The National Security and Investment Act 2021 provides the Government with updated powers to scrutinise and intervene in investment to protect national security, as well as to provide businesses and investors with the certainty and transparency they need to do business in the UK.

In addition to a non-sector-specific voluntary notification option and a power to scrutinise qualifying acquisitions that have not been notified to the Secretary of State, the 2021 Act makes provision for a mandatory notification and pre-approval requirement for those sectors of the economy where it is considered that national security risks are more likely to arise than in the wider economy.

These Regulations specify the sectors and activities within those sectors which will be in scope of the mandatory notification regime. There are 17 identified sectors, which include advanced robotics, artificial intelligence, communications, computing hardware, and data infrastructure. The 17 areas have been identified as ones where the mandatory notification should apply to particular acquisitions as national security risks are more likely to arise in these areas than in the wider economy.

The new powers will require the Secretary of State to be notified in advance of certain acquisitions described in the 17 sectors provided for in these Regulations. This will mean that the Secretary of State is informed of proposed acquisitions in these areas and will be able to take action to investigate and, if necessary, address any national security risks. Acquisitions subject to mandatory notification will not be allowed to proceed without Government approval, and any acquisition that is not notified to the Secretary of State and cleared to proceed will be void.

The Government will keep under review the list of acquisitions in scope of the mandatory regime under review and will seek to make amendments in future to reflect changing national security risks and technological changes.

The Regulations come into force on 4 January 2022.

The Government has also published:

• The National Security and Investment Act 2021 (Monetary Penalties) (Turnover of a Business) Regulations 2021;
• the National Security and Investment Act 2021 (Prescribed Form and Content of Notices and Validation Applications) Regulations 2021; and
• the National Security and Investment Act (Procedure for Service) Regulations 2021.

To access the legislation, click here.