UK NS&I regime

In the UK, investment screening on national security grounds is governed by the National Security and Investment Act 2021 (NSIA 2021). The regime came fully into force on 4 January 2022 and gives the UK Government power to scrutinise, impose conditions on, prohibit or unwind acquisitions of control over qualifying entities and assets where national security concerns arise.

The regime is administered by the Investment Security Unit (ISU) within the Cabinet Office, with decisions taken by the Chancellor of the Duchy of Lancaster, as Secretary of State in the Cabinet Office. It operates separately from UK merger control and is not limited to foreign investors, large transactions or acquisitions of UK-incorporated companies. UK acquirers, minority investments, asset acquisitions, internal reorganisations and acquisitions of foreign entities or assets may all be within scope where the statutory UK nexus is present.

The NSIA 2021 has two principal routes to review. Certain acquisitions of qualifying entities carrying on specified activities in sensitive sectors must be notified by the acquirer and cleared before completion. Other qualifying acquisitions, including asset acquisitions and acquisitions conferring material influence,...