from, in, or has a connection to the UK
- the level of control you acquire over the qualifying entity or qualifying asset meets or passes a certain threshold (for example, your stake or voting rights in a qualifying entity becomes higher than 25%)
- the acquisition was not completed before 12 November 2020
There are 17 defined areas sensitive for the UK economy (listed below). Areas defined include a qualifying entity, where an entity is any entity other than an individual, or asset for which approval may be required before acquisition completion.
Qualifying entities include:
- a limited liability partnership
- any other body corporate
- a partnership
- an unincorporated association
- a trust
Qualifying assets include:
- land
- tangible moveable property
- ideas, information or techniques which have industrial, commercial or other economic value (‘intellectual property’)
Entities and assets might be qualifying entities and qualifying assets if they are outside or not from the UK but have a connection to the UK.
The qualifying areas sensitive for the UK economy:
- Advanced Materials
- Advanced Robotics
- Artificial Intelligence
- Civil Nuclear
- Communications
- Computing Hardware
- Critical Suppliers to Government
- Cryptographic Authentication
- Data Infrastructure
- Defence
- Energy
- Military and Dual-Use
- Quantum Technologies
- Satellite and Space Technologies
- Suppliers to the Emergency Services
- Synthetic Biology
- Transport
There is a legal requirement to notify the government of a notifiable acquisition by submitting a mandatory notification online, with penalties and the acquisition becoming void through failure to do so. Information on the structure and share ownership of the qualifying entity, acquirer and the acquisition will be required. Mandatory notification requirements only apply to the acquisition of qualifying entities. These requirements do not apply to the acquisition of qualifying assets.
Further information:
https://www.gov.uk/guidance/national-security-and-investment-act-guidance-on-acquisitions#check-if-the-rules-apply-to-your-acquisition
Forms:
https://www.gov.uk/government/publications/national-security-and-investment-notification-service-mandatory-voluntary-and-retrospective-forms?utm_medium=email&utm_campaign=govuk-notifications&utm_source=bd694b61-b8c7-4ccc-b2b7-f00180aa6eec&utm_content=daily
