The UK government has passed a bill that would give it the ability to intervene in foreign direct investments that could negatively impact the country.
As highlighted by The Register, the National Security and Investment Bill provides the government with the ability to examine, alter and block transactions where the risk to national security is present. These powers will extend to both equity and intellectual property.
The bill makes it mandatory for investors and private companies to warn the government about any prospective transactions that include AI, quantum technologies and space. In addition, compulsory disclosure is required should an individual’s stake in a company in the aforementioned areas exceed 25%.
The security bill will also provide a framework for voluntary disclosures if an investor may believe a specific transaction may have national security implications that is not covered under the three areas previously highlighted. The government is also able to ‘call in’ any acquisitions that they may have previously missed.
The main tenets of the bill are not expected to kick in until later in 2021. The government noted it didn’t expect many transactions to be held up by this new law, and those who face scrutiny will only be held up by a maximum of 30 days. Transactions will also not be revisited unless there is a suspect reason to believe false or misleading information was previously provided.
In a statement, Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng said, “This historic Act will ensure we are better equipped to protect our citizens from the small number of foreign investors that seek to do us harm.
“The UK faces continued and broad-ranging hostile activity from those who seek to compromise our national security and that of our allies. Such behaviour left unchecked can leave Britain vulnerable to disruption, unfair leverage, and espionage. It is crucial that the government has the tools at our disposal to combat these threats coming from ever more determined overseas actors.”
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