Government Unveils Revised Guidance on National Security Investment Rules

Government Unveils Revised Guidance on National Security Investment Rules

LONDON (News Desk) – In a move aimed at bolstering transparency and fostering a business-friendly environment, the British government has released updated guidance on the implementation of the National Security and Investment Act (NSI Act) of 2021.

The revised guidelines, published by Deputy Prime Minister Oliver Dowden, seek to provide greater clarity for institutions, businesses, and their advisers while safeguarding national security interests.

Addressing a press conference on Thursday, Dowden emphasized the government’s commitment to striking a balance between protecting national security and maintaining the United Kingdom’s allure as a prime investment destination. “By being transparent with businesses, we’re creating a predictable foundation for future investment, which will help deliver on our plan to grow the economy,” he stated.

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Key updates to the guidance include:

  1. A new “section 3 statement” that outlines how the Deputy Prime Minister expects to exercise powers under the NSI Act to scrutinize certain acquisitions, including the incorporation of new entities and the formation of joint ventures.
  2. Expanded information on the circumstances in which the government may consider technology transfer risks when reviewing asset acquisitions, as well as potential risks posed by UK acquirers or those previously cleared through the NSI system.
  3. Improved examples and clarifications on how the government assesses target risk, acquirer risk, and control risk when making decisions under the NSI Act.
  4. Specific guidance for universities and academia, including examples to help academics determine when to notify acquisitions to the Investment Security Unit (ISU).

The revised guidance also addresses the application of the NSI Act to outward direct investment, providing further guidance for businesses operating internationally.

Since the NSI Act came into force in January 2022, the government has reviewed over 1,700 notifications and issued 22 final orders to safeguard national security interests.

Business leaders and industry experts have welcomed the updated guidance, lauding the government’s efforts to promote transparency and provide a predictable investment landscape while maintaining robust national security measures.

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